What is a competitive bid in the Termite Industry?
The real estate market in the greater Sacramento market has been hot in 2017! Sellers are getting top dollar for their homes; buyers are getting fantastic interest rates on their purchases! It really has been an incredible ride. We have also enjoyed the fast pace of the market and shared the excitement of clients buying a selling homes.
In the world of termite inspection and reconstruction/repair we deal with buyers and sellers, and typically their REALTORS®. When home prices are high, buyers often expect a flawless product upon completing the purchase. Typically (and in my personal experience) sellers are looking to maximize their takeaway from the sale- often times what’s left in between as one of the largest negotiation pieces are the findings from the home and termite inspection reports. In most cases the Wood Destroying Organism (WDO) report will identify findings as Section 1 (active infestation), Section 2 (conducive conditions) or Section 3 (further inspection). The WDO Company will typically provide a bid for them to make the recommended repairs
It is at this point that the competitive bi opportunity arises. Going back to the point made earlier, that sellers are typically looking to maximize their profits- they take this bid and ask other companies to provide a bid for the same work. Sometimes the bids are performed by Handymen, sometimes by General Contractors and sometimes by other WDO Companies. If the work is completed by a handyman or general contractor the original WDO Company will need to do a reinspection if the transaction requires a “clearance” to fund. A “clearance” is basically a WDO company’s stamp of approval that the property is free of WDO’s at the time of the clearance. Or if it is a WDO Company that completes the work they can issue what is called a Notice of Completion that outlines the work performed and provides the “clearance.”
Competitive bids can be tricky, anytime an additional party is invited to inspect a property you run the risk (as a seller) of having more findings that could possibly have been overlooked in the original inspection. Or you could have a higher bid for the same repairs, keep in mind when a company provides a bid for work they are making an estimated guess at what the cost of completing the repairs would be to them and then adding profit to the job. Varying labor rates and other overhead costs of different company’s affect the way that they bid repairs. The size of a company will also determine how soon, or in some cases how long, it will take to start and complete the job. Given that Real Estate transactions typically take place within 45 day escrow periods the ability to schedule and complete repair jobs in a timely manner may outweigh the savings of a less expensive bid.
If you have a repair opportunity or need a competitive bid- we at North American Home Services would love your consideration. Or, even if you have questions- we are here for you, don’t hesitate to reach out to us!