Cutting Costs: Where NOT to Cut

Freddie Mac LogoFreddie Mac has been cracking down on repair bids lately, in an attempt to cut costs. Most recently, we were informed that any REO repair bids totaling over $10,000 would require a second bid to be obtained — essentially, a second opinion from competing repair contractors. We can understand the desire to cut back on unnecessary repairs in order to save money, but there are certain items in any REO repair bid that you really don’t want to skimp on. Some of these include:

  • Roofing issues — a leaking roof is something that can affect the whole house; you can’t just look the other way.
  • Electrical issues — Any electrical repairs not completed can result in dangerous hazards.
  • Plumbing issues — Be extra careful with plumbing: An unrepaired leak can lead to serious water damage throughout the home.
  • Carpet and flooring issues — If it’s just a question of a little stain here or there, that’s one thing, but major carpet or flooring damage is something else altogether, and it definitely needs attention.
  • Paint — A complete interior paint is something pretty much every REO property is going to require, sometimes with necessary priming added.
  • Rot — If your asset has noted wood-destroying-organisms (WDO), you’ve got a serious problem, and it needs to be addressed.
  • These are a few of the things you don’t want to try to scrimp on when you’re looking to keep bid costs down. Keep in mind, the better condition the property is in, the better chance it has to sell!

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