Winterization: An Argument For Unionism?

While it may appear that I spend most of my time battling lawyers for the legal right to publish the Truth on Foreclosurepedia, it really takes up less than one tenth of one percent of my time. Far more of my time is spent researching material. Occasionally, though, I get an email that is simply so good, I put it on Foreclosurepedia. Below is an example,

In order to do a good job on a winterization, you have to spend a minimum of two hours at a property. This is the best case scenario and could be much longer with special situations and the pressure test. If you hire someone who has experience at this service, how much should he be paid? Experienced home handymen (notice I did not say plumber) will charge $45-$75 per hour while they are actually working on a job. Even if we use $40 an hour, that would be $80. Then, a trip charge is in order to cover the cost of the truck. If the vendor travels 150 miles round trip in a day, that would be about 37.5 miles per job. AAA estimates the cost of operating a vehicle to be about 70+ cents per mile. The trip charge needs to be $25 to cover the vehicle expense which is very reasonable. The cost of antifreeze should be charged at a markup as all parts and supplies are charged in the real market. I would put this in at 3 gallons at $7 or $21 total.

This brings us to $126. Now we add in an amount to cover the risk of illegal chargebacks and, what I refer to as “monkey business”. (vendor completes a winterization, a real estate agent, thinking he has the home sold turns on the water to show his client all is good. The deal falls apart and the plumbing freezes. The vendor receives a work order to repair the pipes that were damaged because of his “improper winterization”.) Depending on the timeframes, a vendor may not even be able to defend himself in some of these cases. I don’t know how to quantify this expense but it is real and has to be part of the pricing. I will just input $30 on each winterization since a claim like this can be in the hundreds and even thousands of dollars. This puts us at $156.

The only thing left is overhead (insurance, Internet, telephone, etc.) and profit. I would suggest 15% for overhead, but I have no logic for that, and a 20% profit margin. This gives us a market value of $215. If a vendor is completing a winterization at $50, he is losing a boat load of money. The real market would add a charge for the 200 photos and for the PCR (which has now become a home inspection). I won’t add anything in for these services but this could double the price in the real market.

Who is actually completing winterizations? Certainly not plumbers, they would laugh at the chargeback issue and the monkey business exposure. And the photos? For free? Forget about it. The PCR? Free? You have to be kidding. You want me to walk into a vacant house with no utilities? Are you insane? Clean out a toilet full of junkie feces? Ok, enough said.

Unfortunately, mortgage companies are happy to have anyone with a liability policy do the work, regardless of qualifications. It is certainly their right to conduct business however they choose. But eventually, the insurance business is going to wake up and smell the antifreeze. How can you insure a vendor to complete winterizations under these circumstances?

This gentlemen has been around since 1981. Most of the Drive By Social Media Clowns were still wearing diapers or perhaps not even an idea yet. He, like I, remember when Lender Processing Services was Universal Mortgage which became Chicago Title which became Fidelity which finally morphed into LPS. So, before you go slamming him, you may want to contemplate your current Portfolios as in the same way Foreclosurepedia is viewed, so are other Social Media Outlets.

The novelty is that 13 years or so ago when Mimi Norris had put together a few of the Yahoo Groups — yes kiddies before Facebook and Twitter people actually had to continue to refresh the page to update — the idea of Unionism was tossed around and yes disliked.

With Washington DC raising the Minimum Wage to $11.50, the reality is that change is in the air. Another reality that the script kiddies over on the Drive By Social Media do not like is that the Service Contract Act demands Prevailing Wage be paid on US Department of Housing and Urban Development properties.

With the Federal Class Action Lawsuits already ongoing, it is only a matter of time before these Otherwise Unspecified Order Mills are gone. That means 20% more in the Pockets of the hardworking Men and Women of this Industry.

At the end of the day, there is no justification of farming out work past the National level. The sad, pedestrian reality is that while the Otherwise Unspecified Order Mills are all huddled in the corner on the Drive By Social Media outlets the National Order Mills are gearing up to begin to directly hire the Contractors. You know what? I am fine with that. If you cut out the Regional Order Mill and Otherwise Unspecified Order Mill, you add 40% to any given Work Order.

Damn! Did you hear that?! Foreclosurepedia gives a tacit nod to National Order Mills?! Sure I do to a point. First, they established the infrastructure to move data up and down the pike. Hey, that’s worth 15%. Now, if the Nationals continue their doggedly back billing and atrocious behavior of eviscerating Contractors by refusing to pay, then that is a whole other issue that the Union will deal with. Ah, see the Independent Contractor is ALLOWED TO BE A MEMBER OF THE UNION so I am not that concerned.

My final point is the clarification of the International Union whom is coming on board. It has been around since 1917. So, it is not new to the game. Protests are nothing new to its Membership — in your face knuckle dragging Picketing — and is actually seen as a Rite of Passage. The reality is that I have already joined and as of next week’s Conference Call we will have Contractors signed up in the necessary geographic regions to facilitate orderly transition. At the end of the day Foreclosurepedia doesn’t write the News we MAKE THE NEWS!

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