While the proverb “you’re only as strong as your weakest link” may be well-worn, it is a truism that becomes particularly relevant when hiring and managing third-party contractors. Whereas most agents and brokers are adept at overseeing their in-house teams, managing third-party contractors requires a seamless balance between not-overstepping boundaries while making sure the job gets done. Asset managers count on agents and brokers to be their eyes and ears on the ground, so keep the following tips in mind to strengthen your relationships with your third-party hires.

Managing the Hiring Process

When it comes to working with third party contractors, first thing’s first—the hiring process. Weeding out the wheat from the chaff can take some time and experience, but once relationships are established with reputable companies, the results will speak for themselves.

Todd Schneider of Countrywide Real Estate has waded through this process multiple times. For him, the key is drawing from an established network. “If you use contractors that have been around our industry and know what the expectations are in the REO world, you will get a fair price,” says Schneider, “I usually use a SAM’s vendor. I do have local guys and gals with private firms, but it would depends on the job.”

William Murray of the Century 21 Pro Team often needs to hire third-party contractors for repair, winterization, HVAC, clean-up, and maintenance jobs. Like Schneider he also uses a bidding approach saying, “All my jobs are bid out by at least two companies, competition will always bring about the best price.”

While most agents would agree that obtaining bids is a good way to settle on one company, it is important to keep in mind that a healthy agent-contractor relationship is a two-way street. “On trash-outs and initials we request two bids from each contractor. Sometimes I will advise a contractor if I think they are not charging enough to make sure that they are able to complete the job to our specifications since I do not want them to walk out in the middle of a job,” shares 35-year REO pro Allen Trammell of Trammell & Co. Realtors.

Schneider agrees that being too aggressive in the bidding process can backfire. “Getting three bids for most work is the best option; however, it is hard sometimes if the contractor bids all the time and never gets a job. You may lose them,” he says.

“Early on in my career I used to go out and get three bids. Now I just get the one because I know these companies and I know that they won’t over bid a job. They treat me well knowing that I will call on them and rely on them,” says Ruben Pena of TC Austin Residential Group.

Setting the Bar

Whether your seller clients expect you to hire contractors from scratch or manage the field servicing companies already in their roster, the fact remains that as an agent you will be called upon to set the bar for work completed. “The first step is to be knowledgeable about if the work being done is truly a satisfactory performance or not. Nobody likes me telling them to go back out to an asset on their own dime to fix some sloppy work they left behind the first time around but I will if necessary. Be reasonable but stay in control of what is expected of routine work,” advises Tim McCubbin of Century 21 Action Realty

Murray agrees saying, “Always check the work just in case. It’s okay to be friendly with your suppliers but always remember they represent you. If they do not do the job correctly, your client will be looking at you for answers.”

Trammell’s trick for maintaining proper oversight is simple yet genius. “I generally have a contract lawn and trash-out company that I am familiar with their practices (they are often the ones maintaining my personal rental properties) and I require before and after photos of each job, especially grass cutting,” he says.

Though state laws may vary, Schneider points out that agents need to make sure they are protecting themselves from liability. “No matter whom you use, verify that they have all the proper licensing and insurance,” he advises. “I suggest an agent make sure that any contractor they use provide their own equipment and they either have their own insurance or at least sign a waiver and an independent contractor agreement unless they are payroll employees,” Trammell states.

Trusting the Experts

If you have properly vetted your third-party contractors, your reward will be lasting relationships with pros that have your back in what is an increasing competitive field. “As an agent of more than 36 years I have been able to establish great working relations with many vendors,” says Pena. “Throughout the years I have come to count on them and I like to think of them as part of my team of experts. I have hired all of the experts from landscaping to foundation and plumbers and electricians and surveyors each and every one of them expects the best from me as I do from them,” Pena says.