Property Preservation Definition and Vocabulary List

Banks and mortgage servicing companies frequently use terms and vocabulary that may be unfamiliar for you at first. It sure was for me when I first started. You will need to know the following words and their meanings and be able to "fluently" use them while talking to your potential clients. 

This is just one of the many components you will need to master in your quest to run your own successful property preservation business.


Convey Condition: Many of the properties you will be working on are HUD guaranteed loans. The Dept of HUD requires a property to be in convey condition before they will take the house back from the bank. For a property to be in convey condition, the house and any outbuildings (garage, shed) must be secured with locksets that are coded to the proper key codes which are determined by which bank you are dealing with, all windows must either have all glass reglazed or be properly boarded (more on correct bank boarding techniques later), all exterior debris and health hazards must be removed (see definition of health hazards later in this section), any damages to the property which can cause future damage have been repaired, grass needs to be cut if it is grass cut season, the house must be properly winterized (if in season), no safety hazards, and there can be no known code violations. This is one of the most confusing areas of the entire business. I suggest that you spend some time researching the Dept of HUD's website for additional information about this very important term.

Property Preservation: This term refers to the industry of professionals who provide services to banks and asset management companies on their foreclosure houses. Typical services provided are repair, inspection, insurance claim management and maintenance. Also known as Mortgage Field Services. Recently the misnomer "foreclosure cleaning" has been used to refer to the Property Preservation industry even though cleaning is only a very small part of the services provided by professional Property Preservation companies. If you want to be taken seriously, you should never refer to it as "foreclosure cleaning".
Health Hazards: Health hazards is a form of debris that has the potential to contaminate and harm humans. Common items in this category include feces (both human and animal), mold, dead bugs, extremely stained carpeting, rotten food, bodily fluids, unknown chemical containers.

Safety Hazards: Safety hazards can be missing handrails, a severely sagging ceiling, flooring that may pose a trip hazard, hanging gutters, broken steps, uncapped gas lines and wires. You can probably think of several more just using common sense.

Marketable Condition: Marketable condition is basically when a property is in “move in” condition.

Theft/ Vandalism Damages: Damages caused by thieves and/ or vandals such as stolen copper plumbing supply lines, graffiti, holes in walls caused during the theft of electrical wiring or plumbing, broken/ kicked in doors, broken windows, stolen electrical wiring, etc. Some companies prefer that you separate these 2; therefore, theft damage involves some type of theft and vandalism damage is simply damage without any visible theft.

Water Damage: Interior damage such as water stains, water logged carpet, buckled hardwood flooring caused by water intrusion from a leaky roof, freeze damaged plumbing pipes, flood caused by sump pump failure. This does not include the mold damage that appears very soon after.

Roof Damage: Damage to the roof such as missing shingles or missing flashing that is causing an active roof leak. Another example could be a large tree branch that fell on the roof (If this fallen tree branch could be linked to some type of extreme weather event then it would be classified as storm damage).

Fire Damage: Damage caused by fire or smoke. This type of damage can be minimal or it can be so extensive that the entire property needs rebuilt

Storm Damage: Damage caused by flood, hail, wind, fallen trees, etc. An example would be dented aluminum siding, fallen tree branches, roofing shingles that have bent or blown off the roof.

Trashout: Removing interior and exterior debris and abandoned personal belongings. Also known as cleanout, foreclosure cleaning and debris removal.

Securing: This term refers to a number of items that involve door locks replaced, all outbuildings locked, all broken windows properly boarded according to HUD specifications.

REO: “Real estate owned” by the banks, usually after the foreclosure sale.

Cash For Keys: When the bank or servicer is willing to pay the occupant of a property to vacate.

Adjuster Scope: An estimate prepared by an insurance adjuster (estimator) addressing specific damages covered by an insurance policy.

Maid Service: The process of basically “cleaning” the inside of a property including but not limited to vacuuming and mopping all floors, cleaning all windows and light fixtures, kitchens and bathrooms, stoves, ovens and refrigerators. This is basically a thorough cleaning of the whole house; however, most servicing companies require their cleanup contractors to complete a lengthy checklist and take specific photos in order to verify that this cleaning was completed up to their standards.

Initial Services: This is a type of order you will receive where you will be responsible for the trash out, maid service, grass cut or winterization (depending on which season), securing, completing a basic assessment of any damages present, and possibly several other issues that will be specifically requested. Each asset management company is slightly different and will instruct their property preservation contractors on the specific items they require.

Update: The method your client wants you to follow in order to send them information such as progress reports, photos, invoices, estimates, etc. They will either have a secured website or will request that you send the necessary info to them by e-mail.
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