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The Tortoise and the Hare of Payments

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Services for Real Estate Pros with pha logistix inc

 

 The Tortoise and the Hare of Payments

HareUnder normal circumstances, as a moving organizer, PHA receives a deposit of 50% of the estimated costs with the balance due upon presentation of an invoice at the end of the project when all items have been unpacked and put away.

But, there is another segment of my business where the costs of my services are reimbursed by one or more major Insurance Companies….

Imagine that you have recently purchased a new construction condo – Brand new flooring, new appliances, granite countertops – the works. 

You throw some laundry into your washer before you leave for work…. You telecommute but you are meeting a colleague for coffee.  You’ll be back in an hour…. No problem.  NOT!  You come back to a flood of water throughout your unit – the floor is warping, all of the bottoms of your furniture look yucky, and anything on the surface of the floor is destroyed.  Yikes. What happened?  In one building, the original builder purchased “discount” high-end washers that had a plastic coupling instead of a metal coupling on the water hose….the plastic coupling soon melted from the heat of the hot water and 27 out of 99 units got damaged!!!

After the restoration company has sucked out the water and placed industrial heat fans to dry things out,  your Insurance Adjuster recommends a General Contractor and floor installer to make things right.  BUT, before your floors can be replaced, you need to be packed up, furniture and items put into storage, and you need to find a temporary residence while all the repairs are done.

PHA is one of the vendors invited to submit estimates for the pack out, storage and pack back in… When PHA wins the project, we understand that we will not get paid until all repairs are made, and the furniture and personal effects, including the hanging of artwork, are returned to their original location. And, the homeowner has signed an approval accepting that the vendor’s job was done satisfactorily.

TortoisePHA submits invoices and homeowner's approval to the Insurance Adjuster for their review and payment.  These documents cannot be submitted via email – they can only be faxed.  And, now the waiting begins, and goes on, and on, and on…. Follow up to the adjuster either gets ignored completely, or you’re told… “I see it in my folder but there are hundreds of requests ahead of you”…  

Eventually, PHA gets paid…but, if Insurance Companies would get into the 21st Century and accept the use of Electronic Signatures through a product such as Adobe EchoSign – many of us vendors out there could probably get paid in a more timely fashion!

This post is written as an entry to this month’s Adobe EchoSign challenge.

Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA

Peggy:

Insurance companies are notorious for delaying payments.  That include payments to their own insured.  I think it is an industry philosophy.  At least they finally do pay, but it is very frustrating dealing with them.  Nice post, I hope you are one of the winners.  Good luck

Oct 06, 2012 08:47 AM
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA
SF NYC LA

Thanks, Evelyn.... frustrating is putting it mildly, it's downright annoying!

Oct 06, 2012 09:09 AM
Jim Patton
Aspire Home Real Estate 209-404-0816 - Modesto, CA
Realtor - Stanislaus ,Merced, San Joaquin Counties

That sounds like me waiting to get reimbursed on some of my REO's for utilities and repairs etc.   I guess they think the longer they hold onto the money the more interest they will earn.   It is frustrating , that's for sure.

Oct 06, 2012 09:24 AM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Peggy..... why are so many ahead of you rather than you ahead of them.... keep calling..... tell him the calls will stop when he puts you ahead of them....

Oct 06, 2012 09:33 AM
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA
SF NYC LA

Jim... so sorry to hear that you need to wait for payments especially when you are doing things to make the property more attractive for a sale!

Oct 06, 2012 09:34 AM
Kathy Sheehan
Bay Equity, LLC 770-634-4021 - Atlanta, GA
Senior Loan Officer

To me it sounds like an excuse.  I agree with Barbara and I would keep calling.

Oct 06, 2012 09:42 AM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Wishing you luck in getting the insurance people to speed things up. Until then, keep calling.

Margaret

Oct 06, 2012 10:48 AM
Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker

Peggy: I'm sure insurance companies like it the way it is now just fine. It delays payments and they keep the money that much longer. What a scenario.

Oct 06, 2012 12:34 PM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Peggy, I think some companies just like to hold onto their money. We once received payment for a commercial that was way overdue and it was written from their money market account. They were just waiting for it to mature - how gauche!

Sharon

Oct 06, 2012 12:47 PM
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County
Either way, it does sound like you have a good thing going with the insurance companies.
Oct 06, 2012 12:48 PM
MichelleCherie Carr Crowe .Just Call. 408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Sounds like a secure source of business that could be simplified with e-signatures.

Oct 06, 2012 02:28 PM
Ellen Caruso
Daniel Gale Sotheby's International Realty - Glen Head, NY

Peggy great info and wonderful use of the electronic signatures!

Oct 06, 2012 02:31 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Peggy - Things would be easier if more companies would accept esignatures and the banks would ditch faxes for email.

Oct 06, 2012 03:13 PM
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Peggy -- most companies charge a late fee, if the payment is not made in timely manner.  I imagine if you did that on Insurance claims, they would be quicker to pay, as you late fee (if %/mo) would most likely be more than they are now making on keeping the money.

Oct 06, 2012 04:08 PM
Roger D. Mucci
Shaken...with a Twist 216.633.2092 - Euclid, OH
Lets shake things up at your home today!

No reason in the world why it should take so long to get paid..................crazy, but congratulations on the Feature.

Oct 06, 2012 06:47 PM
Carol-Ann Palmieri
RE/MAX Executive Realty, Al and Cal Realty Group - Franklin, MA
"Cal" the Real Estate Gal

Hi Peggy.    Dealing with insurance companies is an extreme lesson in frustration.    Good post for the challenge.  Congrats on the feature!

Oct 06, 2012 11:47 PM
Harry F. D'Elia III
WEDO Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

More and more companies must accept esignatures since we are all busy. I love it for my business.

Oct 07, 2012 12:15 AM
Liz Wallace
Century 21 Sherlock Homes - Rockville Centre, NY
Broker C21 Sherlock Homes, Rockville Centre, LI, N

Insurance companies are notorious about holding up payment.  When we have a rental for an insured client we get the commission check before the tenant gets the key.  My mother didn't raise any idiots.  You are in a different position and it really is awful when you are a small business and depending on getting paid.

Oct 07, 2012 01:07 AM
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA
SF NYC LA

Wow... I didn't expect that this post would garner so much attention!

BarbaraT - Good advice and I do call once a day - and if it goes to voicemail, I leave a message but make sure I call back to get them live...

Yup, Kathy... I agree.

Thanks so much Margaret.

Oct 07, 2012 03:08 AM
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA
SF NYC LA

Hella - I'm very familiar with short-term commercial paper investing... it's small business that really gets impacted by it from big businesses. So, of course they want to keep their money working for them as long as they can.

Oct 07, 2012 03:11 AM
Rebecca Gaujot, Realtor®
Lewisburg, WV
Lewisburg WV, the go to agent for all real estate

Peggy, congratulations on the feature...a great post on why we need..especially insurance companies :) electronic signatures.

Oct 07, 2012 03:12 AM
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA
SF NYC LA

Perfect word for it... gauche.  Thanks, Sharon.

Steady sources of income are always welcome, Melissa.  And, I'm grateful for it.... it's just the uneven cash flow that's not so nice.

I agree Michelle....

Christine.. fax machines should become obsolete :)

Now there's an idea, Steven... thank you.

Oct 07, 2012 03:18 AM
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA
SF NYC LA

I agree, Roger...

The feature is a pleasant surprise, Carol Ann!

 

Oct 07, 2012 03:20 AM
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA
SF NYC LA

Yes, Harry - big corporations need to get with the "program" and accept electronic signatures.

One of the negatives of being a small business, Liz. But, IMHO until a group of trades people get together and demand different payment options, Insurance Companies are not going to change their ways.

Rebecca... I agree. And, thank you.

Oct 07, 2012 03:25 AM
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

Is it not amazing how some vendors want their funds immediately but others are very slow to pay. Isn't there some language that you can use in your invoice that states if not paid on time you can charge interest on the unpaid balance, or offer a discount if the invoice is paid within a certain period. I have a client that does embroidery work and all the clients want their projects done now, but she can wait up to six months before being paid. BPO's are like that also hurry up and get the job done, then sit and wait, & wait, & wait until funds are forth coming, and sometimes not at all.

Oct 07, 2012 03:39 AM
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA
SF NYC LA

The suggestion to offer a discount if paid within a short time frame is a good one, thanks Lorraine/Loretta!

Oct 07, 2012 03:50 AM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Peggy,  This post is genius.  I went to <suggest> then realized it was already Featured. Congrats on the Feature. I recall your comment on my reblog of the challenge post. This is similar to what short sale agents face when dealing with lenders. No surprise that big banks and big insurance companies lag in the use of technology which is no longer even new technology. And no surprise that we all must wait ... and wait ... want wait ... to get paid. 

Oct 07, 2012 12:00 PM
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley Realtor since 1976; 408-373-4411

Peggy, very interesting story and situation.  If I were the buyer, I'd be worried about more problems in that condo complex  Busted washing machine hoses are a known problem and a plastic coupling could be an indication of other cost-cutting features.  But, at any rate, faxes are so 'yesterday' and EchoSigning makes a lot more sense.    

Oct 07, 2012 03:19 PM
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA
SF NYC LA

When I first read the challenge, Kathleen, I thought that because I'm not an agent, I wouldn't have a situation to talk about.  Then when I read your re-blog, I got inspired to write about my cash flow issues with Insurance Company payments.... thank you.

Oct 08, 2012 01:56 AM
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA
SF NYC LA

I agree with you Lloyd, and the HOA is suing the builder, but what a hassle for re-sale!

Oct 08, 2012 02:00 AM
Morgan Evans
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

Sounds like a perfect example of how a service like Docusign would create more efficiency within the marketplace.

Oct 09, 2012 10:00 PM