Seven Steps to Finding the Right Reserve Study Firm
Your association’s reserve fund helps your board anticipate its future – and budget for it, too. This fund gives you the power to maintain the quality and curb appeal of your community by funding projects that are both necessary and expensive, such as roofing, paving and remodeling or updating common areas.
Although establishing and managing this fund can get a little complex, you don’t need a crystal ball to see the future of your association...you just need the right reserve study firm to help. Follow the tips below to help your association find the right firm.
1. Paint a picture of your association.
First of all, any prospective firm you work with will want to know everything about your association. Collect information on your association and develop a complete profile of it. Gather information that includes location, number of units, description of buildings, list of amenities, age of the property, management structure, current budget, etc., and have that ready before you begin speaking to firms.
2. Create a list of possible candidates.
Searching for firms is easy. Good property management companies maintain a list of qualified firms; ask your property manager for advice or recommendations on firms they know of. Get recommendations from other area association boards. Don’t forget that you can also check with your local chapter of the Community Associations Institute or go to caionline.org.
3. Plan to ask the right questions.
Decide what criteria is most important to your association board and use that to create the questions you’ll ask each prospective firm. You will get a clearer picture of the firm and what it can do for you by asking questions such as the firm’s length of time in business, number of studies performed per year, company background, specific experience with communities like yours, funding methods, pricing methods, turnaround times, association involvement and types of guarantees. Identifying the most important factors when it comes to hiring a firm for your association will help you narrow down the list of candidates.
4. Gather information about your firms.
Contact each candidate firm and ask for standard information, such as examples of previous reports they’ve done for other associations. Ask the questions you created earlier and make sure to write down all of the answers. As you interview more firms, you may find that your questions evolve as well; don’t hesitate to follow up with previous interviewees so that you have the same information for each prospect. Request three references from each.
Your research is done; now it’s time to see how the firms stack up against each other. A comparison matrix can be a helpful tool for this task. Create a spreadsheet that lists your hiring criteria down the left side, and your candidate firms across the top row. Use your research to fill in the boxes, nothing which firms fulfill which criteria. While doing this, you’ll also want your accountant to review the sample reports your candidates provided to make sure they meet your federal filing needs. When your chart is complete, eliminate the prospects that don’t meet your most basic requirements. The rest are up for further discussion.
6. Interview references.
Speak to each of the associations that were listed as references, asking each one simple questions about their experience with the firm. Ask things like whether the association was pleased with the firm’s work, how similar their association is to yours, when the study was performed, if cost expectations were met, if the study was delivered on time, if there was something they wished the firm had done differently, whether they considered hiring other firms, what factors they used in choosing this firm, and whether or not they’d hire them again. Be efficient, friendly and respectful of their time.
7. Make a choice.
You’ve identified candidates. You’ve interviewed them and eliminated the non-contenders. You’ve developed a candidate matrix. You’ve spoken to their references. Your board has all the tools it needs to make an informed decision.
Partnering with a reserve study firm can have a huge impact on the future of your association. Follow these steps and you’re sure to find yourself working with a quality firm that is the right firm for you. For more help, contact FirstService Residential, South Carolina’s leading property management company.