When your HOA or condo association decides that it's time to hire a management company or switch management, it can be difficult to know how to choose the right company. Creating an HOA Management RFP (Request for Proposal) is a great place to start. An RFP is a document drafted by your board that can help management companies better understand your needs, and help you get to know more about the companies you're considering hiring. This document can ensure that you and the management company you choose to work with will have a productive and long-lasting partnership.
Why Use an HOA Management RFP?
In essence, when you create RFP and submit it to a management company, you're asking them to send you a detailed sales pitch so you can get to know more about what they can offer you. The point of requesting proposals is so that you can outline your expectations, and get all the details about why you should hire a certain company. When you get bids from a few different management companies, you can review them with your board and make a more informed decision about which one to go with. An RFP can also contains information about your community association, like its history and financial details. This information allows management companies to better craft custom proposals that will meet your needs.
Using an RFP helps you set all your expectations as to what the management company will do upfront, saving you more time and effort in the long run. Because each company will be answering the same questions in their proposals, it will be easier to compare all the proposals side-by-side. The more specific and detailed you are in your RFP, the better the proposals you'll receive. With an effective RFP, you'll lay the groundwork for your future relationship with the management company you decide to hire.
Creating an RFP
While it's true that your HOA management RFP should be quite detailed and specific, creating one doesn't have to be difficult. There are plenty of templates that you can find online to use as a springboard to create a more custom one that works for your community association. If you are interested in the one that we created, please feel free to use our Community Association Management Template, you can choose the format so it's easily editable for your community. At the very least, you'll want to include a summary of what you need the management company to do when you want it done by, what your expectations are, and any other requirements you may have. You'll also want to include more details in the body of the RFP, and ask for things you want the proposals to include, like references, proof of insurance, licenses, details of prior experience, and a plan about how they propose to complete your project.
Using an RFP template is a great idea because it gives you a picture of what a good RFP should include. From there, you can customize it to better meet your needs. A template will save you time and help you have a good foundation of where to start when writing your RFP.
What Happens After You Submit an RFP?
After you submit an RFP to a few management companies, you'll start to receive proposals that will need a careful review from your board. You'll be receiving important information about the companies like their background, qualifications, references, samples of their work, and, most importantly, an estimate of the cost of the project. Though they are providing you with detailed info, it's best to do a little research on your own as well, to make sure that what they're telling you lines up with what you can find during your research.
If you find that something doesn't line up or that the management company didn't follow your RFP and answer all your desired questions, you can always ask for clarification from the company. Every management company handles their RFP's differently so while you may be able to make a few direct comparisons, it's more likely that you'll need to consider how the management company differs to make your choice. For instance a local company may be able to provide an in person office for your homeowners while a national company may be able to provider better phone support. It's important to know what is essential to your board members and homeowners before you make a decision.
Once you have reviewed and evaluated the proposals, it's time to choose. Remember that going with the cheapest option isn't always the best idea. Though it's tempting to save money, you should consider what service level and value you will receive from that bidder. Choosing the cheapest option on paper may mean the management company's work is subpar, which will mean you'll spend more making up for it down the road. Make sure you consider the different pricing models of each company to ensure you are comparing apples to apples. Next, consider interviewing your finalists in person or via a web-hosted conference call. Ask if they can provide a live demo of their software, or demonstrate in real time how they will deliver value to your board, and community. Finally, when speaking to references, consider asking if the actual cost met their expectations from the agreement. Does the prospective management company deliver what they say they will?