Are Contingency Agreements Enforceable When Selling Storm Damaged Roofs?

Contingency Agreements: Are they enforceable? Legal and binding? What are my options if a homeowner backs out? I share my experience and opinion in this video.

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[TheRoofStrategist]

How do you enforce your Contingency Agreement?

[shaynewheat]

I literally watch your videos everyday I'm new to the salesman life iys been a good year I've learned a lot from all your videos keep em coming

[Jiwuwawanco]

Great job 👏. Thanks for covering this.

I think one of the most important things you said, and said early is that state laws matter. It’s the same with real estate, professional licensing, everything. State laws drive the show.

Very pragmatic view that refocuses on generating more sales and moving on. Also of not letting that negativity take root in your head. AKA: know how to pick your battles.

[patrickruegemer]

I agree with you Adam that contingency agreements are a glorified handshake and the simpler the better when using one.
I like how you explain it's a closing tool. I use it with the same mindset. But I don't ask for a signature the day I do the inspection. In my earlier years working for a different company I would lose more deals by trying to get people to sign after the inspection. And even if people sign they have a three days right to cancel. In a hot market competitors will convince them to cancel. And the people who want out will find a way regardless and principle is expensive chasing those.

Last year I sold 2.5 million, 1 church the rest residential.
All door knocking and referrals.
I didn't sign a single contingency.
My thought is when you knock on the door they are half expecting you to trick or scam them somehow. Yes by the end of an inspection with a good presentation you can overcome this, but I've found that by being up front and honest with homeowners has worked well for me.
I explain that I'm willing to invest the time and effort meeting with the adjuster and assisting them with the insurance claims process. I ask them to please not waste my time if they know they will be using someone else and in turn I will be up front and honest with them and not waste their time.
I leave them with a list a references and information about my company and tell them to look into us and make sure they are comfortable moving forward. I set a day to follow up with them after they have a chance to look into us, but explain very clearly that once the adjustment is scheduled and I go to the appointment that I am assuming the homeowner has done their homework and we will be doing the work.
I explain that I don't get anything unless I can bring back a job for my crews. I ask them to please not waste my time or use me too get it through the approval, just to have a nephew or someone they know actually do the work.
I turn the tables on them and call on their honesty and integrity and am asking them to not trick or scam me.

[bebop]

I have my customers sign my contingency contracts before I get on the roof. My contracts get signed after I file the claim so I have a claim number to put on the contract. At the bottom of my contract it says that my company is working for insurance proceeds where they sign. Also it says that if insurance pays and they go with someone else or don’t do the work in 90 days. My company is to be compensated 15% of the RCV. I explain this VERY clearly with my customers.
This has worked great for me

[cullen]

In Texas by statute it is illegal for the contractor to negotiate the insurance settlement AND also do the job.

The up to 10% is exactly the fee generally charged by a Licensed Public Adjuster, so my question is what services can a contractor LEGALLY provide that would justify this fee being paid to them vs hiring a public adjuster and allowing the contractor to provide a free estimate like any other roofer would?

Fortunately the company's website and the agreement steer clear of the problematic terminology used by the sales rep. Negotiate being his favorite word. So make sure you and/or your sales reps are staying on the right side of the line if you intend to enforce it. (Also helps if your rep is not doing / saying exactly the things your company website says are red flags / run )

Despite being a clear violation of state code, it is still apparently common practice to claim to help homeowner negotiate with insurance company along with the big no no .... eating the deductible. (i, e, padding the bill or skimping on quality materials to 'help' the homeowner manage the cost) It's tough enough to deal with the damage and the insurance rigamarole, without a fast talking sales rep ruining your company's image in front of a potential client by playing fast and loose with insurance fraud.

So again at least in Texas, you might want to clearly state what services you are able to legally provide the homeowner if you expect to collect 10% of settlement. Especially considering every other local roofing contractor is advertising free estimates and possibly upgraded materials to entice business to come there way.

And by the way I am well aware that whoever does the work is due the Deductable + the Settlement. But any competent contractor can provide an upfront bill of materials/labor to compare with settlement/competition before homeowner should agree to anything much less start handing over the total amount with nothing in writing to insure everyone's on the same page.

[tylericefoot]

I believe structuring the contract to be able to put a contractor lien on the property is important as well as doing some work to the home such as a tarp to make the lien valid instead of trying to get lawyers involved for 10-20% of a $20, 000 roof only if you’ve put a lot of work into the property

[David_L]

Look, I get that this is from the roofer/salesman point of view, this is how you make your money.... Still seems funny.... Fine for an honest roofer.... really leaves the consumer in a mess if dealing with an dishonest roofer. Let's say I sign an agreement then figure out the company is a scammer with loads of bad reviews and a bad BBB rating? It also leaves the consumer (me) feeling stuck if I want to get multiple quotes (shouldn't every consumer do that)? Here's my current dilemma... I have very new vinyl siding.... I'm not getting a clear response from the roofer on how the step flashing can be properly replaced w/o removing or damaging the bottom J Channel. W/O that contingency agreement I'd at lest be talking to a couple of different roofers about how they deal with this scenario.

[KingArtexerxes]

As homeowner, what if you already have the claim approved and first check from insurance company, and are looking for a roofer, then it’s no longer a contingency, right? No contract needed, right? Just some sort of payment expected beforehand, I assume.

[robertmcdowell]

Great job going over this. If you send in an invoice and do not get paid can you then write that off on taxes as a loss?

[joetwo]

What do you do if a customer has paid the acv check but when it's time to pay the rcv. The homeowner fabricates a "issue" and or refuses to pay or disappears? Is it worth small claims court or filing a mechanics lien?

[joetwo]

I call it "contract theater"

[pinayering]

I signed a contingency agreement, we got the check but the contractor wanted all the insurance check plus the deductible. Is this normal? He never even layed out the work to be done. All he gave was the estimate to the insurance. He did not provide the roof replacement ageeement. Told me 3 weeks ago that he filed the permit but then when i check the county he did not file as of 5/16. I told him then he filed the same day. Can i still get out of this contingency? I really want him to work for the project but he hasnt done anything except wanting to get the whole insurance money plus deductible. We also have interior damage. Nothing is done and no materials delivered.

[nate.jenkinss]

Just put a tax lien on their house. My old boss would do that for cheap/free with his company all the time.

[terrytully]

I signed a contingency agreement for a possible hail damage claim. It has been over 30 days now and no communication with roofing company, no insurance adjuster, just me leaving phone messages with no return calls. It seems the agreement is in place to protect the roofing company only and little to protect the home owner. The company has not performed. My question, how long is this agreement valid, Thanks

[thisdreamwespeak]

Comments that blow my mind.... "Why should the contractor get all the insurance money?". To me this is the stupidest thing to ask and be concerned about especially on an insurance claim! First of all it's not in estimate it is an assessment put together, by your insurance company. Now we all know they are a business and in business we want to make money with that being said you the homeowner are their product, so you can go ahead and rest assured that they aren't willing to overpay for a job especially knowing that your roof is not going to grow and it is not going to shrink. With that being said the price is made up by the amount of square ft on your roof and labor n materials per area code. These assessments are also are also priced assuming that you are going to be using a licensed bonded and insured contractor to do the job not "chuck n a truck" or your "brother n law". If they knew your brother-in-law would be doing the job and not the license contractor then they would only be sending enough money to make sure you can get the materials and nothing more, as they are not going to be paying you to do the job. As long as every single line item on that scope of work gets done as it is supposed to then the contractor has every right to work directly off that scope of work and price the insurance is paying for. I've you've already chose a contract I can assume he's going to do a good job. My advice is to find a contractor you can trust hand him the damn check, pay your deductible and get out of the way!