Here’s an email I received and my reply:
Grant,
I have finally gotten things straighted out with the insurance company (my problem not theirs) and have done a more careful review of your quotation. As it stands the distance between the insurance and your quote is just too much for me to get my wallet wrapped around so I thought I would see if we could meet somewhere in the middle. The Insurance estimate is $6700 (before deductable and depreciation) and I have received about $3900. As I understand it after I get a contract to do the work I can re-submit to be reimbursed up to the replacement cost (less deductable of course) so I’m starting with the $6700 replacement cost from the insurance estimate.
Knowing that the Insurance folks will go “low-ball” I am willing to go 50% above this figure to $10,000 to get a quality job from a local company like yours…. so I would like to counterpropose this figure to see if you would like the business. If not I understand.
Thanks for your response
Xxxxx
My price was about $13K.
My reply:
Mr. Xxxxx,
I appreciate the offer and have thought (and figured) long and hard about it. When I set my prices, they were based on how much it cost to run my company and how much I needed to make and how much I had to pay to have and keep quality help. What other’s were charging didn’t figure into it. Amazingly, my prices were very close to others doing the same quality work.
To meet your offer, I’m faced with four choices. Screw myself by loosing money on the job, screw my help by underpaying them, screw you by cutting corners (you wouldn’t know the difference), or&
#160; a combination of the three. I refuse to do any of the above.
Good luck with your project. It’s hard to tell the stormchasers from the local “in it for the long haul” companies. Many small local companies with yellow page ads have been bought up and a lot of the locals are in panic mode and have taken the corner cutting route.
Regards,
Grant
Replies
Good reply. I don't negotiate a price although I have thrown in a little item here or there if I know they are apprehensive about the number. But I only do that after they have agreed to my price.
I think if you start negotiating it will continue through the job and then continue with anyone they recomend. I always enjoy reading how you handle things (the harley guys story was a good one lol) as you really seem to have a logical sense of business and think things out well. DanT
That's a logical, well conceived reply. Other than placing the "Good luck with your project" after the final paragraph, I wouldn't change one thought.
I'm impressed by both letters, actually. The HO is doing what he can to solve a problem. Without knowing exactly how contractors bid, his best bet is to look like he's going to persue other options if you don't meet him half way.
Your letter shows no sign of being offended by his suggestion that you reduce your price. Instead you clearly explain why it's not possible.
I'll bet that he'll be back in touch within a week or so.
Edited 10/3/2007 6:26 am ET by Hudson Valley Carpenter
Well done. Keep on.
Grant.
I will bet you have had highly similar conversations dozens of times this summer---- I know I have.
I expect next year to be totally off the charts----as we are ALREADY recieving calls from people who had their roofs BOTCHED by storm chasers.
It IS interesting though--how the insurance guys-who often haven't even SEEN the roof in question--manage to position themselves as the expert on what something SHOULD cost in the customers mind.
stephen
Hey grant--------
don't know if you saw it------ in another thread a couple days ago----------contractor mentioning an insurance roof job in Oklahoma( I think)--insurance company was willing to pay $165/sq.--contractor pleased with himself for doing it at $130/sq.
I can only conclude that labor and materials are free in Oklahoma.
stephen
I can only conclude that labor and materials are free in Oklahoma.
Yes, you are right about the free materials here in Oklahoma. But it seems I never get the mailings when there offered. I'm up against the same cr*p as everyone, pricing a job that I lose to a storm chaser.
Recently a potential client stopped by one of my jobs while walking their dog and asked if I'd look at there little eave and gutter damage. I did and offered a price that day saying if they'd agree soon,(within the next 2 days) I'd be able to jump them in my schedule and do it before I left the neighborhood.
The called 4 days later asking for a formal bid and could I add in the chimney repair while I was there. She informed me that the chimney only need 11 sticks.
Figuring this was going to be a hassle I sent them my regular big job bid packet and all it's glory, even asking for my usual 10% scheduling fee. This job was only going to be about $650.00 and could have been done already.
They informed they were getting other bids but really wanted to use me since they also needed someone who could do there kitchen remodel and plasma screen entertainment center later. Oh and could you rewrite the bid to show that I was going to remove the guttering as part of the eave repair...
Long story short as you did, I pointed out I don't compete or concern myself with any competition. I would like there job and would send a corrected bid sheet but if they chose me they would be #4 on my list of jobs and be done sometime late Nov-Dec.
Yesterday they sent the $65.00 scheduling check and are looking forward to having me do the work as soon as I can...
I'm not, but late Nov.-Dec. I might be hungrier.
If you stand your ground all will be fine.
Long winded but, hey! I've got an hour to kill before I head out today.
That 165 a square is what people are charging in NW Florida also. Most roofing contractors here carry no comp on roofers. It is cheaper to pay the tax bill for them than the comp.
Payroll services on roofing is in the 80% range.
Good for you!
I've learned, the hard way, not to negotiate on my prices. I might give someone a bit of a break if they're really in a bind, and don't have the money.
There's a lady in my church right now that I'm going to help, but won't be getting paid much for the work.
But someone just trying to negotiate a lower price because another contractor is cheaper won't get any sympathy from me.
And I don't give a discount for cash, either. I still need to show income for when I get around to retiring.
It doesn't sound to me like the issue is ANOTHER contractor with a lower price, the issue is the insurance company with a lower price.However, there is absolutely nothing wrong with a customer using other contractor's prices to negotiate with. That is why contractors need to detail what they are going to do and why they are worth the money they charge. If you can't show that you are worth your price, then you shouldn't be in business.
I just did a flood repair. I gave the HO my price, and let him deal with the insurance co. I have no idea where I was in price; I just know what I need to make to stay in business.
It probably did help that I've done work for this customer in the past, and they were comfortable leaving me during the day while they went to work.
I don't mind if a customer gets a price from another contractor. But if they expect me to cut my price just because they can get someone cheaper, well, it's not happening.
Even if it's comparing apples to apples.
Great reply. Odds favour you that he will come around
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The Insurance estimate is $6700 (before deductable and depreciation)
My price was about $13K.
That's quite a difference.
How much was the deductible and the depreciation worth ?
carpenter in transition
How much was the deductible and the depreciation worth ?
It's a 21 year old 3 tab (20 yr) shingle roof so I don't think the insurance company should be involved anyway. There's a lot of flashing on it which the insurance adjusters ignore. They spec 15 lb felt which I'm uncomfortable using during a tear off (in fact I've never used it). The disposal fees are not indicative of what they cost here. He wants an upgrade shingle. The roof is very cut up. He's in another county - 45 min each way at rush hour. It all adds up pretty fast.
I'm unsure of what his deductible is - probably $1000.http://grantlogan.net/
I was born in a crossfire hurricane..........shooby dooby do
tim-- I don't want to step on Grants thread
but AS explained to me this summer by the insurance people-----------
insurance companies track the average per square intalled price for roofing all over the us---and have it broken down by zip code.
the key thing is-- they just want to know how many squares----and they claim they can only pay the average per square cost--for that zip code. they couldn't care less about flashing--or that the house might have miles of eaves and cornice returns that need to be worked from ladders---they couldn't care less about landscaping to be protected--in fact couldn't care less about most of the things Grant and I have to be concerned about-----
-they don't care if the existing roof has 2 layers of asphalt over 1 layer of wood shingles( project finished monday)--or if the roof has 1 layer of asphalt over 1 layer of slate( project later this month)---they just want to pay the same per square price for everything.
as for disposal-- the price they 'allow"--for a dumpster-is less than what a dumpster costs---and they don't "allow" anything for actually getting the debris IN the dumpster, LOL.
Basically---they operate and set their payments- as if they don't have the slightest knowledge of how the work actually gets done--and they imply to the homeowner that the contractor is probably cheating them-if the contractors price is MORE than the "average per square price"
in a conversation Monday with an insurance agent---- he wants to know"why is there a difference between my price and YOUR price?"---------I still haven't found a polite way to tell the insurance guy" Because I know what it takes to roof this house,and you don't"
In short- there is ZERO relationship between what it actually costs-and what the insurance company wants to pay.
Best wishes,
stephen
I guess I'm pretty lucky then. I recently had to deal with the insurance company over hail damage to a slate roof. They meet with the roofing contractor who took pictures for them, and in addition to the price per shingle they added in extra for the height and steepness of the roof, and extra shingles due to the risk of breakage when removing shingles. And they were pretty generous with the number of shingles claimed too.The depreciation thing is somewhat annoying, but I understand the companies position.The roofing contractor on the other hand, was too difficult to deal with. Do contractors know how to write? It seems that taking notes is beyond their capability.
Dealing with insurance companies is a moving target. We don't do a lot of insurance work as we are generally too expensive. But let them get hit with a bunch going on and it seems like they would approve anything. So you can never be sure how they will deal with it.
I, just speaking for myself of course, take notes. And can read too. DanT
You're right that they are a moving target.We had a job about three years ago fixing some roof damage on a modular home. The home had significant damage during Hurricane Isabel ('03) and the insurance company (Farmers Insurance) replaced the whole roof.In the summer of 2004 a tree fell on the end of the house and cracked some rafters. We fixed the carpentry portion and got it dried in. There were probably three squares that were damaged but the insurance approved a full R&R of about 15 squares.So that's twice in two years the the insurance company paid for a full job. They probably still haven't made that money back in annual premiums.
Jon Blakemore RappahannockINC.com Fredericksburg, VA
Bryan--- you were not lucky----you are just commenting on something without knowing the real numbers involved.
for instance----4 man crew comes to tear-off and re-roof a 14 sq. walkable roof--say 5/12.--one day----and everybody is home by 3:00
same 4 man crew-- comes to tear- off and re-roof a 14 sq. roof--- only this time it's a 16/12.-- insurance company might "allow' an additional $260 for a "steep roof"
problem is---- realistically-- instead of one day of hard dirty work---we have 2 days of hard ,dirty, incredibly dangerous work---some how the insurance company thinks 4 men will work that second day for a total of $260( split 4 ways)
also Bryan,-since I am( ahem. LOL) a 4 time published author--- I can write ok.-I can also take notes.--------------
but those notes are for MY benefit-not the homeowners--not the insurance companies
if the homeowner wants to know how many squares the roof is-- he can get a ladder out and measure it himself( my price is not based on the number of square-unlike the insurance company)
if the insurance company wants to know how many squares---let them measure it.- if they want a pictures-well they better get out there with a camera.
our price--is our price------ if the homeowners insurance company pays for the whole thing------ we are happy for the homeowner
but if the insurance check is short of our price--- not OUR problem-that's the homeowners problem. I am not eating the difference--- that's for the homeowner and the insurance company to argue over--it's got nothing to do with me
in fact as the roofing contractor-- I should not even know what insurance company is involved--nor should I know the amount on the check---it's not my consideration.
I feel it's actually somewhat un-ethical for me to even talk to the insurance company--we should have nothing to do with each other--because the insurance companies' number---has no bearing on MY number.
Stephen
I like your general approach but you did yourself no favor in choosing to use the word "screw." Use of this softly vulger word only demeans yourself and the other fellow by implication. It indicates what may be your real feelings: "You're not gonna screw me fella." If you really want to keep this on neutral terms, I'd suggest a modification of your second paragraph..... such as:
To meet your offer, I'm faced with four choices. Loose money on the job by eliminating all profit, underpay my help, harm you by cutting corners, or a combination of the three. I refuse to do any of the above.
Notice that I also eliminated the following: ....(you wouldn't know the difference). Because, after all, how do you know he wouldn't know the difference. And even if he didn't, stating so is rather insulting.
I wouldn't copy any of what I've given you.... I'm no writer and this is all just off the top of my head. If it were me writing to a potential client, I'd spend a lot more time composing the letter and then give it to my wife for proof reading and tempering.
Always stay on the high road.
you did yourself no favor in choosing to use the word "screw."
I know you're right and I thought about my choice of words long and hard, but that is exactly what is going on. Since June when the storm occured, I've written 70+ storm damage proposals and have gotten exactly none. I did one job, but I had already bid it before the storm hit. Before the storm chasers hit town, my proposal acceptance rate was about 80%.
I have told the last thirty of these folks that I'm not interested in bidding against storm chasers, so if they're gonna compare my price against their's, please don't waste my time. They have pleaded and begged for me to price their jobs. I have done so at great expense to myself and got nada except offers to loose money. He was one that wouldn't take "NO" for an answer.
As far as the "you wouldn't know", that was given as a warning to closely watch the cheap guys. These stormers are doing 5-6 roofs a day. I stopped and watched one crew working for a couple of minutes yesterday. There were 17 guys on the roof. Several on the ground - I couldn't see the back of the house to count them all. They were already shingling planes that were not completely torn off. No underlayment.
I agree that comment was a little condesending, but so was his offer.
And all this doesn't matter anyway - the email was sent before I copied it here.
But, thanks for your comments and everyone else that threw in their $.02.http://grantlogan.net/
I was born in a crossfire hurricane..........shooby dooby do
Did you see Jaspers commercials on TV? Hottie face and talker, and guys on roof with out ANY harness or even a tool bag..wassup wid dat? LOL
Spheramid Enterprises Architectural Woodworks
"If you want something you've never had, do something you've never done"
That's who I was watching yesterday. I've seen her at ABC driving a big yellow Hummer. There's several of them running TV ads and none of them have harnesses on in the ads. There wasn't one visible on the job I watched either. Problem is, if I called OSHA on them, the job would be done by the time they got there.
Did you have your harness on today?http://grantlogan.net/
I was born in a crossfire hurricane..........shooby dooby do
"Did you have your harness on today?"
Nope. No place to tie off to.
Atleast we had our tools on..see?
View Image
End of day...
View Image
Try to remeind dale in themorning, we need more slate jacks, thanks.
Edit, DAMM we left the solder bag up there...didn't see it till I saw the PICTURE, I hope it dont rain on the Seivert..LOL
Spheramid Enterprises Architectural Woodworks
"If you want something you've never had, do something you've never done"
Edited 10/4/2007 8:46 pm ET by Sphere
No place to tie off to.
Boom lift or top of the dormer.
It's your asss.http://grantlogan.net/
I was born in a crossfire hurricane..........shooby dooby do
Yeah, it is. I'd rather fall then swing. And, OSHA don't have the gate code.Spheramid Enterprises Architectural Woodworks
"If you want something you've never had, do something you've never done"
I like the 17 men part. I hate when people tell me with admiration oozing from their voices that "they had a dozen or so people on that roof, just a working--did the whole thing before two'oclock". I have seen them, all Texas trucks doing the work and gone. I suppose it puts me out to hear such things. I want those roofs but this place has been invaded by out of town roofers so that is the slowest part of my work now.Nobody is as good as they seem, nobody is as bad as they seem either.
It's just triage.There's no way local roofers can redo all the roofs that get damaged in a big storm. All the storm chasers do is apply bandaids until the locals can do a good job.Some of the bandaids will have to be replaced right after the next big rain, but the locals can handle that little rush.Most will last 5 to 10 years giving you plenty of time to get to all of them.SamT
It's just triage.
Good point. We've already done two repairs where the chaser has already left town. And we're in a severe drought. It's only rained about once a month since this hail storm in June.
I can already hear myself: "So you had this roof done by who? And the number's been disconnected? How awful."http://grantlogan.net/
I was born in a crossfire hurricane..........shooby dooby do
There's no way local roofers can redo all the roofs that get damaged in a big storm.
I disagree with that in this case. Shingle hail damage doesn't start to leak immediately. Busted vents and skylights do, but that's triage - figure which jobs get priority. The shingles don't need to be replaced today. The hail has reduced their life span, not destroyed them.
There's also a lot of independant insurance adjusters that are in the pocket of these chasers condemning roofs that are not damaged. The job in question is one. It was worn out two years ago. I've seen numerous roofs that were not damaged that are getting replaced. I've also seen several that should be replaced that weren't.
http://grantlogan.net/
I was born in a crossfire hurricane..........shooby dooby do
"I've written 70+ storm damage proposals and have gotten exactly none."
We just had a bit of flooding in our area this summer. We bid 35 jobs and got one $1800 floor repair. I decided that we are going to go to a policy of charging $50 per next round. We won't get everyone to admit it is for the insurance money but the ones we do are going to hear "$50 paid when we arrive and we will credit that back if we get the job".
The ones that trick us or that we miss will still get theirs quoted but I am either going to pay for some of the wasted time or run a lot less after the next storm. DanT
I heard you might be passing thru here in the next couple of weeks. Any truth to that rumor?http://grantlogan.net/
I was born in a crossfire hurricane..........shooby dooby do
Yep, going to be able to make it for lunch? Hope so. DanT
I'd like to if I can work it out- keep me posted on the details.http://grantlogan.net/
I was born in a crossfire hurricane..........shooby dooby do
The chasers got me to, after Ivan. Just wait. You'll be fixing the roofs in your area later.
When the next hurricane comes, we'll have shingles from here to Alabama. Those roofs that aren't to code will fly when the wind gets high.
I've written 70+ storm damage proposals and have gotten exactly none
It's past time to change strategies then. I would charge for writing proposals with the charge deducted from the contract price when the proposal is accepted. After all, you're the local guy with plenty of testimonials, right?
After all, you're the local guy with plenty of testimonials, right?
Yeah, that's the whole problem. I've got tons of work for everybody but my shinglers. And I've got plenty of work for them starting up again next week, but I've been trying to find them work for the last 3 months so I don't loose them.http://grantlogan.net/
I was born in a crossfire hurricane..........shooby dooby do
And I've got plenty of work for them starting up again next week, but I've been trying to find them work for the last 3 months so I don't loose them.
When I was in my early twenties I tried a few sales jobs. Although I soon found out that I wasn't cut out for that kind of work, I did learn enough about presenting my product or service to help me make a better impression than contractors who didn't have that training.
I'd suggest that you go to a book store and spend some time checking out books on salesmanship. Pick one or two that appeal to you and get some formal education in selling. I hot darn guarantee that you'll get more jobs. ;-)
I hot darn guarantee that you'll get more jobs.
You're not grasping what I'm saying. I have all the work that I want. I'm filled up thru the middle of next year. I just had a lull for one of my crews. I normally have about an 80% completion rate. I've read the books several times. I can usually qualify somebody in a heartbeat.
There's probably 50 companies that have chased this storm into a town that had maybe 30 roofer's ads in the yellow pages. The reason my shinglers are slow is that other trades are holding us up. On one job, it's the bricklayers. Another, it's carpenters. Just got a color selection today on a 100 sq tile job that's been ready for 2 months. Be another two months 'til I get the tile. I've just been trying to stir up some fill in work.
This is about Storm chasers swooping up work I would normally have gotten. I know how to sell quality. I don't care to learn how to sell scam. I'm not really complaining about the storm chasers. I'm not really complaining at all. Just telling a story. I've chosen to hold firm when a lot of the competition is panicking and dropping their prices (and quality).
http://grantlogan.net/
I was born in a crossfire hurricane..........shooby dooby do
From a previous post of yours: "Since June when the storm occured, I've written 70+ storm damage proposals and have gotten exactly none."
There's the statement that made me think that you were having some problems with presenting your services effectively to potential clients, people who had called you and asked for a bid.
Forgive me if I got the wrong impression about your abilities as a salesperson but that's the longest dry spell I've ever heard of.
that's the longest dry spell I've ever heard of.
I've gotten other jobs, just no storm damage repair where the insurance company is setting the prices. And all these leads were referals - friends of friends, etc. I don't have any advertising.http://grantlogan.net/
I was born in a crossfire hurricane..........shooby dooby do
Grant,
our hail storm was june 8th.
before june 8th I was closing at a rate hovering around 54%---and very happy.( time for lots of bicycling and also time to push my business into the areas of exterior carpentry I want to take it--plus time to start marketing in a new neighborhood)
after june 8---
for weeks averaging 15 calls a day
I stopped counting the number of roofs I climbed on at 200( at this point I am sure it's around 300)
I have written 129 proposals-out of those 129-- the closing ration is under 25%, but I am booked into next July at this point.
my prices are EXACTLY the same as last year---but If I look at the jobs actually sold--with 20/20 hind sight-- I was ALWAYS going to be doing those jobs--VERY few suprizes on that list.- most of them--- the customers told me" just come and tell us how much it will be, and do it when ever you can get to it"
virtually ALL of the problems have come from the other75% of proposals written ,but not closed----and the additional 150 or so roofs looked at but not quoted.
the consumers are getting hosed. I have driven by plenty of roofs-that I examined and told the homeowner they really don't have a problem---only to see 15 guys roof it in august---climbing all over a 10/12 roof with NO jacks,No toe boards-----scuffing the heck out of the brand new shingles-----a lot of these people now have new roofs---more damaged than the one the hail hit!!!!
to be fair--- i have seen a few of these out of state guys--working safer than we do. HARD HATS( imagine), harnesses, aluma pole set up's, nice toyota tundras--- but the great majority--15 guys and a handfull of old couch cushions LOL
i have already pulled my Yellow Pages Adv. out of the phone book for next year. i will work like a dog with a full crew next year----and then after that point, I think I will be semi retired from roofing. word of mouth ONLY for roofing( primarily to fix the botched roofs caused by this years storm)---and instead concentrate full time on exterior carpentry and marketing my services in an older neighborhood.
Really, i wish this was October 2008 right now.
stephen