# Valid Contingency Agreements?



## BamBamm5144 (Jul 12, 2008)

I know this subject has been beat to death.

I don't chase storms but I do get insurance work. Two weeks ago I met with a guy and his adjuster three times. He said I guarantee you will have the job, never got anything signed. Guess what... he found someone cheaper to do insurance work? WTF?

Just got back from meeting with a lady. I was the only guy to answer my phone today and to come take a look. Half of her roof is blown off. I told her about the guy two weeks prior and she says she would NEVER do that. Well, I want to make sure.

What do I all need in order to make a contingency agreement valid? Since I did not go door to door, do I still need the 3 day right to rescind? I know I need to include a scope of work but what else may I need that some of you smart guys know about that I don't.


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## thom (Nov 3, 2006)

You write up a detailed contract. This is basic contracting. Your contract includes a detailed scope of work, price, payment schedule, and terms of the agreement (generally referred to as the fine print). 

It doesn't make sense to take a man at his word if he refuses to put his signature to it. In reality, it matters not. All contracts regarding real estate must be in writing. There is no verbal contract or verbal agreement. In real estate those terms are meaningless. If it isn't in writing, it didn't happen, at least it didn't happen in any meaningful sense.


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## jmiller (May 14, 2010)

thom said:


> You write up a detailed contract. This is basic contracting.


Great question IMO. 

I guess if you'd been burned a few times for four or five plus hours of work meeting adjusters and arguing their lowball tactics in defense of a homeowner you just want to do a good job for only to have them go with the company who promises to pay their deductible you'd understand that contracts for roof replacements don't get signed until the insurance company has decided (which you helped persuade) to buy the roof. 

How do we make that 4/5 hours and any temporary repairs a guarantee that we get the contract? Sample document?


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## MJW (Jan 27, 2006)

jmiller said:


> How do we make that 4/5 hours and any temporary repairs a guarantee that we get the contract? Sample document?


You should get paid for this, with the right adjuster. Usually they don't volunteer anything. Next thing is getting that additional check from the greedy homeowner.


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## Slyfox (Dec 22, 2007)

I didn't/don't like the pre-work contract because it causes me to spend even more time trying to get the job.

I now charge for storm damage/insurance estimates, money to be paid in full at first meeting and will be deducted from the total cost after completion, assuming I get the work.
If their just looking for a high bid to submit to the adjuster "which atleast one insurance company in my area requires multiple estimates before they pay a penny" than atleast I'm making a few bucks for the service.


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## BamBamm5144 (Jul 12, 2008)

That is a good idea SLY. At least that way you will instantly know exactly what the homeowner is looking for. What bothers me the most about it, is that these people initiate contact with me so there is a reason why they trusted me enough at first to give me a call be either it from the website or referral.


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## jmiller (May 14, 2010)

I went to check out a pending claim Tuesday where a poorly done transition to a low sloped addition was leaking. There were also five or six blown off three tabs (not nailed correctly), which along with the active drip is probably why they filed initially.

I felt bad that they had even called their insurance company already because I assumed they'd fix the drywall and insulation and after deductible only save them a couple hundred bucks and leave them to fix a poorly installed roof on their own dime.

So I submitted a repair estimate to replace the 3 square low slope, and also to get their insulation/ventilation up to code because the addition had absolutely no insulation in the 1 foot tall attic space and we could easily do it from the roof by taking a couple pcs of decking off while the roof is being replaced. [There were also four foot sections of missing insulation over other living areas, five gallon buckets keeping insulation away from can lights, and batts packed tightly to the underside of decking like someone was on a mission to stop the air flow (didn't matter because there were no soffit vents........ This house was inspected and purchased six months ago!)].

So I'm at two + hours now but I feel terrible for this guy and we don't charge for estimates anyway. I did a temporary repair that took ten minutes and sent him an invoice along with the estimate and told him show it to the adjuster (actually at this point I'm up, but there's not always a temp repair needed unless you're one of those tarp happy storm chasers). He calls back and said the adjuster thinks we should replace that whole side of the house because of the wind damage, and to go ahead and price the other side too so you don't have one side four years old and one side new. All I can figure is this particular company is trying to change their image.

I didn't even have to go there or talk to the adjuster, but I feel like I really sold him on getting this homeowners problems fixed right. Asking the HO to sign anything just because I did what I hope we can continue to do doesn't seem right.

But it has happened time and again that we don't hear back after sending the estimate, so we're going to have to think of something.


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## jmiller (May 14, 2010)

MJW said:


> You should get paid for this, with the right adjuster. Usually they don't volunteer anything. Next thing is getting that additional check from the greedy homeowner.


One lady we did last year went on a 6k shopping spree with her depreciation check. What's another lien on the house have to do with my designer jean buying habit?


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## buildpinnacle (Sep 2, 2008)

*Emergency Repair Authorization*

Insofar as emergency repairs...use the attached form or some variation. It addresses all that needs to be addressed. I have a million of these, but here is one for the team. I recommend you always have legal council review any form for it's validity and enforceablility. If the job has blown off roof, fire damage needing board up, etc. I get this signed and let them know my crew is on their way. I don't leave until my crew gets there and we get the property watertight or secure. Emergency crew response is a minimum of double time per man hour plus materials. The insurance company will pay for all temporary and emergency repairs 100% without deductible and with no depreciation. The property owner does not even have to use you for the project if they sign this form. It is strictly to get them watertight and secured right now. Work off the emotion of the moment and drop whatever your crew is doing to get over there and handle this and you will get the signature. You need to get their policy number, claim number, etc and fax this directly to the claims department along with your itemized invoice. You should be paid directly for emergency repairs. You can add a direct to pay authorization as I do on some of my other forms. It appears that I could start a website with all the forms I have and make a good nickel selling them.  This is a pretty mundane example, but it's free.


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## buildpinnacle (Sep 2, 2008)

I have some blank price contingencies I can forward and some work authorizations if you will PM me. I don't want to post them publicly on the web.


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## Slyfox (Dec 22, 2007)

BamBamm5144 said:


> That is a good idea SLY. At least that way you will instantly know exactly what the homeowner is looking for. What bothers me the most about it, is that these people initiate contact with me so there is a reason why they trusted me enough at first to give me a call be either it from the website or referral.



Sorry, guilty of incomplete information in that post I made, I should have included the numbers/percentages for insurance estimates.

2009, I was contacted 18 times for insurance work estimates,
did all of them for free and got 6 jobs.
I was high bid/or equal too the high bid, on all 6 of those I got.

2010, I was contacted 22 times for insurance work estimates,
11 of those home owners paid me $150.00 and 1 paid $300.00 to give the estimate, the other 10 said no thanks.
Out of the 12 I estimated, I got 4 1/2 of the jobs.
(the half was I got the roof work, but not the siding)

You can see the sales percentage isn't going to work for everyone,
especially if you run a/multiple full time crews.

I'm a lone wolf with a couple part time workers.
I also have a couple good, solid, legal subs that I can rely on to help with siding & gutter work.
Thus, the numbers work for me.


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