Are Contingency Agreements Enforceable When Selling Storm Damaged Roofs?

Grab your popcorn for this one. Are Contingency Agreements Enforceable? I've been getting this question a lot. I've responded in the comments. By the way, thank you for dropping comments on the videos. Constructive comments like this lead to new videos and it helps enrich the community in each one of our lives. Because I respect your time. You're spending valuable time and resources being here with me today and my mission is to help you leave in a better position than you were with actionable strategies to use in the field so you can do what you smash your income goal and give every customer an amazing experience. Welcome or welcome back. My name is Adam Bensman and today I'm going to open the can of worms on contingency agreements and if they're enforceable, I'd like to hear your input on this as well. Listen, I learn regularly. Every single training I run, I learn from people who are there, including brand new reps. Now I'm going to share my experience in this video, my learnings and my point of view. Whether you agree or disagree is totally fine. I All I ask is that you be cognizant and respectful of supporting the growth of others. And if not, that's okay too. You can keyboard commando away and I'm sure people will be entertained. All right. Now let's get to it. Are Contingency Agreements Enforceable? First part of this it depends on who you ask. What I'd like to do first is lay the foundation of what a contingency agreement is and why it is used before we get caught in the weeds. Excuse me, about the legal side. So what is a contingency agreement? Contingency agreement is essentially a glorified handshake that says we're going to get your roof approved or help you get it approved by the insurance. And if it is, we get to do the work. Cool. Great. That's the contingency agreement. Now, in a playlist I've done, which I'm going to make really easy for you to get a hold of if you click on the link in the description for the Pitch Like a Pro Roofing Sales Training Video Library. Or you can go to theroofstrategist.com it'll bring you right to this page in here in my Pitch Like a Pro Roofing Sales Training Video Library. I've done an entire playlist which you can click and binge through on the contingency agreement and its use as a closing tool. Now I highly recommend you check that out and again, it's available for free@theroofstrategist.com or you can click the link in the video or podcast description. The reason I bring that up is, is it's my belief that the contingency agreement is first a closing tool. Okay, now what do I mean by that? It is a way to lock in the deal, have that handshake say we're going to do this work for you and we're going to be the contractor of choice to actually do the roof. Next, it is again contingent upon approval, meaning if the insurance company says no, we're not replacing it, they don't owe you anything. So it removes risk, okay? So contingent upon approval. And I've done another video a couple weeks back on risk reversal by removing people's fear of signing the thing. And when used as a closing tool and contingent upon approval to use risk reversal, we end up earning more business. So what it is not quite yet is a contract. Okay? It is not yet a contract by law. And again, this is where if your every state law is different, okay? And if you disagree with this or your legal counsel has been different, drop a comment. But my understanding is it's not a contract until money changes hands. Now you go through and do this work, it's non billable, all right? So if they cancel on you, it's not a contract yet until money changes hands. So here's where it gets interesting. Most people on their contingency agreement have a 10 to 20% cancellation, meaning let's say we get the insurance company approved for $10,000 roof, we have a 20% cancellation. If you decide to work with someone else, it's on the fine print on the back or on the front. And if you back out, you owe us $2,000. Okay, now let's loop back to the is it enforceable, number one? Depends who you ask. Now let's get into the weeds. In my opinion, the number one reason to have a contingency agreement is to act as a closing tool. Our particular attorney wanted it to be nine pages long, said to myself, homeowner sees nine pages are going to think they're signing their entire life away and their firstborn. We're never going to get deals signed on this. So we made a decision as a company to say I'm more interested in this acting as a closing tool to help us secure deals and lock in deals on good faith because we will earn the business than I am of having it be bulletproof. So we elected for a single one page contingency that was double sided. The terms for them and Then all the fine print on the back. What this allowed us to do was increase the volume of people who were excited to sign it because of how we positioned it, which, by the way, I teach in that free video library, the picture like a pro roofing sales training video library. And if you want to learn, like my whole in home sales system, I do that with my program called the roofing sales success formula, which is an all in one sales training, sales strategy and sales system that's being used by thousands as we speak, from the smallest companies that started yesterday to some of the top 100 roofing companies in America. And I have plans for individual reps or for owners with a team. And in my closing strategy, which I cover for Storm and retail, I discuss how to position the contingency agreement as the closing tool. They teach the entire process. Now, there is a sample contingency agreement included in my program, but I just want to be crystal clear it is a sample. Because every state law is different. Some company or some states say, you know, your cancellation clause has to be in this type font, this typeface, this size on the first page with this number of days. The next one has it differently. So you just got to make sure that you're compliant with your local laws now. So let's get back to it. Number one, main mission, act as a closing tool. Number two, question, is it enforceable? I saw a comment on one of the videos and someone said, hey, it is according to my attorney. And the reality is it depends on your contingency. If you have everything listed out, could it be enforceable? The answer is yes. My next question to you is this, is it worth going after? Do you know what an attorney is going to cost you if you have a cancellation, you're going to collect 20%. Here's what most people do. Most of the people that I work with will send an invoice for this 20%. Okay? The last company I trained, it's funny, we actually talked about this, they sent an invoice. I had done the same thing. I did in fact, collect this on a commercial project I did when the property owner decided last minute not to do the work because he needed the money. And we collected that 20% cancellation. There are times if you see shaky feet with people, you can communicate this, okay, now what happens? You send the invoice, some people will pay it. It is true they will. And there are other people that won't. Now, let's say at 20%, if you have a $15,000 roof, you're going to collect 30 grand or, excuse me, $3,000, right? Someone double check my math. I'm horrible at it, but you can drop a link or drop a comment in my maths. So you're going to collect three grand by the time you invest all of your time, energy, resources and effort to collect your job file, submit it to the attorney, pay your attorney's fees, have them chase the homeowner, and for all of your emotional energy to go into it. My guess, if you are lucky, you may get paid and you might make $1,500 from it versus reallocating all those time and resources. Just go find a customer you actually want to serve and let bygones be bygones, because let me tell you, this principal is expensive. The other threat that you have is that by pursuing the legality side of the contract means your contract must be buttoned up. I ended up in an arbitration with a customer and his attorney, even though this was not the cause. They thought that we damaged the gutters, which we didn't. I had before pictures. He signed off on it. It's a story for another day. The attorney thought we doctored the pictures. We literally had before pictures and after pictures and the gutters were damaged in both. He. He'd signed off on them. They were timestamped. His attorney, this absolute, I'm going to say it, total slime ball attorney literally says to me, those pictures were doctored. So what do I do? I started laughing and then I realized he was serious. And then Mr. Slime Ball attorney starts diverting all this attention about the gutter damage to the terms of our contract and pokes holes in all of these different areas. Now, the funny thing is this was an $800 discrepancy that I ended up solving by kicking both attorneys out of the room and having a man to man with the gentleman sitting across the table from we got it solved right there. Did I get what was due and right. No. But principal is expensive. And he was willing to drag his feet with his little contingency lawyer poking holes at all this for hopes of some massive thing to just say we'll eat the 800 bucks to be done because he was ready to take this thing to court. Principle is expensive. So I want to wrap this up with an action plan for you. I'm going to give you my personal feedback and you can run with this or not. My opinion, number one, contingency agreement should be positioned as a closing tool and it should be advantageous for the homeowner because you will sign more deals. I'd rather sign 20% more deals because the contingency agreement is positioned and communicated the right way and lose a couple rather than making it bulletproof so no one can back out and screw me over. And I'm just going to be a grunt ball and I'm going to make sure they're bulletproof. And what will happen is you're going to sign less deals because homeowners are going to look through that and be scared. So I would rather deal with that. The next thing first course of action is to send the invoice in compliance with the cancellation details of your contingency agreement. And some people, by the way, do teach that you can review this with the homeowner so they're aware of that penalty. So you do lock that deal in, send the invoice. Many people will pay it, some won't. You can always, of course, follow up with a phone call and then it is up to you to should you choose to go the legal route, I'll tell you mine. Unless it was an absolute monster project, a commercial project, unless we had exorbitant amount of time, energy and resources getting something approved, that is the only time. And there were a couple of them that we did that for. But it's a very selective position otherwise to my sales friends out there and to owners, remember, sign more deals. Principal is expensive. Send that invoice, move on and go sign a customer that you are meant to serve. Hey, thanks for joining me in today's video. If you haven't yet done it, I'd love for you to join me to learn more about this contingency agreement, how to position it as a closing tool, and you can do that for free in my pitch like a pro roofing sales training video library. And if you want, I'd love to chat with you or you can chat with my team about our all in one sales training, sales strategy and sales system to learn the entire system to rock it out with your homeowners. All right, there's a link in the description below. You can always give us a call at 303-222-7133 colortext and I will see you on the next video.