What do you tell customers that cannot afford a roof? Do you give them financing options? Or do you just say save your money and call me in a year?
Sadly, most people that can’t afford a roof will also be denied financing. However, if you have financing to offer, that’s what it is for.
I’m on the other side - the customer that could not afford a new roof. But my roof was 33 years old, and many fascia boards rotted. Really needed to find a way to do it. I’m fine on the equity side, and financially could have done the home equity loan route. But… I have one room I tore down to studs/cement, still a work in progress. No financer would do the home equity without a full appraisal, and they all said that room would be a showstopper.
I heard about the www.heroprogram.com from one of the roofing companies, and started to see a few offering it as an option. I believe it’s only in a few states so far. It worked for me. Interest rate is a bit high, although still lower than trying to go the peer-to-peer lending route, and the taxes get tacked on to property tax bill as another line item. So I plan to pay it off sooner rather than over 20 years. But it did work to get my roof done now.
From what I understand the loan/lien then supercedes the primary mortgage even as the first to be paid back in case of default. Lenders can’t be liking that.
It’s not a magic bullet, and could get some into trouble if they already are stretched on finances. Not being able to afford the yearly tax bills probably get many into trouble. But it worked for me, and the addition to the yearly taxes isn’t a problem for me. Just saying it’s something they need to consider carefully.
I should probably also mention, that because it was about the only way I could find to get the roof done, I then cut down my shortlist of potential roofers to only those working with the HERO program. Some of them did offer some other financing options, but I didn’t look to see what the others were all about and/or if they’d need an appraisal also. HERO program did not require an appraisal, nor did it require a specific credit score. It seems based more on equity and payment history - and that worked out for me. And the program does require it be a cool roof (lighter color), or have additional insulation added to help make the roof more efficient.
I have never heard of the Hero Program before, but it sounds like a good program that brings together city government, lenders, and contractors to help in the community.
I recently wrote an article about programs that help people finance a roof, I was wondering if you could copy and paste your above answer into the comments section? I believe that your reply was very insightful and can help people that are looking for different financing options. The article can be found here: http://austinroofbuilders.com/advice/new-roof-finance-options/
This kind of dilemma is nothing new, of course. Deals fall through every day. But businesses that depend on long-term customer relationships have a particular need to avoid win-lose situations, since backing out of a bad deal can cost a lot of future deals as well. Some buyers resort to hardball tactics even when the salesperson has done a consummate job of selling. The premise is that it costs nothing to ask for a concession. Sellers can always say no. They will still do the deal. But many sellers—especially inexperienced ones—say yes to even the most outrageous customer demands. Shrewd buyers can lure even seasoned salespeople into deals based on emotion rather than on solid business sense. So how do you protect your own interests, save the sale, and preserve the relationship when the customer is trying to eat your lunch?
Surprisingly, accommodation and compromise are not the answers either. Often a 10% price discount will make a trivial difference in the commission, so the salesperson quickly concedes it. But besides reducing your company’s margin significantly, this kind of easy accommodation encourages the customer to expect something for nothing in future negotiations.
Compromise—splitting the difference, meeting the customer halfway—may save time, but because it fails to meet the needs of either party fully it is not the proverbial win-win solution. A competitor who finds a creative way to satisfy both parties can steal the business.
It depends on the situation ,if it’s senior citizens on SSI who are barely making ends meet we contact ABC supply and cut a deal for material at their cost ,we supply the labor at no charge to the elderly and Bill the labor to other jobs ,we get half of what we spend back at tax time ,this year we did 3 complete year offs and reroof jobs for 2 elderly couples my age " I’m 7w " and 1 disabled lady who also needed repairs to her wheel chair ramp ,if your clever with the accounting ,can get your supplier to donate or discount then none of your customers will go without a roof ,we’ve even arranged go fund me programs for people before .
It can go either way. You can save yourself the headache of trying to offer payments or financing that is a reach. Had a few times it worked out by offering a payment plan. The others it was a hassle with late payments etc. I would’ve loved to tell those customers to wait a year.
We offer financing to any contractor in our network to be able to finance more work for situations like these. As mentioned, if the customer has destroyed credit they most likely won’t be approved, but if they have decent credit and up they usually get approved.