Am I an idiot or is the other guy?

I recently received a phone call from a referred prospect that needs his roof replaced. Upon arriving at the prospect’s home, he presented me with a set of plans to measure the roof, as opposed to walking the roof (it is quite steep in areas) and he presented me with his insurance settlement.

I measured the plans and came up to within a square of what the insurance adjuster came up with as it is a steep but simple roof. Now, I’m not a stormer and primarily do about 60% new construction high-end slate, clay tile, concrete tile, metal and shingle roofs and 40% re-roofing in the greater Houston area. Upon reviewing the insurance adjuster’s compilation of figures I saw that he included all of the accented hip / ridge trim, ridge vents, replacing all pipe flashings, protection of landscaping, protection of the paver driveway and patios, steep charge…etc. It was all there. No expense spared.

Having read all of the usual posters on this board complaints about insurance claim settlements, I expected the worst. I did my usual spreadsheet for the base bid, inclusive of GAF Timbeline HD, Timbertex, Prostarter, Shingle Mate felt paper, Stormguard in the valleys and at pipe penetrations, pre-finished drip edge, 1.5" hot-dipped nails, new lead jacks, pre-finished roof jacks & step flashings, etc. I was extremely suprised to find that based on the claim settlement that we could do the roof for the settlement amount ($28K) and make about 60% above cost. Yes…60%.

Now, the homeowner wanted me to also bid GAF Camelot II. No problem for me. Done them before and know what it takes to do them properly. So I did so and only added in the actual cost difference between installing the Camelot II (a little more labor because it goes a little slower, the difference between the Timberline HD price and the Camelot II price and switching out the Prostarter for the more expensive Weatherblocker starter).

I felt pretty good about my pricing and left it at that.

Homeowner gets a second bid. I expected that. Homeowner had 2nd bidder bid work exactly the same (so he says and I believe him & have no reason not to based on his extreme interest in each product I said in writing that we would use). 2nd bidder said he would do the GAF Timberline HD for the insurance proceeds (pretty much what I did so no problem there).

Turns out, the Homeowner wants the Camelot II over the Timbeline HD.

So, 2nd bidder lowered his price to under the insurance settlement amount ($28K) to $25K for the Camelot II.

Homeowner goes with 2nd bidder. Go figure.

So, am i the chop or is the 2nd bidder? If i’m the chop, where did I go wrong?

2nd bidder…

THIS insanty is why i’m glad i’m retired from roofing i seen stuff like this all threw my time i was in roofing people don’t know they just pick prices out of the air

Sounds like a hungry business owner to me, unless they are getting supply from someone else?

The homeowner may have showed him your bid and asked him to beat it, so he could keep the extra 3k to pay his deducible?

I’ve been approached by homeowners who want me to write a receipt of say 20,000 on an insurance job where they pay out 20,000 less their deducible but want me to really charge them say $16,000. I never go for it, its fraud, or at least it sounds sketchy to me.

Or maybe the guy is a dumdum. I’ve been outbid on a simple $6,800 ranch by as much as $3,000. I hope the $3,000 option lasted even 90 days. :shock:

Neither. To be blunt, though, you’re may not be a very good Sales Person. The HO apparently simply went with the lowest price. You may have not given him any compelling reasons for wanting to do business with your company. If he wanted to do business with you, he could have come back and asked you to match the bid of your competitor. If he really wanted to do business with you, he would have paid your price.

I ALWAYS assume we will be the higher bidder. Therefore, I always KNOW we need to sell the value of doing business with our company. If I can’t (our Sales Reps) cannot “sell” the HO on the additional value we provide, why would they pay more to do business with us? If we fail to properly explain and demonstrate that value, shame on us, we deserve to lose.

On an insurance job, you should have had the HO sign a contingency which would have eliminated any bidding “wars”. You said the majority of your work is new construction - which is usually priced substantially less than remodel work. Likely, your pricing was for new construction rather remodel which would explain why the adjuster’s price seemed high. It probably was - to you, at least. Probably not so much for contractors who regulalry do insurance work.

Then, there’s the problem for the HO if he/she ever gets audited and asked what happened to the money he/she put in their pocket or used to pick up that new 3D led TV they’ve been thinking about for awhile.

The information is out there that will teach you how to do ins work the right way so you don’t make the same mistake again. Good luck!

Please don’t take my responses as defensive…I’m just responding.

AD, I’m a pretty good sales person. I do about $4 million a year in gross sales in a notoriously “cheap” roofing market. I don’t think my lack of salesmanship was a problem. Lowering one’s price and giving away money does not constitute good salesmanship. Regarding the HO coming back to me and asking if I would lower my price, my answer would have been “no.” I would never lower my price on more expensive product to a level below a less expensive product. That is insanity and will lead to the eventual thinning of the herd of which I do not, after 20 years in this business, intend to become a part.

LMB, there was no reason to offer a contingency contract to the HO. He had already settled with the insurance carrier and had his money in hand. Case closed. While I did indicate that the insurance settlement seemed “high” and we mostly do new construction, in no way did we “underbid” outside of our norm for re-roofing.

Believe me, we do a fair amount of re-roofing high-end properties in the Houston area with upgraded materials (Grand Manor, copper, clay tile, slate…you name it). We have never been accused of being cheap. Ever. The insurance company settled with a huge amount of money when compared to what we would normally bid for just a regular old re-roof with absolutely no bells and whistles.

I just found it laughable that another guy would give away money. Such is life.

It seems my post was misunderstood. My point was, if the buyer did come back to you, it is an indication they wanted to purchase from you. IMHO, selling is mostly about convincing the buyer that if all things are equal, they would prefer to purchase from you. If they want to purchase from you, you’ve won 51% plus of the battle. Once you’re there, now you simply have to provide them with justification to pay more for doing business with you. In the case you described, it sounds like the HO simply made a price buy. I know Houston is a tough market. I was not proposing you would cave in and lower your price had he got back to you, I was simply saying the fact that he didn’t get back to you at all COULD have been an indication you didn’t sell him properly. And BTW, perhaps not. The buyer may have decided upfront he was going with lowest price period. I certainly didn’t mean to insult you or your salesmanship in any manner. That’s the problem with the written word, you can’t always communicate your intent. Combine that with me being blunt to a fault and I sometimes come across more harsh than I intend to.

Why I answered 2nd bidder on who’s the idiot…but like ya said…such is life… :?

You said the estimate had all the bells and whistles. I would be curious to know if you retained a copy of that estimate. If so, can you share it to see if it truly had all that is required and then some.