Negotiating Contracts the Right Way
Negotiating Contracts with a Contractor After a Hail Storm- Ultimate Wind & Hail Damage Guide For Homeowners
A contract of any kind should be agreeable and fair to both parties. As mentioned in the previous articles in the series, the contractor covering your insurance deductible is not a good deal (and it’s illegal in many states and municipalities) – so that’s out of the question. But you can negotiate a few other perks that your contractor would consider doing for FREE without too much of a fight. Here are some tips for negotiating contracts:
Extended Manufacturer’s Warranty:
When you are negotiating contracts- ask the contractor about the extended manufacturer’s warranty. Extended manufacturer warranties are the best warranties available in the industry (average cost $540- average increase in your home’s value less than 0.5%).
Note: Although the average increase in value is small, peace of mind is priceless. If anything happens to your roof during the 25 year warranty period- the manufacturer will take care of it. Also, this maybe the best investment for the money because it will increase the appeal of your house if you decide to sell it.
Taking your gutters to the recycling plant does two things: 1) generates some money and 2) eliminates the use of landfills (average savings $35- no increase in value)
If your window screens are old and worn out, replacing the window screens will give a fresh look to your house (average cost of $450- average increase in your home’s value less than 0.5%).
Resetting your satellite dish:
Recover the cost of resetting your satellite dish after the roof has been replaced. (Average savings $110).
While negotiating contracts in the after storm situation(hail storm, wind storm etc)- keep in mind that a homeowner needs the contractor – not the other way around. Getting greedy and trying to take more from the contractor than they are able or willing to give might make the contractor want to move on to another job, rather than staying with that particular customer. Remember that there are relatively few solid contractors (QLCs) that are worth hiring out there; if you find one, hang on to him/her and they will take care of you.
Negotiating Contracts- Potential Upgrades
Also keep in mind that depending on how generous the insurance company was in their pricing, this will determine how much (if any) available money there will be for upgrades (although there are many cases where insurance companies under pay- in those cases there will not be an opportunity for free upgrades). With that being said, now is the perfect time with very little investment relative to the cost of improvements on your home, to get those upgrades you always wanted even if you have to pay for it out of pocket.
Tip: Usually a contractor will do additional work at a reduced rate since they are already at your house.
In my opinion, here’s the highest return on investment upgrades (you may consider paying for yourself):
An upgrade from your current roof shingles to the next highest quality level (average cost $735 – average increase in your home’s value: 1%).
Ice and Water Barrier (shield):
This greatly reduces the possibility of ice damming. An ice and water leak barrier should be installed on all eaves, flashings (including chimney), vents, and pipe boots (average cost $480 – average increase in your home’s value less than 0.5%).
Combination of Attic Air-Seal and Attic Insulation:
Attic insulation and air-seal in your attic will make your home 20%-50% more efficient (percentages vary depending on inefficiency of your home) (average cost $2100 – average increase in your home’s value: 3%).
Proper attic ventilation is essential for any home because improper ventilation will greatly reduce the life of your roof and plywood decking under your roof. Not to mention, proper attic ventilation greatly reduces the likelihood of mold or mildew in the attic (average cost $1250-average increase in your home’s value less than 0.5%).
New Windows and Doors:
If you’ve been thinking about replacing your windows and/or doors, this is a great time to do it because you are going to be undergoing construction. Efficient windows and door can reduce your energy costs and add a lot of value to your home. I’ve seen some QLCs throw in a few windows when a homeowner decides to replace all their windows. Since the contractor is already at your house, staging and supervision costs are reduced. (Cost range per window $500-1200 depending on whether it’s vinyl or wood windows – average increase in your home’s value: 5%)
The installation of new siding with energy efficient insulation behind it will not only increase the curb appeal of your home, but will also increase the energy efficiency (average cost – $14,000- average increase in your home’s value: 7%).
Kitchen & Bathrooms:
Exterior home improvements have always generated the highest value for the money spent, but if your exterior is in good shape, the next highest value item is renovating your kitchen and/or bath (cost depends on size and choice of appliances).
Note: On certain home improvement projects, the increased value of your home is 2-3 greater in dollar amount than what you actually spend on the home improvement.
*This pricing is for average house size. If you have a larger than average house it will be more, if you have a smaller house it will be less.
While negotiating contracts, remember that it never hurts to ask, but be fair. The more you take the less your contractor will make and there is a breaking point where it’s not worth it to the contractor to do the work.
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