How I’ve Saved 10K This Month Through Negotiation

Refinancing and renovating my home taught me how to get a better deal from businesses and contractors—no intimidation required

I’m currently refinancing my home and in the process, I’m renovating to get a new roof, windows, and HVAC unit. Those are all BIG repairs with BIG price tags. But, I’ve learned that everything is negotiable. The kicker is, if you don’t ask you won’t get a discount. In the worst-case scenario, you are actually charged more because the seller knows they can get away with it.

You never want to be in that position.

Here are some tips I’ve had to learn quickly this month, that I think could help you too.

1. Get Multiple Bids

There are hundreds of companies that provide the same exact services. Don’t be afraid to shop around. I recommend getting a minimum of three bids for every job as a general rule, but this really will vary in practice.

For example, I got three HVAC bids and spent about two hours with each contractor. I learned a lot in that time and I felt I had enough information to make my choice. I had the same experience with window contractors.

However, my roofing consults have all been via email, and I felt like I didn’t quite yet have enough information. Due to that, even though the first two quotes I received were very similar, I went ahead and scheduled two additional consultations.

The point of getting multiple bids is not just to hear what different prices you can get, or if one company is truly too outrageous, but to learn about the product you’re buying from the experts. No one is an expert on every item they own, and no matter how much research you do online before the consultations, I guarantee you will learn more when you talk to people.

I recommend speaking in person if you can and talking to as many people as possible. The more knowledge you have, the more tools you have in your pocket to use in your negotiations.

2. Make It Known You Have Multiple Bids

Two of the HVAC companies I had come over for consultations passed each other in the driveway as I had scheduled them back to back. Their meeting wasn’t intentional, but it ended up being very advantageous. Not only were they hearing from my own mouth that I was getting multiple quotes, but they were also seeing the competition with their own eyes.

The second contractor was much more willing to hand out discounts to gain my business, and there’s no doubt in my mind that the chance meeting helped.

But even without this kind of interaction, don’t hesitate to mention the other people who you’ve talked to. You don’t need to give away names, and in fact, I don’t recommend that, but discuss the other things you’ve been told freely. This will not only help teach you more about the products, but it’s going to make it clearer to the contractor that you have other options.

As soon as they know that you are a smart shopper and are looking around, they will be willing to bend more on the cost to keep you as a customer.

3. Ask Questions

You want to make sure you understand EVERYTHING you are being charged before you sign a contract. Often, there are hidden fees. To avoid being blindsided, ask as many questions as you can.

For example, on one of the many phone calls I had with the window company I decided to go with, It was mentioned off-hand that there would be a fee to take down my blinds prior to installation, and another fee to rehang them following the job. This cost was going to be charged per window and would equate to a few hundred dollars. Maybe this is standard practice for window installation, but I had asked before if the cost we had discussed were the final cost. I had been told it was.

So, I made it clear I was unhappy about being blindsided. I had not yet signed the contract, so I still had leverage.

He offered to include the cost in the price we had already negotiated and assured me there were no other hidden fees he had “forgotten to mention.”

4. Read the Fine Print

When I first got the window contract, what we had negotiated about the blinds was not included. In fact, it said the opposite. I refused to sign until it was changed.

Additionally in this contract, I found that there was no protection for the buyer if the job were canceled partway through by the contractor.

The contract was set up so that I would pay half of the cost at the start of the work (pro tip: never pay in full before the job is done). If the job were canceled after the halfway point, per how the contract was written, I had no protection for securing a refund.

I inquired about changing this wording and was able to get a separate addendum written by the company manager. I was told no one had ever asked about this before.

There is always fine print and the protection is typically for the company doing the work, not for you, the buyer. Check for hidden fees, and lack of protection for your payments.

5. Have Everything in Writing

Part of the deal I negotiated with the HVAC company was the replacement of three of my ducts. Furthermore, any other damaged ductwork that they found during the installation process would be replaced. Any of these additional replacements would be included in the negotiated price, and I would pay nothing out of pocket.

When the contract was sent to me, I didn’t see this stipulation discussed. The three ducts were mentioned, but not the potential for any additional replacements. I immediately sent an email.

If you don’t have your agreement in writing (every aspect of it), you have no collateral to use on the chance that something goes wrong. As they always say: prepare for the worst and hope for the best.

6. Ask About Discounts

This is perhaps my most important tip in terms of actually getting the cost down. There are always extra discounts that can be given to get a customer.

Ask about student discounts, teacher discounts, military discounts, senior discounts, and more. If the price still isn’t looking great, tell them that. The worst thing that they can do is tell you no. But at least five times out of ten, when I’ve asked, there’s been something else they can do. I’ve received an extra 1,000 dollars off just by telling them that’s what I wanted. You’d be surprised what leeway you have as the customer.

Another thing to ask about if you have the means is a discount for paying with cash. It saves the company money so, in theory, they should say yes. If they don’t that’s another thing you can logistically argue. Research how much the company has to pay to secure financing and ask for that amount off.

7. Pick the Middle Ground Option

Typically, you don’t want the cheapest or the most expensive company. You want a company with a good reputation, that is going to do the job right and deliver on their promises. Once you figure out what company this is, spend your energy negotiating directly with them.

No one has a million hours a day to negotiate with a million different people. Narrow in as quickly as you can after your initial consultations, and then use these strategies.

8. Make Sure You Get What You Were Offered

After negotiating in person with the HVAC company I decided to go with, receiving the contract via email with mistakes, and asking for the changes to reflect what we had discussed, I received a phone call during which the gentleman swore he had never promised those things.

I recited practically verbatim the stipulations he had articulated, and finally, he admitted to “remembering” the conversation. Stand up for what you were promised. If you need to go to someone higher up in the company, do so. But if you were told something could be done, the company likely has that power, even if someone is trying to tell you differently now.

To avoid situations like this, I recommend having someone else in the room hearing the negotiations, even if they don’t participate. I had done this, and though I didn’t end up having to call him up as a witness, I had the means to do so.

9. Use Other Companies as Tools

Most companies will match the bid of someone else to keep your business. If you really think one company is going to do a better job but they have a more expensive price, get another cheaper quote from someone else and show it to them.

I really wanted a lower interest rate for my refinance than what the lender was offering. He said it was the absolute lowest he could go. However, I’d been getting notice after notice about much lower rates from other companies.

The lender I’m working with said that if I filled out an application with another company and showed him in writing that they were offering a lower rate, he could make the adjustment. Needless to say, I’m currently in the process of filling out another application.

Many of the contractors I’ve spoken to this month said the same thing — if someone gives you a better offer, we can match it.

Of course, every company wants more money, but they’ll sacrifice that if they need to in order to add another customer.

10. Check the License of the Company

This isn’t a negotiation tip per say but I believe it’s critical. Most states have a registrar of contractors which allows you to check the license of companies you are considering working with. If someone has an inactive license and they are still trying to score your business, steer clear.

Additionally, this resource allows you to see if the company has any open, disciplined, or resolved complaints against them.

It takes minutes to check this information and could save you a major headache in the long run.

The Takeaway

Negotiating is a skill that you will become more comfortable with as you practice. Even after talking to 15 contractors this month, I’m still learning. However, if you recognize the power you have as the customer because you have infinite options, you’ll be able to knock money off of your bill quicker than you might think.