Common seller tricks in HVAC
The usual pattern is to sell the ‘service base’ without showing how many agreements actually renew, and to treat a strong cooling or heating season as the new normal.
- Counting lapsed maintenance agreements as if they were still paying.
- A record install year (a heat wave, a rebate program, a builder relationship) presented as run-rate revenue.
- Owner still on call every night while the write-up says the techs run the company.
- Refrigerant, recovery machines, and truck stock left off the conversation until after you are under contract.
- Warranty labor on old installs that will land on you after the seller is gone.
Which numbers to verify
Split revenue into service, maintenance agreements, and installs. Track agreement count, monthly recurring, and cancellations for at least two years — not just the starting number. Reconcile deposits. Look at technician labor efficiency and callbacks. Recast add-backs, then subtract a wage for a service manager if the owner still runs the board. Install margins can look high until you add warranty labor and unpaid callbacks.
Licensing and key-person risk
EPA Section 608 certification is personal to the technician. State mechanical or HVAC contractor licenses often sit on a qualifying individual, and that person may be the seller. If they leave, you may not be able to pull permits. Confirm who is on the license, whether it can be maintained through a transition, and whether the techs you are inheriting are certified for the work you think you are buying.
Equipment and condition
Service vans, recovery machines, gauges, and brazing setups wear out quietly. Ask for a vehicle list with mileage, lift-gate condition, and whether each van is stocked or just a shell. Check that refrigerant inventory is legal and actually on hand. A ‘fully equipped shop’ that needs two new vans is a different price.
Seasonality and the calendar
Most shops lean on summer cooling, winter heat, or both. Look at monthly revenue, not an annual total. If you close in April with no cash reserve, you may be funding payroll until the first heat wave. Ask how after-hours coverage is staffed in peak months.
Customer concentration
A home builder, a property manager, or a single commercial account can dominate installs. Those relationships are often personal. Service agreements are more transferable than they look only if customers are used to more than one tech and the renewal process is in writing.
Questions to ask before you make an offer
- Please provide a list of maintenance agreements with start dates, rates, and cancellations for the last 24 months.
- What share of revenue is service versus new installs, and how did a weather or rebate year change that mix?
- Who holds the contractor license and EPA 608 cards, and what happens to permitting if the owner leaves?
- May I see callback and warranty-labor hours on installs sold in the last two years?
- What is the age, mileage, and remaining life of each service vehicle and recovery machine?
- How is after-hours work staffed, and how many of those calls does the owner still take?
- What refrigerant is on hand, and how are you handling transition off older gases?
- Which builders or commercial accounts are more than 10% of revenue, and are those relationships contractual?
- Are there unlicensed helpers doing work that requires a certified tech?
- After an LOI, may I speak with your lead tech and your accountant?