Credit: Barry Blitt

A homeowner has the legal right to cancel a contract within three business days — it's an inevitable but manageable part of business if you're selling in the home. The rule-of-thumb for rescission is: If the size of the contract is $4,000 to $5,000 (or less), rescinded contracts should not exceed 5% of total. If the average contract is $8,000 to $12,000, rescission should not exceed 10%. If the contract exceeds $25,000 to $30,000, rescission might be 25% to 30%. If you have little or no rescission, it might be because you're doing second and third calls. If your rates are above the averages cited, be concerned.

AN EASY OUT Rescission exists to protect homeowners from unscrupulous sellers employing deceptive tactics. It's not an invitation for them to change their minds about signing the contract.

The sales rep who misstates the three-day right to rescind and its purpose as a close or credibility statement does himself and his company a disservice.

In fact, rescission is often a malfunction of the sales process. When customers who rescind are asked why they're canceling, the most stated reason deals with price. In actuality, the salesperson failed to establish that the value of the product was equal to or exceeded the price agreed to.

TRACK IT BACK Well-run companies track a minimum of five sales metrics weekly: leads issued, presentations, sales, “credit sales” pending, and rescissions.

The most efficient way to track rescission is to break it down per salesperson. Identify those whose rescission rates are unacceptable, then supply them with proper language. Well-run companies even tell salespeople to say before they leave with a contract: “If you feel a reason to change your mind, let's discuss it now.” After all, if there is doubt, this is the best time to resell your price. —Dave Yoho is president of the oldest, largest consulting group serving the home improvement industry.; 703.591.2490.