Question about replacing Water Heater Heating Element?

You were ripped off. A fair price would have been about $240. As for a special tool, if he is referring to an tool to remove the elemnt complete, this tool would cost about $25. To remove the old elements with thermoststats entails, removing the element covers, disconnect the wiring, withdrawing the old elements, connect the wiring, and then the covers. The thermostats ae built into the elements.