Rate schedule

[frosty23]

When I was in school my instructor kept repeating "don't be the K-Mart of home inspectors". Figure how much you need to charge base on what your projected expenses will be and what you want to make for an income.Set your prices to what you need and command that price. He also said that "you will not be competing with the other inspectors in your area, you will be competing with yourself". Needless to say, I came away pumped and excited as to how much that I could make. Then I got to the real world. My sister and her partner are realtors and they told me that if I didn't set my rates close or equal to my "competitors" that nobody would hire me because most people look at the cost first,not knowing what level of service that I will provide before they experience my inspection and report. I now feel that in order to get my foot in the door and get people to know me and my work that I had to lower my expectations and prices considerably in order to get started. Feedback please![:-banghea[:-banghea

[Scottpat]

First you need to forget what the schools tell in regards as for how much money you will make!

When you start, you have to work hard for every dollar. You have to price yourself with the pack. But as your name becomes known and the quality of your inspections is known as a good value, you can breakaway from the pack and slowly raise your rates.

[hausdok]

Hi,

Just one more example of folks listening to real estate folks tell them how to conduct their home inspection businesses.

A lot of the folks you'll be competing with will not be established inspectors - they will be other new folks who will have bought into that line and their prices will be where the realtors told them they should be - which is probably somewhere around $300 for an inspection, because that has been what realtors have been telling folks for the past decade.

In order to try and get their foot in the door, new inspectors will charge less, thinking that to be a good business decision. Next thing you know, when your business begins to take off and you discover that what you're charging isn't paying the bills, and try to raise your prices, you'll catch a whole lot of grief from agents bellyaching about how 'high' you are compared to 'everyone' else. Everyone else being all of the other schmucks who swallowed that line and have also painted themselves into a corner.

When the price of a house goes up 15% this year, your sister and her partner will make literally thousands more than they would have made for the same transaction only months before. This year, they probably split $10,000 to $12,000 more, after the broker's cut and advertising costs, etc., than they would have on the same house ten years ago. Yet, their comrades are still quoting the same inspection fees to their clients as 10 years ago, and then telling local inspectors what their clients are willing to pay. See anything wrong with that?

I kind of study the yellow page ads as a hobby, just to see how many new inspection companies come and go every year. Want to know something? The guys who charge those bottom dollar fees don't last. Do realtors care? Hell no! When the poor schmuck prices himself out of business they just move onto the next guy who walks into their open house telling them he's new to the business and feed him the same time-honored line - "Charge more than your competitors (other new guys) and you won't get any business."

It's how the real estate folks manage to manipulate most of those in this profession and it's a shame that more inspectors don't realize it. Can you imagine the row if we went around telling folks who call us for an inspection that a 6% real estate commission is exorbitant and they should go with another agent?

If we worked harder at educating the public that they don't have to listen to real estate agents when it comes to even a smidgen of advice about home inspectors, we might one-day finally be able to free this profession from this cycle of B.S.

Figure out what you've got to make, charge that, do a competent inspection and write a damned good report. That's what the profession needs.

To hell with what real estate agents say, 'cuz they aren't going to have to pay your bills.

ONE TEAM - ONE FIGHT!!!

Mike

[kurt]

Forget what they told you in school, & forget what your sister & her partner said. The former may have insight, or not, & the latter sound like our worst enemies. If I say anything more, I'll probably regret it.

Re-read Mike's post, commit it to memory.

[monte]

Again Re-read Mike's post, commit it to memory.

Kurt in Chicago

Workin' the Inner City

[Jim Katen]

Originally posted by frosty23

When I was in school my instructor kept repeating "don't be the K-Mart of home inspectors". Figure how much you need to charge base on what your projected expenses will be and what you want to make for an income.Set your prices to what you need and command that price.

That's damn good advice no matter where it came from.

He also said that "you will not be competing with the other inspectors in your area, you will be competing with yourself".

What a load of touchy-feely, new age bull poop. It sounds like whoever said that watched a few too many episodes of Kung Fu. I'm amazed that the same person gave you those two particular pieces of advice. I don't suppose his initials are AWB?

Needless to say, I came away pumped and excited as to how much that I could make. Then I got to the real world. My sister and her partner are realtors and they told me that if I didn't set my rates close or equal to my "competitors" that nobody would hire me

I'm sure your sister's a great gal, but seeing as she's currently working for the dark side, I wouldn't put too much stock in her advice.

because most people look at the cost first,not knowing what level of service that I will provide before they experience my inspection and report.

On the other hand, people sometimes prejudge you based entirely on your cost. They figure that, if you're more expensive than everyone else, you must be better.

Hey Sis, you ever think of that? Huh? Huh? HUH?

I now feel that in order to get my foot in the door and get people to know me and my work that I had to lower my expectations and prices considerably in order to get started.

You might have to do that, but first I propose you try an experiment. Calculate how much you need to charge based on your instructor's first piece of advice. Then add $100 to it. See how it goes. If it doesn't go well, and you feel that you're losing too much business because of your fee, then start handing out $50 discounts to past & present military personel, members of AARP, employees of your area's largest employer, people with brown eyes, etc. If that still does't work out, you can always fall back on the weasel fees that Sis advocates.

The worst thing that can happen is that you'll develop a reputation for being too expensive. Later, if you lower your prices, people will think they're getting an expensive inspector for a low price.

- Jim K

[chrisprickett]

On a 2500 sq ft home, I'm $75 higher than the closest "other" guy in my market.

I'm turning business away. He's hustling his butt off to make ends meet.

I do very little agent networking. He's always buying agents dinner, sending broadcast (spam) email, and generally sucking up.

I work with the most honest, ethical agents in town. He's on the "inspector of the week" merry-go-round with several other low-ballers in my market.

I ride my HD (Harley Davidson), paid cash, on weekends. He gets hours at the local HD (Home Depot) on weekends.

Any questions?

[Chad Fabry]

This weekend I am inspecting a 3000 square-foot home over three hours away. When my client signed the contract, he said that he could have had it done by a local inspector for $200. My minimum fee is $350, and I quoted $850 for this particular home which is a 150 years old. Reading this thread, it occurred to me that the local inspector would have to do over four inspections to generate the same revenue.

Some people recognize the difference between value and price and those people are the ones I would like for clients. You won't find these clients by being the cheapest in town.

It's much more satisfying to be paid to do an excellent job than it is to constantly struggle for the volume necessary that lower prices demand.

[hausdok]

Oy!

Three hours away Chad. Are home inspectors that scarce up in them thar hills or are you just so danged good that your already famous across the state? [:-bigeyes

ONE TEAM - ONE FIGHT!!!

Mike

[Chad Fabry]

Former client referral who used the report to negotiate 66,000 dollars off their purchase price. They didn't split the savings with me, even though the topic was briefly discussed. They thought I was kidding.

[homnspector]

That actually sounds like a good way to price inspections. Hmmm.

[kurt]

I'm always up for the long drive if the fee is there & the work is interesting. Historic work (old joints) takes you places outside the 'hood, but for folks that know, they're usually willing to pay. At least, that's been my experience.

[DonTx]

Hi Paul,

If you strive to be the most thorough inspector around and write better reports than 99% of the other inspectors in your area, you'll be able to command your own price.

Don't get bummed when people hang up and go shopping. It's a numbers game. You're going to have people who only want a cheap inspection no matter what. Then you'll have people who want the best inspection they can get. Those are the ones you want but your work will have to exceed their expectations.

It use to burn me up when I'd spend time on the phone with a prospective client only to have them use a cheaper inspector. Now, I could care less. When the hang up and go shopping, there'll be someone else call shortly who is willing to meet my price. In time, this will happen to you.

If you're truly offering quality inspections and reports, then start out a little higher than your competition and explain it to your prospective clients why you're more expensive.

Another thing, when you charge more, you'll have to do less inspections to make ends meet. Even if you're the cheapest inspector, you're not going to book every inspection. Don't fight it, just charge what you need to and let the crumbs fall where they may. The longer I'm in this game, the more I find myself picking the low hanging fruit.

I was recently turned on to eLance for some outsourcing. eLance is where you post a work project and freelancers bid on the project based on your job description. On many projects you can see what other Freelancers are bidding on the same project and on accepted projects you can see the winning bidder.

Rarely does the lowest bidder win these projects. From browsing through the projects, I'd say that the majority of the projects are awarded to the upper end bidders.

People will pay for quality service. Stick to your guns.

[kurt]

Originally posted by Donald Lawson

Hi Paul,

People will pay for quality service. Stick to your guns.

I "lost" 3 jobs today because I was higher than everyone else. After being mildly bummed out for a couple hours, the phone rang twice & I booked two good jobs @ my fee, not theirs. Then, I got an email confirming that I got a large condo consulting gig for about a weeks worth of fees; I thought I'd lost out 'cause I hadn't heard from them in 3 weeks.

Sticking to one's "guns" isn't easy, but today it worked out. I expect it will tomorrow also.