Being cheaper than other home inspectors as a marketing strategy. Does it work?

[Jbrow327]

Starting out or during tough economic times, is it better to lower your prices 15 to 40 percent lower than your competitors? 

If someone charging 400 or 500 dollars only gets 4 or 5 inspections per week, that's decent.

If someone charging 250 per inspection gets 10 or more, that's good.

What do you guys think?

[Tom Raymond]

Don't do it.

It's the hardest lesson to learn in business, but you have to charge a price that's fair to you, not your customers. If you don't, you won't be in business very long.

 

 

[Jim Katen]

Sure, its fine to lose money on every inspection as long as you make up for it with volume. 

 

[Denray]

I know, where the hell have I been? Hiking, biking, kayaking, skiing, breaking a bone here and there, and just finished up some Covid. Speaking of which, if you realize early that you have it then take the paxlovid. 
In regards to what to charge. When I started in 2006 I came in with the I'm going to point out all the problems to my clients. I live in a community that is around 135k population for the county, and 140 miles from the closest large city. What I found this to mean is that the Realtors own it. General population didn't know the difference between a HI and an appraiser. There were two local inspectors that got into the biz during the housing booms of the 90's. I joined CREIA, who always emphasized list all the problems and keep your rates high.  The two (CREIA) inspectors had low rates. They spent anywhere from 1 to 1.5 hrs inspecting a house. I'd go to our once a month meeting and they would be hi fiving themselves about having 3 or more inspections a day. The Realtors wanted to only hear about the problems they might get sued for. These guys were there to help them sell the house. The Realtors don't want to sit around more than an hour or so while they text their friends waiting for you to get done. I was always like a 3hr and up guy, stupid me.
I was previously downsized out of a claims adjusting job and now had a $750 retirement at 53yrs old. Everything was paid off, lucky me. I didn't clear more than $3300 per year for 6 years. Took that long to get enough clients to produce enough referrals. 
If you want to not sell your house just get me to look at it. After dealing with 20+ Realtors I'm sure I was blacklisted.
My last two years, out of the 10, I was regarded as the best HI in out county per the local main newspaper that asked for the community vote. I finally made it to where I wanted to back down to, income/work hrs, when I was going to retire from HI, ha, so I did. And that was clearing a little over $30k per year. We/I had a lot of 401k and a few other deals, so it all came together just before I turned 65. 
So, if your all about making big bucks in a Realtor owned area, start sucking up. As the Realtor is explaining the sells contract and they come to the portion regarding do you want a HI, clients will say "what's that" followed by who do you recommend.
Other than income, HI was the best job I ever had. At the site the Realtors that hated me would be so nice, "Hi Denny, how's it going". The owner would offer cookies and coffee and be very nice, usually, ha. My client was very happy with me the whole way thru. Client's Realtor was nice. And I got paid right when I was done looking at the house. Report always showed up by the next day.

[Marc]

A metric on inspector performance could eliminate realtor influence on our relations with buyers. We'd be free of them. Such a metric can be found in reports that inspectors write. HI reports speak just as loudly about the inspector's performance as it does about the house.

[Les]

Marc I disagree.  I now believe that nearly 99.9% of reports are nothing more than touchscreen novels.   You can tell nothing from them relating to the inspector that touched the screen.  Your first sentence is correct.  watching social media postings, answering new inspector questions, reading reports from new and old inspectors leaves me discouraged.

The "leaders" of this profession are destroying it very quickly.  Foolish, self-aggrandizing posts and comments.  Testosterone overload!

 

[Marc]

On 1/11/2023 at 7:58 AM, Les said:

Marc I disagree.  I now believe that nearly 99.9% of reports are nothing more than touchscreen novels.   You can tell nothing from them relating to the inspector that touched the screen.  Your first sentence is correct.  watching social media postings, answering new inspector questions, reading reports from new and old inspectors leaves me discouraged.

The "leaders" of this profession are destroying it very quickly.  Foolish, self-aggrandizing posts and comments.  Testosterone overload!

 

Whether it's a novel touchscreen production or a report written in complete, grammatically correct sentences w/o check boxes and color/alphanumeric codes is all besides the point.

The point is to measure how well the report serves the client. How well it communicates. That measurement is telling on the inspector who wrote the report.

Such a measurement can be taken by weighing the features of the report against a writing standard made for home inspectors.

I've seen reports done by O'Handley, Katen and Cramer. Those are the three best written reports I've ever seen. As Reviewer for Louisiana's State Board of Home Inspectors, I've scrutinized over a hundred Louisiana reports, and skimmed at least a hundred more from throughout the US.

Improving the profession begins in legislatures, instigated by informed, skilled and free-thinking home inspectors gifted with powers of persuasion and with a robust following of other inspectors and members of the public. The associations and remainder of the profession's practitioners will follow. The goal would be to elevate the profession with writing and educational standards as well as prohibitions against agents interfering, in any way, with the client's choice of inspector.

No state has either of these standards and only unenforceable versions of the prohibition, thus it shouldn't come as any surprise what a stinky pile (to borrow Kurt's words) we find our profession buried under.

But I respect your opinion, of course, as well as anyone.

Edited January 12, 2023 by Marc

[John Kogel]

Hey Denny, I am also happy in retirement, had to lower the stress level and retiring does that real well. The stress was people related and driving from A to B, racing the clock. Inspecting a house is the easy part.

My reports had generic comments written by me, describing the good and acceptable features of the house, all illustrated with lush pictures, what a beauty! Who cares, what problems did you find?

The deficiencies received comments written on the fly and summarized again on the last page, the best page of the report. I would send that page to the realtor if they asked for it. I was not their adversary, and I saved them their careers a few times. I recall the slogan "black-balled is my badge of honor". but that only feels good if you are working steady. It's a tight-rope act and sometimes feathers get ruffled. You find the realtors that will bounce back from a collapsed deal, and get referrals from them, lots of them, because those are productive agents with a steady stream of clients.

Pricing never too low or too high, stay in the upper end of the middle with the veterans.

Tell it like it is without melodrama, offer solutions, such as "mud-jack the walls and pour a concrete slab thru the window", stuff like that. 

[hausdok]

The Washington State rules for home inspectors require completion of an approved course, passage of the NHIE, before a license can be issued. The code of ethics written into the SOP has lots of rules against collusion between inspectors and realtors or sellers. Every inspector must complete a required number of continuing education hours of courses approved by the board every year. Reports must meet certain minimum standards or an inspector can be disciplined.

When the rules were created and announced in 2008 about twenty-five long established inspectors left the profession despite the fact that they, being experienced inspectors, weren't required to take a course - only pass the NHIE to continue inspecting. 

Reports are different from Inspector to inspector, but if they meet the minimum requirements they aren't faulted.

 

 

 

 

 

 

 

 

 

 

 

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[John Ghent]

NO!

[hausdok]

About the original question. No. Work smarter, not harder. If you do a careful, unhurried inspection and treat the clients like your own family, they will tell others about you and the work will come. I once raised my price a $100 over what the franchise I used to be with charged. I got rid of the lookie-loos shopping for a cheap inspector and also the realtors that were always trying to get me to listen to the "code" they were sending with their voice and body language. It was slow but it picked up until, during the recession, I was fielding work to other inspectors that I didn't have time for. Retired more than three years ago but I still get calls from old clients - some after more than a decade - and people they have referred to me. The cheapest guy around usually goes out of business within a couple of years because he/she doesn't know how to pay himself a living wage.

ONE TEAM - ONE FIGHT!!!

Mike

[Les]

On 6/11/2023 at 4:26 PM, John Ghent said:

NO!

 

1 hour ago, hausdok said:

About the original question. No. Work smarter, not harder. If you do a careful, unhurried inspection and treat the clients like your own family, they will tell others about you and the work will come. I once raised my price a $100 over what the franchise I used to be with charged. I got rid of the lookie-loos shopping for a cheap inspector and also the realtors that were always trying to get me to listen to the "code" they were sending with their voice and body language. It was slow but it picked up until, during the recession, I was fielding work to other inspectors that I didn't have time for. Retired more than three years ago but I still get calls from old clients - some after more than a decade - and people they have referred to me. The cheapest guy around usually goes out of business within a couple of years because he/she doesn't know how to pay himself a living wage.

ONE TEAM - ONE FIGHT!!!

Mike

John is right.  Mike is right. I am right.  No, No and No. 

I will admit that it is difficult to stand by pricing decisions once made. 

 

PS:  between the three of us there is more than a century of experience in this profession.   Mike 38yrs, John 60yrs and me 2yrs.

[Tom Raymond]

You can buy tee shirts anywhere. Walmart sells them for about $6. Target $12. Nordstrom $100. Who would you rather sell to?

I'm on the border with two of the poorest counties in my state and I charge more for radon testing than most charge for an inspection.

Sell your value, not your price. 

[John Dirks Jr]

10 inspections per week?   Some may laugh when I say this but that would probably kill me.  
 

5 thorough inspections doing everything required and also going beyond the standards as any inspector usually does is enough. A really good job on an average size house is a days work when you include preparing, inspecting, talking to the clients about what you’ve found at the inspection and following all that up with a well written report that describes what you actually did and saw there.  Do forget the proper recommendations to resolve the problems.  
 

if you charge $250 and go for quantity you will almost surely turn out crap work.  

[Chad Fabry]

On 8/5/2022 at 5:34 PM, Jbrow327 said:

Starting out or during tough economic times, is it better to lower your prices 15 to 40 percent lower than your competitors? 

If someone charging 400 or 500 dollars only gets 4 or 5 inspections per week, that's decent.

If someone charging 250 per inspection gets 10 or more, that's good.

What do you guys think?

Did you even look at your math? 5x500=2,500. 10x250= 2,500. 

I'm curious why you'd want twice the liability and twice the work for the same money?