Inspection fees - New InterNACHI member

[David Eppley]

New guy here, just getting started in this business. Question. In my area, Southwest Michigan, most of the inspectors have a set price for inspections based on square footage with uniform break points, 1,500, 2500, 3500, 4,500.
Above 4,500 square feet, most ask potential clients to call to get a quote.
Would the additional cost of an inspection for a house above 4,500 square feet still be based on square footage or number of rooms, or number of bathrooms, number of HVAC units, number of service panels and sub panels??
You get my point. Would appreciate the input. Thanks.

[Bob Elliott]

Welcome David
Please enter additional info in your profile.

To answer your question.
Why do you need to have others tell you how to price your services.?
Really.

[Brian E. Kelly]

yes.

[Mark E. Northrup]

David welcome to NACHI
You should do research in you area of top home inspectors and lower end inspectors and see what services they have. Price your inspections where you fit in the mix. Being that you are new it may be wise to do alot of research. If you charge to much and do a low end inspection you won't get a refferal. Find out what kind of reports are generated do they have digital pics. How long before the report is ready. Do there inspections last a hour or more the average of 2-4 hours. How long does it take you to do a inspection? If it takes you 5 hours or longer. Than that can cause problems with the realtors and clients. I have taught a few newbies in my time and first inspections are usually around 5 hrs on a 1200 Sq Ft. home with baseboard heaters and slab foundation. If it has alot of issues than maybe longer. For me bigger houses don't cost more time unless they have multiple baths, furnaces, A/C systems, Kitchens etc. I base it on time on site. time is money in Home Inspection.

Just my two cents

[kpierce]

Originally Posted by mnorthrup

...first inspections are usually around 5 hrs on a 1200 Sq Ft. home with baseboard heaters and slab foundation.

Yikes!

[Richard W. Washington]

Originally Posted by deppley

New guy here, just getting started in this business. Question. In my area, Southwest Michigan, most of the inspectors have a set price for inspections based on square footage with uniform break points, 1,500, 2500, 3500, 4,500.
Above 4,500 square feet, most ask potential clients to call to get a quote.
Would the additional cost of an inspection for a house above 4,500 square feet still be based on square footage or number of rooms, or number of bathrooms, number of HVAC units, number of service panels and sub panels??
You get my point. Would appreciate the input. Thanks.

Don't recommend posting your prices at all. You will miss opportunities to market to those people that will rule you out just based on price. You want them to call you.

[Frank M. Carrio, CMI]

Originally Posted by deppley

New guy here, just getting started in this business. Question. In my area, Southwest Michigan, most of the inspectors have a set price for inspections based on square footage with uniform break points, 1,500, 2500, 3500, 4,500.
Above 4,500 square feet, most ask potential clients to call to get a quote.
Question: How can you quote a price for something that you have not seen? I would invite you to "be cautious" as you could really set a trap or self.
Would the additional cost of an inspection for a house above 4,500 square feet still be based on square footage or number of rooms, or number of bathrooms, number of HVAC units, number of service panels and sub panels??
What is the largest home that you have ever inspected?
You get my point. Would appreciate the input. Thanks.

In all probability you will be inspecting homes between 2,500-3,500 ft.² so I would recommend that you charge somewhere between $125-$150 per hour for the "larger homes" until you can get a "feel for the market".

By the way, after you read the many, many comments on this bulletin board you will see that the "average" Inspector spends 2 1/2 to 3 hours on the "smaller homes". That is to say those homes that range from 1500 2500 ft.².
One thing to remember is that the "larger homes" are in all probability cost well over $1 million so the buyer will not hesitate to pay an inspection fee that ranges somewhere from $1,500-$2,500.00.


Many of us conduct a lot of inspections for the "smaller homes" that start off at a base price of $325.00 for the "basic inspection and after we are through adding on the "ancillary services" such as the radon in air test, the comprehensive water test, the radon in water test, the price usually winds up somewhere in the $650.00 to $850.00 range.
Also, Many inspectors are using "Thermal Imaging" in their basic inspections and are being well paid for their services.
So the bottom line is ...... just because you are "new "...... do not give your services away.


Welcome to NACHI and I wish you all the luck in the world!

[Frank P. Newman]

If you know what others are charging for smaller sq. footages, just figure their cost/sq. ft. and use that for larger homes. Your income per hour will be less when you first start out, but that's just part of the cost of learning process, IMHO. I agree with those who say to stick to your price as long as it is reasonably competitive. Sure, you will lose some business to some 'low-ballers' but you can use that time to take some of the on-line courses offerred and to build relationships with realtors, etc. In the long run you will learn to adjust your pricing to whatever tha market will bear. That's the free enterprise system!

[dbelmont]

Originally Posted by deppley

New guy here, just getting started in this business. Question. In my area, Southwest Michigan, most of the inspectors have a set price for inspections based on square footage with uniform break points, 1,500, 2500, 3500, 4,500.
Above 4,500 square feet, most ask potential clients to call to get a quote.
Would the additional cost of an inspection for a house above 4,500 square feet still be based on square footage or number of rooms, or number of bathrooms, number of HVAC units, number of service panels and sub panels??
You get my point. Would appreciate the input. Thanks.

While competitors is one factor to think on when setting prices the key to understand your costs of doing business including the living you expect from your business.

It's likely that other HI's in your area have not truly calculated what prices are needed to be profitable. hence the high churn in the HI industry.

Account for all your expected costs. Including your living and the profit margin you need to keep your business in the black.

Remember this is a business. If you can't build a business on profitable prices then you won't make it up on valume.

[Frank M. Carrio, CMI]

Originally Posted by dbelmont

While competitors is one factor to think on when setting prices the key to understand your costs of doing business including the living you expect from your business.

It's likely that other HI's in your area have not truly calculated what prices are needed to be profitable. hence the high churn in the HI industry.

Account for all your expected costs. Including your living and the profit margin you need to keep your business in the black.

Remember this is a business. If you can't build a business on profitable prices then you won't make it up on valume.

Good advice Don!
Do you have a "spreadsheet" or other instrument that could help him out?

I am sure that there are many here who would be willing to pay a small fee for this type of help.

[dbelmont]

Originally Posted by fcarrio

Good advice Don!
Do you have a "spreadsheet" or other instrument that could help him out?

I am sure that there are many here who would be willing to pay a small fee for this type of help.

As a matter of fact I just finished the latest version of the Service Business Profit Pricing Modeler. It's so new (just finished testing and last minute tweaks the end of last week) that the sales web site is still a mess.But the software is done and I just finished loading the files to the sales backend.

The SBPPM is designed to do one vital thing for a home inspection business (in fact for any small service business). It helps you develop and maintain a profitable pricing scheme for your services. It's easy to use, fast and accurate. Prices up to 30 different services simultaneously instead of just one generic service. The prices developed are fully based on your financial information and goals for your business so you have complete control. You can lock a price and the SBPPM will still try to maintain your financial goals by spreading any revenue shortfall over other services or showing you how far you are from your targets.

One new thing is I have a version for Open Office as well as Excel. (Anyone who needs an office suite and isn't using Open Office I have just one question. Why? It's full featured, powerful and FREE)

Price is unchanged at 34.99. There is an InterNACHI discount so anyone who is a InterNACHI member send me a Private Message and I'll send you the coupon code. (The PM lets me check you are a member)

Buy the Excel Version

Buy the Open Office Version


If anyone wants to visit the sales site feel free.But be warned it is most definitely a work in progress and likely to change by the minute.

[Robert W. Jude]

being new, you have to be the low baller to get your name out. Why should someone pay top dollar for a guy that has zero experience? you need people to want to give you a chance. Price will do that with some people. dont quit your day job

[Billy Boerner]

Originally Posted by rjude

being new, you have to be the low baller to get your name out. Why should someone pay top dollar for a guy that has zero experience? you need people to want to give you a chance. Price will do that with some people. dont quit your day job

Your way off base Robert. You don't notify people that your the new guy in town. If they ask be honest however most people I run across don't ask. Shoot most book right away without many questions at all. I do think my website has something to do with that. If you start lowballing it's going to be hard to start charging prices comparable to what you need to make your business profitable. Trust me I know I thought lowballing was the right thing to do as well. Now I wouldn't even dream of it I woke up thanks to some friends here and now I make good money and I don't work nearly as hard.

[Robert W. Jude]

ive been asked by nearly all my clients how long i have been in business.... now i could answer with " i have been in construction and home inspecting for the past 22 years,,, but i feel more comfortable with "I just started doing home inspections last march but i have been in construction for over 22 years." If I got this far, I will get the job....

[dbelmont]

Originally Posted by rjude

being new, you have to be the low baller to get your name out. Why should someone pay top dollar for a guy that has zero experience? you need people to want to give you a chance. Price will do that with some people. dont quit your day job

I strongly disagree that being new means you must be a lowballer. If you project that image you'll play heck getting rid of it. And likely end up as another Hi who moveed on to greener pastures when they couldn't make a living.

I do agree that having a planned and targeted marketing program that will likely include a limited time offer intended to encourage people to hire you is what you need to do to get started. (but not the very thing that screams I'm a newbie)

Getting a business off the ground means close attention to your expectations and costs. It's reasonable to try and keep things down so you can charge a competitive price and still make a living. That is different from not charging (or even knowing) what a real breakeven or profitable price for you is. That's one of the first thing you have to find out before you even commit to opening your doors.

You also need a good referral rewards program for your clients that you do get. You will work hard to give them the best inspection experience and then you work them hard to help you build your business. But as you'll discover your good clients will almost certainly enjoy helping you build your business if you ask them to.

And the truth is that most people won't ask about your experience. Yes they should but they just don't. A few will and if you can't project sufficient knowledge for them they may choose a different inspector and that's just life in the inspection business.. But using a de facto lowball price that says to everyone that you are new at this is just plain wrong headed from a business perspective IMO.

Start right building a business based on value to your clients and not on giving away your work. You will be happier in the end.