I have been recieveing many questions lately on advise on how to get business from banks to do doing draw inspections for them. So what I have decided to do is go through all of past threads and copy and paste them. This will save me on time. I’m sure it will bring up new questions and lead the thread in new directions. One of the most common questions I recieve is what should I charge? This my friends can only decided by your market area rate and competion so I do not know the answer to that question. I am still learning some prices around the country but I do not claim to be an expert on that.
I hope these past threads help and bring on the questions and I will try to help.
I never call. I do all of my business hunting in person. That way I can tell if they are really responsive in using me as a draw inspector. I started by going into the banks and finding out who I needed to talk to (Commercial Lending most of the time). Then I would present myself and what I do. I have a print out with me that details my back ground, experience, and references (a resume more or less). Let them know that you are also a home inspector that should help. Where I live in Chattanooga TN a lot of draw inspectors are appraisers that the banks use to appraise the lots and house plans for the bank before construction begins. In my opinion Appraisers should not be doing draw inspections. Their experise is value of homes not construction. I come from a construction back ground so I know what goes into building a house, small commercial, and residential developements. I also think Home Inspectors have a big advantage over Appraisers b/c you guys know all about houses too. I tell the banks “Look, I know how to build a house. I know all the steps that go into building a house. The appraiser you use does not.”
Another point I use is that there are a lot of builders out there that have burned banks. By that I mean they get half way complete with a house and they are at the point of filing bankruptcy. I can tell b/c the builder will start cutting corners. They will put carpet in before it should be or they will put vinyl flooring in house that should have tile, or as i have seen they will make the finished staircase handrail out or sanded spruce lumber. Now the builders do this so they can get funded for work completed and then file the bankruptcy. I have helped numerous banks by telling them when something out line is going on. I am the banks eyes and if you can show them that you will look out for their best interest you will get their business.
The banks that I don’t get a good response when I go see them I will return in one year and hit them again to advertise myself. If I get a good response I will visit them every 3-6 months. In the banking business I have learned that there is a lot of movement of personel. For instance I might go into one bank do my thing come back 6 months later and that person I spoke to last time is at another banking company.
My biggest finding on getting business has been local home shows. At home shows all bank lenders have their own booth. I go talk to them, do some small talk and then do my advertising. I know most of these people by name and they do me as well. Just be persistant. That is what has helped me.
When go out to get business keep your focus on banks that are in the area you want to work in. Put high emphisis on banks that are local, semi regional or regional. The big banks like Suntrust already use companies like DDN. Your chances of getting them are not as good but by all mean try. You might get lucky.
How much to charge? Thats a question that is determined by the market you live in. I don’t want you guys to think that you can get $100+ dollars per draw inspection. If you know of a place that pays that much for a residential draw inspection please let me know b/c I’ll move there!! Price should not be your biggest concern, VOLUME should be. On of my ways of getting more business when pitching myself to the feet of lenders is I give a price break on Volume. For instance, I tell the bank, “If you give me more than one draw inspection in a subdivision at one time. I will give you $5 off each inspection in that sudivision.”
Lets say I charge $45 an inspection. I get a request to do five in one subdivion for that day. I drop my price to $40 on all inspections there for that day.
If I get one inspection the next week in that sudivision my price stays at $45.
In Nashville there was ,and I imagine still is, a flooding of residential growth and draw inspectors. From what I heard from a friend of mine that works for residential lending that they were paying as low as $20 an inspection. Yeah that sounds bad, but let me shine some light on that. In Nashville and other large markets there are subdivions that could have a 1000 lots in it when complete. These banks would have 20 draw inspections a day from just one sudivision. So if you were one of those draw inspectors you would make $400 a day. Multiply that by four times a week and get $1600 a week. Plus it only takes about 4 hours a day to do the work. Not a bad living in my mind for 16 hrs worth of work. Again VOLUME is most important.
Small Commercial and residential developments are where the money is at. Big banks use Engineers to do these draw inspections. The smaller banks will use their usual draw inspector. I charge a minimum of $100 to do one of these. It all depends on the size of the project and how much detail the bank is wanting me to give them. These have a lot different format than residential
When going to banks to get business ask for the person that gives loans to builders for building houses. Thats the simplest way of putting it that will get you started in the direction you need to go.
I am getting questions on what they should charge for doing draw inspections. First, I feel that the market you live in can only determine that and the demand for draw inspectors. The same as all of your prices for Home Inspections. The more the inspection companies in a certain area the lower the cost for a home inspection will be b/c of competition.
Second, from what I have gathered from you guys doing draw inspections for companies like DDN and etc. almost all of the postings in here have been about having to drive really far for a small fee for that distance. Take me for instance, I very rarely go over 20 miles away from home to do my inspections. On some days I have over 20 to do. Ask your self this, Would I do 20 draw inspections for $45 if I did not have to go no more than 20 miles from home and it only take 4-5 hrs? And make $900 in that time? I sure as hell would. Would I do 10 draw inspections and go no more than 20 miles from home at $45 an inspection and only take 3hrs? And make $450? Hell yes!!
Third, I do not know how much DDN is being payed on draw inspections. I wish I knew!! But for where I live I can gaurantee all of you that it is not over $80. If it was I could get my foot into the door with the banks that use DDN I would undercut them by $20 easily and get their business. I also believe that these banks pay DDN extra for rural areas. What that would be I have no idea.
Focus locally and undercut the competition because draw inspections are SO EASY!!! If you do them through a smaller bank you do not have to jump through as many hoops as you do for DDN and others. Most small banks only require one picture, you fill out a simple draw sheet, and then fax or email it to the banks. So much easier and a lot faster than DDN.
If you guys like this draw sheet you can create your own sheet based off this. Just copy things to Excel and you can also do auto sum on the columns to add everthing up for you. Also you can leave out some fields or add more just make sure the percentages make 100% total. I do not advise printing the one from the link and taking it to other banks b/c it is Suntrust creation. The ones that I use from other banks and ones I have created are similar.
The bank has split up each phase of construction into a small percentage of the total 100% completion.
In other words, when the rough wiring is complete the builder is funded 3% of the value of the loan. Same goes with the other phases of construction.
With most banks you can give partials. So if the rough wiring is only 50% complete you just mark 1.5% for rough wiring.
This is different than how DDN and Trinity do theirs which is a 0-100% for each completion phase.