"We don't
have to go by square footage but we feel (and I would think most other home inspectors in this area feel the same since they go by square footage) that it makes it easier to determine what the price we charge."
The *easiest way* is to price based on sales price.
"If we charge a percentage of the sale of the house, then we would be making the minimal amount of money for a larger than normal house ... "
No, you price based on sales price should reflect what your true costs are, you need to cover those costs and make a profit.
And, when doing a house in an area where the prices are higher, your liability is higher (think about it), so your higher fee for the same price house is justified.
I started out basing my
inspection fees on price, switched to square foot, then switched to hourly.
In the long run, I decided it would have been better to have stayed with 'based on sales price', however, I was entrenched in my hourly rated, and already being well paid, that I never made the switch back. I would, however, go with inspection cost based on price if I had gotten back into the business.
With inspection cost based on sales price, with the exception of a few areas and down market times when price drop, you have built-in raises. Those built-in raises over the years more than make up for a year or so of down market.
If you price based on square foot or hourly, any raise much actually be a raise in your prices.
I.e., I went from $0.10 per square foot to $0.15 per square foot, and my business dropped. If I had been using $100 per $100k, I would not have had to raise my prices at all, and my inspection cost would have quadrupled, because the housed I did went from $150k average to $750k at that time. Later, my average house went to well over $1.5 mil.
When starting out, one must judge their structure by the market, but not get so entrenched that, once established, they cannot change to a sales price based fee. Ultimately, that is the best way.