Thread: Mileage charge

To those of you (us) who do other types of inspections (I'm specifically thinking about FHA).....

How much do you charge for mileage on a long distance inspection?

If you don't charge, don't bother posting

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I don't.

$1.00 per mile round trip.

Originally Posted by JB Thompson

To those of you (us) who do other types of inspections (I'm specifically thinking about FHA).....

How much do you charge for mileage on a long distance inspection?

If you don't charge, don't bother posting

I guess I can post because I simply build any mileage fee into my quote. I have learned over the years that folks have an adverse feeling towards extra fees; like mileage and anything else that has to do with the operational cost of my business.

Originally Posted by Scott Patterson

I guess I can post because I simply build any mileage fee into my quote. I have learned over the years that folks have an adverse feeling towards extra fees; like mileage and anything else that has to do with the operational cost of my business.

I agree with Scott for individual clients, however, for inspections for other businesses, they usually offer a mileage allowance, and then it is a matter of negotiation from what they are offering to what I want ... if it is not worth it, it is simply not worth it - don't do the inspection.

Would you do a $75 inspection which takes 3 hours and $75 worth of gas? If so, why? You could sit in your office and make the same net return ... $-0- ... and use that 3 hours for something productive.

HUD/FHA allows 30 miles round trip from your place of business, anything over that you can charge the going IRS rate on mileage. The last time I checked it was .55 cents a mile.
Personally, I'll give 60 mile round trip with no charge and probably would go a 100. Much over that, I think you have to evaluate your overall time involved vs. the return. For $75 per visit, the return becomes pretty marginal.

I spoke with another 203k consultant last week, he was telling me he had a project that was about 200 miles from his place of business, He was charging an additonal $200 for each draw inspection. But those fees are built into the cost of doing the loan, so the funds are not directly out of pocket for the borrower.

If you are doing a typical home inspection, I think Scott is right about putting addtional fees in the total cost of the inspection. On HUD/FHA I would disclose additional fees upfront.

However, In speaking with other people, HUD/FHA is really watching some of the activity with the government loans. About a month ago I had to rescue a 203k that had initialy been done by a FHA inspector not a 203k consultant. I wasn't positive if the lender caught it or HUD did.

Duane - interesting. I've been charging .50/mile both ways, but it doesn't seem to be an appropriate amount for the time/drive/wear and tear. Did you decide on $1.00/round trip or do some calculations?

Scott - I should've explained more clearly. I, too, build the price of travel into my regular inspections for the same reasons. If I were hiring someone, I wouldn't want to know or pay for mileage. As Jerry said, I'm talking about business to business, such as draw and FHA inspections (though the consumer does ultimately pay the entire cost).

I'm not sure where the $75 amount came from or if it was merely an example, but for FHA compliance inspections, I charge substantially more than that and I charge mileage if not relatively close to my office. Of course, I'm dealing with mortgage companies for this and they never balk at my fee or the mileage.

I agree with Jerry about sitting at my desk versus getting out of the office to work for peanuts. It's not worth it.

Trinity inspections have thrown numerous "drive by" inspections at me. They only pay $15. I never take them at that price; however, if they call and I'm traveling AND it's on my way AND not an inconvenience, I will request they pay more (about $80 in most cases); most times they capitulate. I've told them on several occasions to pass the word to their superiors that they are insulting people by offering such a paltry sum; that no one can run a business like that. I even shared that when I do these "drive-by, FEMA inspections" directly for the lenders how much I am paid (which is at a minimum $150 for those within 10 miles when I leave from my office). They express disbelief. Apparently, the workers do not know how much Trinity bills for these, but I'm sure it's similar to my charge.

Anyway, apparently someone is doing them b/c I turn them down quite frequently.

I drifted there for a bit.....

regarding the actual thread....I would like to hear what people charge for mileage when it comes to b2b inspections.

Even when I do commercial or residential draws (they make up about 30%+ of my business) I build the mileage into my fee. A good example would some tire stores that I do all of the draw work on in 3 states. If they are local and only an hour or two away I charge $300 to $350. If they are 2-4 hours away I charge $400-$450 and I top out around $600. I know I will have about 4 draws per building so I'm looking at the total fee for each project.

For residential draws I charge $75 to $100 for local jobs that take an hour or less travel time. I'm very selective with any residential draw that is over 2 hours away. I have one right now that is about 75 miles away that I charge $175 for. It is for a very good client of a large bank that gives me many jobs a year. I also do several draws per month for National Draw, they are all in the $50 to $80 range but are all local and I use them for fill work in between jobs.

With FHA I follow their guidelines for mileage charge distance; I do not do all that many of them in a year. Maybe 6-8 a year and I try to keep them local

What is a b2b inspection?

b2b = business to business. Not an exact application here b/c as I said, ultimately there is a consumer paying for the service. But I receive the order from a lender and not the purchaser.

FHA doesn't have any fee guidelines. Unless something has changed that I'm unaware of.

HUD FHA HOC Reference Guide Chapter 1 Appraisal and Inspections

Charge the IRS allowable. They usually specify for January of each year. Last year they also adjusted in July.

IRS Announces 2012 Standard Mileage Rates, Most Rates Are the Same as in July

This is for a Federal source and the only Federal rate I know of is above. $ 0.55 / mile currently. It would be difficult for HUD to ignore their own rate/s.

I do a good amount of work for several banks. I charge $1.00 per mile or $75 per hour of drive time. In the long run it works out to just about the same. I do not worry about what HUD or anyone else says I can charge or not charge. If they want me to go they pay the fee, if not I will book the time for another paying client.

JB - I'm a simple guy and $1.00 makes the math easy.