Thread: Basis for Establishing Inspection Fees

Just a poll
As a home inspector, what basis do you use to establish inspection fees? Note I asked for the basis of establishing not the fee itself. However, I think that would be an interesting topic just to compare across the U.S.

Square Feet: What do you include to establish SF?
Selling Price: Listed, final?
Time: cost plus?

What other factors influence the process?
Age Differentials?
Historical Value?
Crawlspace?

Me? I use SF and add $25 per 25 yrs age. If I run into a really large deck, add for that.

About fees: If I asked for that information, not to be posted publicly, but emailed, and I compiled the results by state or perhaps metropolitan area, would anyone participate or even be interested in the results?

I saw somewhere and earlier about Radon test fees in CA. Boy, I sure would like to be able to charge $500-$600. (I'm NEHA-NRPP certified too).

Stu

Similar Threads:

• HUD Inspection Fees
• Greetings from California land of taxes, fees, and service charges
• Holmen to inspect inspection fees - Onalaska Life
• Fees

We base ours on :

1. Age of Home
2. Square footage
3. Location (drive time)
4. Gas or Electric or both
5. Extras: Pools, spas, sprinklers, additional mechanical
equipment.
5. Slab / or Pier and Beam
6. Vacant or Occupied
7. Is it a Foreclosure
8. WDI REPORT
9. Is the father of the buyer coming out?
And #10. Kind of car their agent the client drives

rick

Originally Posted by Rick Hurst

We base ours on :

1. Age of Home
2. Square footage
3. Location (drive time)
4. Gas or Electric or both
5. Extras: Pools, spas, sprinklers, additional mechanical
equipment.
5. Slab / or Pier and Beam
6. Vacant or Occupied
7. Is it a Foreclosure
8. WDI REPORT
9. Is the father of the buyer coming out?
And #10. Kind of car their agent the client drives

rick

Thanks Rick -
And under #9 add "or friend/other relative who is a (pick one) builder, electrician, plumber, handy-man, HVAC guy, ..." and possibly "A bored retired military officer"

That's double? Right?

Mine is ditto Rick's reply... we ask and need the exact same information he requires.

• I'm now at .13-.14/sq ft. livable space (rounded up to nearest $5)
• add $2.00/ a year for every year the home is over 25 years old (example: add $70.00 for a home that is 60 years old)
• add $35.00 crawlspace
• add $40.00 pool
• add $20.00 spa
• Foreclosures and repo's-- I charge .17/ sq ft.

After calculating all of the above, I now add $30.00 per inspection. The $30/per is now a gas/insurance surcharge.


rr

Stuart,

In addition to what was said above, if you haven't done so, you might want to go through Brian's Cost of Doing Business. That should be an indication of what you should be charging.

Also, call your competition and pretend to be a buyer. Find out what they charge and you'll get a general feel for your market.

Here is what we base our price on:
1. Age of Home
2. Square footage
3. Location (drive time)
4. On big houses I ask how many baths, kitchens, laundry rooms and HVAC units.


Since we have a mix of slab/crawl/basments, I don't charge more for crawls, I just figure I make out better on the others.

If the house is over 60 years old, I charge more, if it's over 100, I charge a LOT more - sometimes as much as double the fee.

While I ask if the house is vacant or occupied, it has no bearing on my price. I have found that when someone tells me it's vacant, that might mean the people have just moved out, but left all of their furniture and belongings.

I don't inspect pools or spas, so it has no bearing on my fee.

As far as square footage goes, I ask my client or the person booking the inspection. Most of the time they are pretty accurate. If I come out and find they have mis-quoted the footage by a bunch, I bring it up right away. But there again, I have over priced many homes because they mis-quopted the footage the other way, so I don't get too excited if I'm not there much longer than I expected.

ABOUT CHECKING OUT YOUR COMPETITION
1. Be aware that most of us have caller ID.
2. Most comsumers do not ask questions like a home inspector does. We can usually spot you a mile away.
3. You are wasting our time, and tying up our phones.
4. If we spot you early on - you may not get accurate numbers. Example, "Uh, how much do you charge for a 2000SF house, on a crawl with 2 HVAC units?. "$1200" or if we feel like it, the answer may also be, "This weeks special is $149".

While knowing what the others in your area are charging may be good information, one really has to set their fees to 1. make a living and 2. make a profit.

Everyone in this field needs to know their own cost of doing business. I had a conversation the other day with an investor about the $175 guy in my area. He probably has no idea of his true cost of doing business, and is going broke with every job - he just doesn't know it yet.

His cost for each inspection he does is likely way higher than mine, yet I'm charging twice what he does. E&O insurance is a good starting point. His insurance is probably around $3000/year. He is probably going to do maybe 100 inspections this year. My insurance is close to that, but it also covers the guy working for me, and we will probably do between 600 - 700 inspections.

Add in the required continuing education, license fees, etc, his per inspection cost is way higher than mine - yet he is charging so much less. I'm guessing he will not be around next year.

Sorry for the thread drift.
JF

Everyone needs to do Brian's cost of doing business program. I probably need to do it again to refresh my numbers, and I've been doing this gig for about 19 years or so

[ABOUT CHECKING OUT YOUR COMPETITION

Yes, I had a call from Richmond,Va about 50 miles away. Said he was gonna buy a house between now and Dec 30th. Wasn't sure how big, where, just wanted to get prices for info. Hmm, sounds kinda suspicious doesn't it. I just emailed a standard price list. I charge what I charge and if somebody wants to undercut it they can.

My fees are based on how much time I will have invested in the inspection, this includes the report. On a large property (over 7,000 sf) I charge by the hour. Otherwise I pretty much know how much time it will take to inspect a home, this type of knowledge comes with experience.

I do not have a posted or printed price list. This allows me to adjust my pricing as I see fit. If it is slow and I really want a job, I can adjust my price. If the home is in a bad area, or an area that I really don't want to drive to, I will raise my fee. I also don't add a "Travel" or "Mileage" fee, I just build it into my fee or quote.

If you are new, you have to be competitive and charge what the norm is for the area. Once you are established you can charge higher fees.

I charged by the hour, which would allow me to do as much, or as little, as my clients wanted me to.

Over time, my clients kept wanting more, and, being as my inspection fee was 'by the hour', I did not have to try to meet 2 inspections per day, or 1 inspection per day, if my clients wanted me to, I could spend 1-1/2 or 2 days there, which ultimately grew into my typical time frame.

Yet, I could also spend a week there on large homes checking as much as my clients wanted, documenting it for their builder to repair, potential legal action if their builder did not repair it, or for the seller to address.

The 'best standard', and which give built-in raises, is 'based on sales price', but that does not apply if it is not a 'sale', i.e., 1 year warranty inspection and other inspection (which was most of my business).

Inspection cost 'based on sales price' does not work well with being able to do whatever your clients wants - because you are basically limiting your fee/time to that charged.

I charge by the square foot and age and I always seem to be a little under my competition (but not under what the market will bear) .... when I started in business 18 years ago my competition was getting $300 as a base price... I charged $250 as a base and was told I wasen't charging enough but I figured I would rather do two $250 inspections a day than no $300 ones .... I'm a one man shop with little overhead .... many guys in my area (CT) have a sliding scale with various increase incriments for any minor additional service.. I know I'll be at the home for about two hours and then I need another two hours to complete the report and get it out ..... I charge $125 for a continuous radon monitor test (others get from $100 to $200)... I figure I'm already there so why be greedy and maybe loose the job.... right now all of us in CT are sitting on our hands and I'm glad I don't have two or three guys relying on me for work... because there isn't any... the one thing I did learn early on was .... when a customer says ..... "John (realtor/friend) told me to call you for an inspection" that is the one that you can charge more for if you like because he is not shopping and will do what "John" told him to do... I would get an extra $50-$100 depending on the travel time ... but I would not go crazy and loose the inspection and piss off John so he doesn't refer any more to me ...

Good morning gentlemen,

This is my first time on this forum since I joined.

How to establish inspection fees has always been a debatable topic. It seems to be a regional issue. I'm in an area where I have little or no competition, the nearest being over 80 miles away. My fees are based on square footage, with the average being about $400. My driving range is about 30 miles one way, with majority within a seven mile radius. I've been doing inspections for about eight years. I'm well known here and have a reputation for being thorough and sometimes nitpicky. The local Realtors recommend my services and I receive many calls from local ads and referrals. I've been able to increase my fees about 5% each year. I also do new construction code compliance inspections with fees based on the old ICBO fee structure.

Hope this helps. Have a great day!

Alaska Don

Originally Posted by Jim Entwisle

I charge by the square foot and age and I always seem to be a little under my competition (but not under what the market will bear) ....

Jim,

Are you sure you meant to say it the way you said it?

Being as your competition is still in business, and being as they *charge more than you do* (by your own admission - "I always seem to be a little under my competition"), then, yes, *YOU* are charging "(... under what the market will bear)" because the market has already accepted the higher prices of your competition.

The market will bear those higher prices (or your competition), and may even bear prices which are higher than your competition's prices.

I also price by the square foot. I have been having trouble with agents telling people what they think I charge or what they feel I should charge. I also have agents who understate the square footage and they expect me to hold to my price based on their bad information.

How do you guys handle the client or the know it all relative that wants to tag along on the inspection and turns a 2.5 hour inspection into the 4-5 hour inspection? I am tempted to tell them I have allowed 2.5 hours for the inspection and any time after that will have to be billed at $100.00 per hour.
Any input from you guys who have been around awhile is helpful. Thanks, Curt

Curt,

For those who wish to tag along I personally give them a notepad and a pen and tell them to write down anything they might have concerns on and I'll address those items at the end of my inspection.

I let them know if they continually follow me on my heels asking questions, I may possibly over-look an important issue and then I ask them is that what they want? They get the idea and most back off. Most I would say is really interested in what you find and don't really mean any harm.

Had one last week and he followed me around like he was my shadow. He kept apologizing for being in the way but continued to be in my way. I finally told him he could follow me but I didn't believe his apology was sincere and he finally backed off.

rick

Thanks Rick, I appreciate you sharing your experience and insight. I'll be heading to the supply store this evening for note pads. Curt

Originally Posted by Richard Rushing

Mine is ditto Rick's reply... we ask and need the exact same information he requires.

• I'm now at .13-.14/sq ft. livable space (rounded up to nearest $5)
• add $2.00/ a year for every year the home is over 25 years old (example: add $70.00 for a home that is 60 years old)
• add $35.00 crawlspace
• add $40.00 pool
• add $20.00 spa
• Foreclosures and repo's-- I charge .17/ sq ft.

After calculating all of the above, I now add $30.00 per inspection. The $30/per is now a gas/insurance surcharge.


rr

I like you. Will you come be my call taker? I do charge $70 for a pool b/c that is what many others were charging when I began. I also charge $50 for crawlspaces. I tell people that is my snake finder's fee.

I need to charge for older homes but have yet to do so. I like your calculations.

Bruce

Originally Posted by Curt Raymond

I also price by the square foot. I have been having trouble with agents telling people what they think I charge or what they feel I should charge. I also have agents who understate the square footage and they expect me to hold to my price based on their bad information.

How do you guys handle the client or the know it all relative that wants to tag along on the inspection and turns a 2.5 hour inspection into the 4-5 hour inspection? I am tempted to tell them I have allowed 2.5 hours for the inspection and any time after that will have to be billed at $100.00 per hour.
Any input from you guys who have been around awhile is helpful. Thanks, Curt

Funny about the way we all can perceive things differently. I, and a lot of inspectors in this part of the country encourage client participation and questions. In order to keep things manageable, I ask them to let me have a run through while they review the contract and SOP, measure things, or whatever then I will take them around on a review of the property, problem areas, or good things noted. I like the "make your own notes" concept. I recall a comment from someone about letting them, (client, family, friends) use a LASER measuring device to play with. And I tell them to plan on setting aside 4 hours or so for the inspection.

Stu

Originally Posted by Curt Raymond

How do you guys handle the client or the know it all relative that wants to tag along on the inspection and turns a 2.5 hour inspection into the 4-5 hour inspection? I am tempted to tell them I have allowed 2.5 hours for the inspection and any time after that will have to be billed at $100.00 per hour.

Curt,

It does not matter 'how much time *YOU* have allowed' for the inspection if you quote them a fixed fee and sell a 'complete' inspection.

Your only choices are: Charge by the hour to accommodate those people, and price your inspection that way when they call to schedule the inspection, or, follow Rick's and others advice (as you said you were) by 'giving them something to do'.

Just don't give them a "fixed" price for your 'complete' inspection and then expect to be able to charge more because they get in your way - *while you are with them at their inspection* ... *they should be your priority* ... not 'oh my gawd, how am I ever going to make it to my next inspection on time'.

Originally Posted by Richard Rushing

I'm now at .13-.14/sq ft. livable space (rounded up to nearest $5)

I charged .15/sf ft. TOTAL area in 1996 ... I don't see how you can do it for that a decade later???

After calculating all of the above, I now add $30.00 per inspection. The $30/per is now a gas/insurance surcharge.

Instead of adding on a gas and insurance surcharge, simply include it in a slightly higher fee - go from 'livable space' to 'under roof space' ... that will typically add another 400 sq ft or more just for a two car garage, that's $54 at .13-.14/sq ft. Plus you have (many times) large porches, etc., which will add to the 'total square feet'.

Hi Jerry, I agree with what your saying about giving the client my undivided attention, and I don't generally mind if they come for the full inspection. I think it is a great way to manage expectations of what it is that I am doing. It is also easier for them to see first hand what is going on with the property. The issue I am having is 5 hours on a 1700 square foot town home slab on grade. The 5 hours did not include 2 hours of report writing time.

I appreciate your in put I'm just trying to refine my pricing and time management. How do you price it? Most client are looking for a total price. Have you found that it works better to break down what makes up your price or give it to them in an hourly term?

Thanks, Curt

I charge by the inspection. Unfortunately the average inspection in Indianapolis is in the ball bark of $225.00-$250.00 for a 2500 sq/ft. home. I charge $255 for 2500 sqf/ft. and upcharge for crawl spaces, but I do like the idea of charging strictly by the house size. I have heard of others doing that, but wasn't sure how it would be accepted.

For those who charge (or used to charge) by the sq/ft....

How do you determine the square footage?......(mls sheet, realtor statement, actual measurements taken by you at the property, etc.)

If you actually measure, do you just do the outside dimensions of the home?

Would an enclosed sun room, patio etc. be included in the calculation?

Do you give them a ball park figure when they call?
ie. A typical home with 2500 sq/ft. will cost approx. $375.00 @ $0.15 per sq/ft.

What do you charge (if anything) for unfinished basements?

Originally Posted by Jon Randolph

For those who charge (or used to charge) by the sq/ft....

How do you determine the square footage?......(mls sheet, realtor statement, actual measurements taken by you at the property, etc.)

If you actually measure, do you just do the outside dimensions of the home?

Would an enclosed sun room, patio etc. be included in the calculation?

Do you give them a ball park figure when they call?
ie. A typical home with 2500 sq/ft. will cost approx. $375.00 @ $0.15 per sq/ft.

What do you charge (if anything) for unfinished basements?

I did go through period where I charged for garages (usually 400 sf) but no one else was doing that and I am already the 2nd highest price in town, so I quit including the extra sfootage. No on porches. Generally people don't know that answer and I don't want to measure houses.

As far as how do I figure out the sq.ft., I ask them. If I can get the MLS, I use that or ask the realtor. I generally don't tell them .11/sf (not that I'm hiding, they just don't care). I ask them the sf plus other questions (foundation, pool, extra hvacs, etc...) and then give them a price. My minimum price ends in a 9 ($239) and all my upcharges are on the tens so the price I give them ends in a 9. Subtle psychology? I dunno, but I can count on one hand how many I didn't sell.

We don't have basements in TX (as a rule).

If the sun room is part of the sf (seems like it is b/c the seller wants you to know how big a house you're buying), I charge for it. If I don't know about it, I don't charge. I don't personally want to go back and tell someone a different (higher) price after I've given a quote. I guess if there were what I considered a substantial difference in the information I was given, i.e. it is a crawl space instead of a slab, etc..., then I would probably add that to their bill.

Bruce

Originally Posted by Jon Randolph

For those who charge (or used to charge) by the sq/ft....

How do you determine the square footage?......(mls sheet, realtor statement, actual measurements taken by you at the property, etc.)

I asked what the square footage was, then asked 'Oh, that's living area, right?' With the 'Yes.' reply I then went on something like this ...
'I believe most of those homes there have 2 car garages, does yours?' With a 'Yes.' I would say 'Okay, they are usually about 20x20 so that's about 400 sf, and most also have a small front porch, maybe 30 sf and a rear porch most of the way across the back of the house, probably 15' x 40' ... ', this is where they would interrupt and say 'No, the back porch is only about 12'x20' ... ', to which I would say 'Okay, the back porch is about 250 sf, add in the front porch, the garage and the house and it's about ... sf - let's see, that's about $xxx ... sound like I did the math about right?'

To which I would typically get a 'Yeah, sounds about right to me.'

Then I would add, 'I can step the house off and double check what the seller is telling you, want me too?', to which they would reply 'Sure.' Then, if the house was a lot larger and I felt I needed to, I could address the size with them - they said they wanted me to 'check it'.

If you actually measure, do you just do the outside dimensions of the home?

I would just step it off, and, if a client thought I was way off (happened twice) I would get out my rolling wheel measuring tool and roughly measure it, I would usually be off too, in their favor, which I would be glad to correct if you want me too ... ?

Would an enclosed sun room, patio etc. be included in the calculation?

Many times I even said 'Those houses there have about a 2' overhang, if the house is about 40 ' x 60', that 200' feet around, for about another 400 sf. 'Huh? Why are you measuring that?' 'Because that's how big the roof is, and I have to inspect the roof and the attic.

Do you give them a ball park figure when they call?
ie. A typical home with 2500 sq/ft. will cost approx. $375.00 @ $0.15 per sq/ft.

Yes.

What do you charge (if anything) for unfinished basements?

Don't you have to inspect it?

The lady who used to answer my phone and Jeff Hooper's phone would explain it to my clients this way: Oh, your house is 15,000 sf? Let's see ... that's 15,000 sf inside, 15,000 sf in the attic, and another 15,000 sf on the roof - but the roof is actually more because of the overhang and slope ... but don't worry, just because Jerry is inspecting 45,000 sf does not mean he charges that way, he only charges based on the 15,000 sf base size.'

The client goes away thinking 'Whew! For a minute there I thought she was going to quote me a price based on 45,000 sf, I can go with the 15,000 sf price.'

Of course, that changed when I changed to by-the-hour pricing.

Then that 45,000 sf was used to let them know why I was typically there for so long, and what would you like me *not to inspect* so I'm there less time?

Originally Posted by Jerry Peck

Jim,

Are you sure you meant to say it the way you said it?

Being as your competition is still in business, and being as they *charge more than you do* (by your own admission - "I always seem to be a little under my competition"), then, yes, *YOU* are charging "(... under what the market will bear)" because the market has already accepted the higher prices of your competition.

The market will bear those higher prices (or your competition), and may even bear prices which are higher than your competition's prices.

Jerry,
You have a very valid point... I have anguished over pricing forever.... and when times are slow and money is short I always feel I should have charged more for the work I did.... having said that.... I hate it when I quote a price and then hear "Thanks, I'll call you back"..... because I know that the customer will take the next inspector that matches my price or is slightly higher (it's easier than calling me back) .... I have always felt that you need to "grab" them on the first call or you will not hear from them again..... any thoughts would be appreciated... jim

Originally Posted by Jim Entwisle

Jerry,
You have a very valid point... I have anguished over pricing forever.... and when times are slow and money is short I always feel I should have charged more for the work I did.... having said that.... I hate it when I quote a price and then hear "Thanks, I'll call you back"..... because I know that the customer will take the next inspector that matches my price or is slightly higher (it's easier than calling me back) .... I have always felt that you need to "grab" them on the first call or you will not hear from them again..... any thoughts would be appreciated... jim

For a moment, let's assume the issue isn't price. When a potential client calls, how do you present yourself and your business? Do you have ready answers for questions that may arise? What is your level of confidence sound like on the phone? Do you immediately give a price if that's the first thing asked? Do you give yourself a chance to state what YOU CAN DO for the caller?

And, there will be times when you can't satisfy the caller. I just had a call the other day from a guy in FL buying a house in my area. Liked my web site and wanted me to do an inspection. Things covered, report, fee, all okay. However, he wanted to know if I was "licensed".
A: The state of Virgina does not license Home Inspectors.
Q: "Well, how about locally?"
A: There are no licensing requirements for home inspectors locally.
Q: "How about a business license?"
A: In the county in which I am based, you must have an annual gross in excess of $100,000 before a business license is required. I have yet to reach that number.
Q: "But I'm looking at all these people who say they are licensed" (he didn't say where he was looking and I didn't ask, perhaps I should).
A: There may be individuals in VA who advertise Home Inspection and claim to be licensed, but they are licensed as contractors (builders), electricians, plumbers, HVAC people, realtors, appraisors, etc., not home inspectors. And, there are some licensed PEs who are home inspectors.

He keeps at this line for a while longer. I finally said, "Sir, I have enough things I HAVE TO DO; Paperwork I have to manage; Fees, certifications, and documentation I am required to do without looking for additional things that aren't required. I don't know what else I can tell you".

He finally says okay, we'll do it. I'll call you back tomorrow.
I haven't heard back. Maybe he found a licensed contractor to inspect his house. Which is OK. Of course, this was all on my toll free line.

Stu

Re: previous post including customer and licensing. I'm replying to my own reply

Perhaps, upon reflection, this was a lesson in business life to be learned. If asked, "Are You LICENSED?", maybe I should just say, "SURE!".
I could give'em my driver's license number (it isn't SSN), or my old FCC license, or just pick a number. I wasn't asked if I was a licensed Home Inspector. Wouldn't be a lie either. Okay, my wife is always telling me I'm a smart-ass.

Originally Posted by Stuart Brooks

... he wanted to know if I was "licensed".
A: The state of Virgina does not license Home Inspectors.
Q: "Well, how about locally?"
A: There are no licensing requirements for home inspectors locally.
Q: "How about a business license?"
A: In the county in which I am based, you must have an annual gross in excess of $100,000 before a business license is required. I have yet to reach that number.

Originally Posted by Stuart Brooks

Perhaps, upon reflection, this was a lesson in business life to be learned. If asked, "Are You LICENSED?", maybe I should just say, "SURE!".
I could give'em my driver's license number (it isn't SSN), or my old FCC license, or just pick a number.

Stuart,

"upon reflection" ...

I was expecting you to say that you would get a business license *YOU REALLY SHOULD HAVE ONE*, then, when asked those questions, you can answer them ...

Q: ... he wanted to know if I was "licensed".
A: The state of Virgina does not license Home Inspectors, however, I and other home inspectors have been working toward the state licensing home inspector, without success so far.

Q: "Well, how about locally?"
A: Yes, I have the only license available locally, a business license. As I stated, I, and other, home inspectors have been working toward getting home inspector licensing.

You have told him 'why no "home inspector" license and that you have been working for home inspector licensing, but until then, you are doing all you can.

That avoids getting into what licenses others have. By giving the response you gave, you are implying that the others are 'better' because they have other licenses - don't even go there.

Originally Posted by Jerry Peck

Stuart,

"upon reflection" ...

I was expecting you to say that you would get a business license *YOU REALLY SHOULD HAVE ONE*, then, when asked those questions, you can answer them ...

Q: ... he wanted to know if I was "licensed".
A: The state of Virgina does not license Home Inspectors, however, I and other home inspectors have been working toward the state licensing home inspector, without success so far.

Q: "Well, how about locally?"
A: Yes, I have the only license available locally, a business license. As I stated, I, and other, home inspectors have been working toward getting home inspector licensing.

You have told him 'why no "home inspector" license and that you have been working for home inspector licensing, but until then, you are doing all you can.

That avoids getting into what licenses others have. By giving the response you gave, you are implying that the others are 'better' because they have other licenses - don't even go there.

Thanks Jerry
Local Business License - I guess I could - would be the only one around other than franchised multi-inspector firms. But - it's strictly a tax revenue base for the county - They don't figure you have enough personal property to tax and make it worth their while under $100K. That's what's taxed, personal property, only. Or, I could take the Business 101 8 hrs course required to get a contractor's license. - I kinda like my smart ass comeback though.

I DO like your reasoning though. Makes sense. Will take it under advisement.

Stu

Stuart,

How much does a business license (Occupational License) cost there?

When I was in business, my Occupational License fee was $100 for the city and $27 for the county (only the city and county where my office was located could require an occupational license, even though I did work in three counties and many, many, many cities within those counties).

Originally Posted by Stuart Brooks

I kinda like my smart ass comeback though.

That attitude may have shown through on the phone, and *THAT* 'may' be why you did not hear back from him.

I sometimes gave smart a*s replies too, but not of that type, mine forced their hands and made them think they had to stand their ground ... when it got obvious that all they were interested in was "price", we would tell them everything they needed to know about us and what we do and did differently than other inspectors, and, when pressed again for "price" we would say 'Oh, price? You don't need to worry about that *YOU CAN'T AFFORD US* anyway ... ', at which time they would typically break in and say 'Oh *I* CAN AFFORD you ...', to which we would say 'No you can't ...', they would reply 'Yes I can, if I want to.'

(after a moment of silence on our part)

'You are saying that price does not matter, that what we do for you matters?

'Yes, that's what I'm saying.' (Got them biting at the hook, just need to set the hook now.)

'Are you sure you want someone who does blah, blah, blah? You know it will take longer and that means it will cost more.'

'Yes, that's who I want.'

'Well, okay then, the price is ... , but I can't get out there until next week or the week after.'

'I can wait, put me in your schedule, call me if something opens up sooner.'

"when it got obvious that all they were interested in was "price", we would tell them everything they needed to know about us and what we do and did differently than other inspectors, and, when pressed again for "price" we would say 'Oh, price? You don't need to worry about that *YOU CAN'T AFFORD US* anyway ... ', at which time they would typically break in and say 'Oh *I* CAN AFFORD you ...', to which we would say 'No you can't ...', they would reply 'Yes I can, if I want to.' "...

Jerry
That is a very good enticer.
Give em a challenge
Will not work on everyone (nothing does) but on those (price obsessive), what have you got to lose?

Originally Posted by Jerry Peck

Stuart,

How much does a business license (Occupational License) cost there?

When I was in business, my Occupational License fee was $100 for the city and $27 for the county (only the city and county where my office was located could require an occupational license, even though I did work in three counties and many, many, many cities within those counties).

In Spotsylvania County: (from the Commissioner of Revenue Web page)
Business License
Regulations and Dates

Business License County Requirements:
The business needs to have gross receipts over $100,000 per calendar year before a business license is issued. However, you may operate a business in the County without a license until your gross receipts exceeds $100,000.


Other than tax rates and personal property tax rates, they list nothing as a "fee for license". Not even on the application. I don't think its a lot. But they apparently really really don't want to be bothered with a license application for gross receipts under $100K. And, the first 50K is exempt from taxes.

Virginia is very conservative when it comes change , especially adding regulations and the requisite regulatory agencies and cost to operate them. Home Inspectors come under the auspices of what was the the Asbestos and Lead Regulatory Board so it became the Asbestos, Lead and Home Inspector Regulatory Board. Again, NO LICENSE requirement but the state does have a "voluntary" inspector certification program. IF you want to call yourself a "CERTIFIED inspector or claim to perform CERTIFIED home inspections, then you have to be certified by the state board. ASHI people worked with the board so their requirements almost mirror ASHI's. However, you can get by with 50 inspections if you have 70+ IN CLASSROOM contact hours.

Radon testing and mitigation is stuck way back into some dark corner of the Department of Health.
Stu

Stu
Stu

When I get that initial question asking "What's your price" or I just was calling to get your prices, I go ahead and give them the price, but I follow up with this statement, "I understand that price is an important consideration when choosing an inspector, but don't let it be the only thing you consider when choosing an inspector. I then without hesitation tell them what the inspection entails and I usually end up talking about 10 minutes and though I haven't been successful every time, I've had more wins than losses when using this approach.

Originally Posted by Rick Hurst

We base ours on :

1. Age of Home
2. Square footage
3. Location (drive time)
4. Gas or Electric or both
5. Extras: Pools, spas, sprinklers, additional mechanical
equipment.
5. Slab / or Pier and Beam
6. Vacant or Occupied
7. Is it a Foreclosure
8. WDI REPORT
9. Is the father of the buyer coming out?
And #10. Kind of car their agent the client drives

rick

Rick,

I know this thread is a few months old, but I was looking at it today. May I ask if you charge more or less for the home being vacant? What about foreclosures? Are you charging more or less?

Thanks in advance,
Bruce

Bruce,

No extra charge for a home being vacant. I actually prefer them myself as it makes my job easier and I have a better view of condition of the home.

As far as foreclosures, yes I add on an extra 50-75 if I'm told its a foreclosure.

Probably should charge much more on the foreclosures as most turn into a coffee table type book on what not to do a home.

Rick

Originally Posted by Rick Hurst

Bruce,

No extra charge for a home being vacant. I actually prefer them myself as it makes my job easier and I have a better view of condition of the home.

As far as foreclosures, yes I add on an extra 50-75 if I'm told its a foreclosure.

Probably should charge much more on the foreclosures as most turn into a coffee table type book on what not to do a home.

Rick

Rick, thanks for the info. Vacant is always better...especially when it comes to the attic.

What is everyone's mileage distance/fee (whether verbalized, posted or not)? Mine is not posted and is 50 miles before I start adding costs to the price of the inspection. I'm curious what others are doing.

Bruce

I still like Dana's earlier post regarding pricing the best (from another thread). Cracks me up everytime I think of it... I'm actually thinking of implementing it in my new price structure.

If anyone balks at my quoted fee, I'll offer an alternate service where they go out and take pictures of the place and email them to me, for $100 I'll review the pics and comment on what I see.

Originally Posted by Joe Klampfer

I still like Dana's earlier post regarding pricing the best (from another thread). Cracks me up everytime I think of it... I'm actually thinking of implementing it in my new price structure.

If anyone balks at my quoted fee, I'll offer an alternate service where they go out and take pictures of the place and email them to me, for $100 I'll review the pics and comment on what I see.

Of course, there would still be a mileage charge depending on how far away they were when they emailed the photos.

Bruce

We have 3 age catagories and about 8 size catagories. I've found it's just enough to keep agents from guessing the price and quoting it in anything more than a general guess.

I'll also charge a travel fee if it's more than about 30 miles from the center of our metro area. I've actually upped those a great deal in the last year because of the price of gas. People rarely complain.

I really try to not focus much on any one inspection. If I did I'd drive myself nuts. For every nightmare father-law following me around there seems to be a 4000 sq ft new vacant house with a key under the mat.

If/when it's slow I'll make deals to stay busy... like someone said, 2 @ $250 is more than 0 @ $300.

I haven't read all the comments on this post but wanted to add something I just started and seem to be working out for me. A while back I read about using the credit card to your advantage. I get calls from out of town buyers and I tell them my price then say I will schedule them for the inspection and take their credit card info as a deposit. Usually around $100. Ever booked a room in a hotel without putting up your card? I have some cancellation info for then but the point is I don't get to many cancellations. I like this method it seems to lock them in and stop price shopping.

I have a business to run and I don't want tire kickers or someone who whats to low ball me or waist my time with there mind games. You know the type ask 1,000 question just to satisfy there ego. I do this nicely but I am not afraid to ask for my price. I also have some Realtors who want to roll the price of the inspection into the escrow and settle up at closing. I try to discourage this but out of town buyers are not hear so sometimes it is necessary. I add $25 for the bookkeeping. I also get the closing date so I know what I am dealing with. Using the credit card sometimes gets around the escrow thing. Please understand my area we have lots of boomer's moving here so it is a little different from my previous home area. Whatever method you use be comfortable with it and the conversation associated with ashing to the inspection fee and method of collecting it. I to am hoping for licensing here in New Mexico so pricing can be more in line with our talents and business requirements.

Hi,

I am starting my 5th year in business and have experienced most issues raised in these postings. Including looking back to the busy time and saying "I wasn't charging enough"!

I estimate my extra time to process paymnet through escrow at 45 minutes with the faxed cover letter, invoice and fee request letter as well as the followup calls. I charge $90 billing fee to go through escrow. No one turns it down, but the rare balk can be lowered to $75 and I can still feel okay. I call it a "delayed billing fee" so if they end up paying outside of escrow after all then the $90 charge still applies.

After awhile in business I realized that no caller was ever fazed by my price and so I raised the cost and continued to creep pricing upward until I lost about 5-10% of the callers. This lets me know that I'm in a good zone. I am glad to let those go because then I work with a higher quality client (less hassles). I am happy to let the lower-price guys use up their time with those junk clients / junk houses. I'm still not the most expensive, but I am higher than the average inspection fee.

I also offer component costing (starting at $175 to give cost ranges to fix items with a $500 threshold). Meaning if it is under $500 to fix then I don't include it in the cost analysis.

I also charge $175 for a single-component inspection verbal inspection - $195 for a written report. The most common is "just the roof". I recently inspected just the grading / drainage on a home.

Kind Regards,
Corey Folsom

Originally Posted by Corey Folsom

Hi,

After awhile in business I realized that no caller was ever fazed by my price and so I raised the cost and continued to creep pricing upward until I lost about 5-10% of the callers. This lets me know that I'm in a good zone. I am glad to let those go because then I work with a higher quality client (less hassles). I am happy to let the lower-price guys use up their time with those junk clients / junk houses. I'm still not the most expensive, but I am higher than the average inspection fee....

Kind Regards,
Corey Folsom

Interesting thought re: your 5-10% statement. Thank you for sharing that.

I've noticed the higher quality clients are not always the purchasers of the high-end homes. Generally speaking, my highest quality clients are purchasers of average homes.

Sincerely,
Bruce

When asked if I would bill to closing, sometimes I would say - 'sure ... you write me a check now ... add it to your commission and you will get it back at closing'.

Only had a couple of agents do it (for family members buying houses).

Originally Posted by Corey Folsom

Hi,

Kind Regards,
Corey Folsom

Cory,

Would you finish filling out your user CP located at the top to include your location?

Thanks,

New Add-On Fee of 100.00 as of today!

If Porty potty turned over in front of home

Originally Posted by Rick Hurst

New Add-On Fee of 100.00 as of today!

If Porty potty turned over in front of home

.
.
I thought all yoiu Boy's tipped in Texas was Cows.

I have found it easier for me to have a simple price structure. I found that some buyers got too confused with add on fees. Plus it made me look better, that I wasn't charging them extra for anything. My fees are near the top end of the market, and I did 380 inspections last year.
I have one fee for single family homes ranging from 2 to 4 bedrooms or 1 to 3 bathrooms. I have separate fees for condos and multi-family units of course.
This also plays along with the idea of getting a job at one price or no job at a higher price. If I am already at the property, it will not affect me to check a detached garage or some other feature (even a crawl space). So I don't get another $25 to $75, I still made my fee for doing an inspection.

A note on the cost of doing business. While this might seem obvious to many of you, I simple took the information from my taxes for all buisness expenses. Divided that by how many inspections I did and now know what it costs me ,on average, per inspection. What's left over can then be calculated with how many hours I average per inspection and that gives me my salary. I was surprised to see that about 1/3rd of my total fees go to running this business. That includes EVERYTHING, just as I submitted for taxes.
Not including your salary, does everyone know how much of each inspection goes to operating your business?

A note on the cost of doing business. While this might seem obvious to many of you, I simple took the information from my taxes for all buisness expenses. Divided that by how many inspections I did and now know what it costs me ,on average, per inspection. What's left over can then be calculated with how many hours I average per inspection and that gives me my salary. I was surprised to see that about 1/3rd of my total fees go to running this business. That includes EVERYTHING, just as I submitted for taxes.
Not including your salary, does everyone know how much of each inspection goes to operating your business?

BTY, I think this is an important figure to know, then I know what it costs me to walk out the door and I can decide what I want to keep for each long day. My cost per inspection was a bit over $200 last year. My goal is $170 per job.

I never meant to imply that I focus on higher-end homes or that a more expensive home implies a better client. On the contrary, by bread and butter is the 'average' home.

I have used Brian's Cost of Doing business program and found it a "must do". Without a program like it, it is very easy to forget things like vacation, retirement fund, and the budget for "planned" replacement of equipment, vehicles, etc..

I know many people that buy a car, laptop, tires, electrical tester, etc, and not give a thought about replacement. You know that as soon as the new tires go on the car, THEY ARE WEARING OUT!! - you need to plan for the replacement, and budget for it to avoid those nasty surprises.

JF

Originally Posted by Corey Folsom

My cost per inspection was a bit over $200 last year. My goal is $170 per job.

My 'cost per inspection' was more like $500-700.

I did an average of 75-100 inspections per year and my cost to 'keep the doors open' was about $50,000.

Of course, though, my in$pection fees were much higher too.

My base price is $250.00 from 0 to 1250. Every 250 sq. adds $25.00

So I range it for the price shoppers. 1250 to 1500 is $275.00
1500 to 1750 is $300.00 and so on.

My biggest market this last year is the RTP area and Asian/Indian buyers at a average rate of $400.00 to $500.00. If it wasn't for the foreigners I would be in the cheese line.

By the way Jerry.........When home Inspectors retire do they become consultants! I see alot of consultants here.........
I'm still waiting for your Book to be written......

Originally Posted by Mike Schulz

By the way Jerry.........When home Inspectors retire do they become consultants! I see alot of consultants here.........

Only those crazy enough to not stay away from the business.

I'm still waiting for your Book to be written......

So am I, but so far I have not found anyone crazy enough to write it for me.

Jerry,

I have a vision of those books.

IS IT A PANEL OR SERVICE EQUIPMENT?
VOL. 1&2
by: JERRY PECK

Originally Posted by Rick Hurst

Jerry,

I have a vision of those books.

IS IT A PANEL OR SERVICE EQUIPMENT?
VOL. 1&2
by: JERRY PECK

Nah, those two are just explaining to our esteemed "professional electrician" who visits here what and why AFCIs are 'needed'.

The "Is it a Panel or Service Equipment" is a 32 volume Britannica Encyclopedia size set, gift wrapped in gold leaf, of course, with your choice of yellow or white gold. The annual year book update is included for the first 5 years at no additional cost.

In my pricing, I always quote HIGH and offer the customer a small discount for either 1) make them feel good about their chosen inspector/company or 2) at risk of losing the inspection. It has been a great system.

Originally Posted by Jerry Peck

When asked if I would bill to closing, sometimes I would say - 'sure ... you write me a check now ... add it to your commission and you will get it back at closing'.

Only had a couple of agents do it (for family members buying houses).

Just got a call about collecting at closing. I added 75.00. The realtor asked why. I not only told her the fact that any deal could fall thru even at closing but if it does then I can not collect from the title company (or whom ever) but the potential buyer might say that they did not buy the house, why pay for the home inspection. I also told her that she would have to have the buyer sign a form that she will pay at that closing date know matter what the outcome of the sale.

Got burnt a couple of times. The realtor said she would pay if the client doesn't. I said "in that case will you sign the same as the client" I have not got a call back yet.

Ted

We charge by the hour when people call for plumbing inspections. Now I have had complaints about my rates verses my computation charges. I use this line that my father been using for over 50 years. "Our rates are based on our overhead, not what our competitors charge."

To figure out our hourly rate we take our fixed overhead. Fixed overhead being your fixed monthly bills like rent, advertising insurance yours and your staffs salary and so on. Easiest way to do this is with last years profit and loss statements. You take your expenses for the year divided that by 52 weeks, then divide that by how days a week you will be working lets say 5 days a week. Now you divide that by how many billable hours you think you can avg per day. That is your break even charge, now the company needs to make a profit, we do a 30% mark up on that. So that is how we come up with what we charge. If there is special equipment needed we do an equipment charge in addition to our labor rate.

Ron Hasil

Originally Posted by Stuart Brooks

Just a poll
As a home inspector, what basis do you use to establish inspection fees?

I call my local Pub to check my tab, then I call my Bookie to determine any current expenses, then I factor for profit & overhead and finally add a gas surcharge to figure my final price, it is all very scientific.

In 1996 I averaged around 20 cents a sq. ft., but I was also practicing in the highest priced neighborhood in California, per average, and I was only slightly above the average local going rate. The more successful I became the more I charged and nobody ever blinked. I know, that was then and now is now, but the formula is that generally one gets what they pay for. A BMW is a better car then a Ford, but unfortunately many home buyers fail to employ that reasoning with inspecting their new homes and the RE agents march to entirely different drummer.

"A BMW is a better car then a Ford, ..."
Better for what?
I can and do haul a ladder, lawn equipment, or 1000 pounds of materials in my Ford (F150 supercab).
Oh I see now, you said "CAR", well when I was in high school, I had a Ford Pinto, I see what you mean.

Hey Rick, want to improve your bottom line? Get rid of that gas guzzler and get another Pinto. Ford PU trucks, as well as other brands, are going the way of the Tyrannasurus Rex and I know because I be one.

Originally Posted by Jerry Peck

Nah, those two are just explaining to our esteemed "professional electrician" who visits here what and why AFC Is are 'needed'.

The "Is it a Panel or Service Equipment" is a 32 volume Britannica Encyclopedia size set, gift wrapped in gold leaf, of course, with your choice of yellow or white gold. The annual year book update is included for the first 5 years at no additional cost.

Do you actually still have and update the hard copy Encyclopedia? (Wish I did!) When I was growing up my mom and dad kept the World Book set updated every year. These books gave me my first exposure to electricity...especially how the power companies moved power from Point A to Point B. I think I was 12 years old at the time. In my opinion you can retain more information from reading a book than you can reading the same info on-line.

Originally Posted by James Duffin

Do you actually still have and update the hard copy Encyclopedia?

No, that was too expensive for us.

When I was growing up my mom and dad kept the World Book set updated every year.

That's what we had too.

My wife got a 'throw away' set of Encyclopedia Britannica from one of the schools she was at, while it had a few update volumes, it was still several years out of date (which is why the school replaced the entire set and 'threw that one away'). We had it for her girls, then, when we moved 2-1/2 years ago, we gave it to some friends who needed it (but it sure was way out of date by then).

"Is it a Panel or Service Equipment" is a 32 volume Britannica Encyclopedia size set, gift wrapped in gold leaf...

I don't have this set but, I do have an autographed edition of "Bridge Over the River GFI".

I could never figure out why HI's never picked up on the realtor percentage and the lawyer percentage and the mortgage guy's percentage. It was the rule of pricing for the "original old timers" on the east coast. Whenever a new guy came into the business he used the same percentage. The competition was in how good you were not how much you charged. We used a percentage of the selling price for 50 years and made VERY LARGE profits. Why are you all going through the nitty bitty size of the bath or how many cars the garage can hold or if there is a toilet in the barn? The simple fact is that the more expensive the house the more your exposure is, the higher the commission is for the realtor, etc. Base your fees on the house price and start making some money. If you use your current sq ft, time line, drive distance, etc, you will never make enough to retire.