Texas Inspectors - InspectionNews

imported_John Smith · #1 (**permalink**) 12-23-2007, 12:39 PM

With 2008 fast approaching, along with the requirement for insurance, I was in the process of raising my rates. I believe I will have to raise rates about 35% to cover my business costs. I was curious to see what others will be doing to their rates. From what I can tell, the insurance requirement will eliminate a lot of inspectors (part timers, newbies that will be out of business in a couple of years). Home supplies are steady, demand is slow, but not nearly as bad as other parts of the country. I know there is a "Cost of business" program available, but I already know what my costs are. Im just trying to see what others will be doing.

Jim Luttrall · #2 (**permalink**) 12-23-2007, 03:20 PM

I have been thinking of raising rates at the first of the year also, but I am not sure how much, possibly twice the cost of the insurance to allow for the deductible and associated costs that I believe will be inevitable when giving up the decision making process to a third party.

I woke up to a dream/nightmare about being on an inspection and looking back to find the house I was just inspecting having smoke coming out of it.
Talk about a wake-up call. Made me want to review my GL coverage before breakfast!

Rick Hurst · #3 (**permalink**) 12-23-2007, 05:22 PM

Quote:

Originally Posted by Jim Luttrall

I woke up to a dream/nightmare about being on an inspection and looking back to find the house I was just inspecting having smoke coming out of it.
Talk about a wake-up call. Made me want to review my GL coverage before breakfast!

Jim, you say that like its never happened. I had one a few weeks ago that the range caught on fire when it heated up.

Seriously I know what you mean.

rick

Rick Hurst · #4 (**permalink**) 12-23-2007, 05:27 PM

John,

Whats insurance going to cost us? Maybe 3-4K a year.

If you did only a 100 inspections a year, you'd need to charge what an extra 40. per inspection. Not that much of an increase is going to be needed in my opinion to cover those costs.

I hear of guys talking of raising their fee a 100. dollars an inspection to cover the extra cost of the insurance.

Either I'm not paying out as much as they are or I'm working way too hard.

rick

Nolan Kienitz · #5 (**permalink**) 12-23-2007, 08:01 PM

Quote:

Originally Posted by Rick Hurst

John,

Whats insurance going to cost us? Maybe 3-4K a year.

If you did only a 100 inspections a year, you'd need to charge what an extra 40. per inspection. Not that much of an increase is going to be needed in my opinion to cover those costs.

I hear of guys talking of raising their fee a 100. dollars an inspection to cover the extra cost of the insurance.

Either I'm not paying out as much as they are or I'm working way too hard.

rick

Rick,

I think your calculation of an extra $40 per inspection should about cover it. Not sure about the guys talking about the $100/per.

Here again, depends on each inspector's Cost of Business.

Nolan Kienitz · #6 (**permalink**) 12-23-2007, 08:03 PM

Quote:

Originally Posted by Rick Hurst

Jim, you say that like its never happened. I had one a few weeks ago that the range caught on fire when it heated up.

Seriously I know what you mean.

rick

Rick - At least you had the salt & pepper handy to add some additional spice to the 'unexpected" BBQ.

Richard Stanley · #7 (**permalink**) 12-24-2007, 07:06 AM

I vote for the $100 - like thats going to happen.

Rick Hurst · #8 (**permalink**) 12-24-2007, 02:36 PM

Richard,

You and I both know the 100. raise would be nice but it is just not going to happen with todays market.

As slow as it is I'm already having people telling me that some guys are quoting them 175. for an inspection. Many HI's are going to be hungry in this depressed market right now, so raising your prices 100. can just about assure you that you'll be home wondering why the phone not ringing.

My son can't take the stress of the market right now so he has even bailed out for a bit.

It will be better though in a few months after the dead months of Jan. / Feb. knock out some of the part timers and not so seasoned HI's.

For the time being, I assume those who can hang on during this time will have to eat the cost of the insurance for a while.

JMHO

rick

Scott Patterson · #9 (**permalink**) 12-24-2007, 03:03 PM

Many of us have had E&O insurance for years, it just a part of doing business. As for it's cost per inspection, that all depends on how many inspections you are doing. If it is costing you $30 - $40 per inspection to have EO, then you are either part time or doing home inspections as a hobby. This is a very difficult profession to work in part time.

You will find that mandatory E&O makes for a good filter. It tends to filter out the folks who are not serious about the profession.

imported_John Smith · #10 (**permalink**) 12-24-2007, 05:41 PM

Scott, no doubt you are a competent inspector (I have read your posts for quite a while).

I kind of have to take exception with your statement "You will find that mandatory E&O makes for a good filter. It tends to filter out the folks who are not serious about the profession."

It will be a filter for sure, but a lot of these folks have put in long hours studying, doing tag a long inspections, etc. I think they are serious about it, they probably just have other jobs that they are scared to leave because of benefits, seniority, etc. True, we have to compete with them in the market place, but thats what makes this country great. Some are good inspectors, others arent, but that can certainly be said of "old timers" and others in any profession.

I hope you are personally making a great living at it. Others are selling themselves to cheap, not taking into account the cost of doing business. I think without insurance, the marketplace will weed out those not willing to commit long term.

Scott Patterson · #11 (**permalink**) 12-24-2007, 06:29 PM

Quote:

Originally Posted by imported_John Smith

Scott, no doubt you are a competent inspector (I have read your posts for quite a while).

I kind of have to take exception with your statement "You will find that mandatory E&O makes for a good filter. It tends to filter out the folks who are not serious about the profession."

It will be a filter for sure, but a lot of these folks have put in long hours studying, doing tag a long inspections, etc. I think they are serious about it, they probably just have other jobs that they are scared to leave because of benefits, seniority, etc. True, we have to compete with them in the market place, but thats what makes this country great. Some are good inspectors, others arent, but that can certainly be said of "old timers" and others in any profession.

I hope you are personally making a great living at it. Others are selling themselves to cheap, not taking into account the cost of doing business. I think without insurance, the marketplace will weed out those not willing to commit long term.

John, why is it that you are not listed on the TREC site as an inspector in Alvin, TX? Are you a home inspector? If so then why are you not using your real name?

Lou Wissner · #12 (**permalink**) 12-24-2007, 10:18 PM

i'm told there are several hi doing inspections in the lake jackson area for $145
could be why i don't many inspections down there. can't imagine staying in business long at that price. maybe insurance ill be a good filter. with the insurance and experience requirements many of my students at alvin community college are having second thoughts about becoming hi.

Barry Thirtle · #13 (**permalink**) 12-29-2007, 07:14 PM

Quote:

Originally Posted by Lou Wissner

i'm told there are several hi doing inspections in the lake jackson area for $145
could be why i don't many inspections down there. can't imagine staying in business long at that price. maybe insurance ill be a good filter. with the insurance and experience requirements many of my students at alvin community college are having second thoughts about becoming hi.

Lou,

That must be why my phone has not be ringing and when it does I don't get any callbacks.

Barry

imported_John Smith · #14 (**permalink**) 12-30-2007, 05:58 PM

Let them do those $145 dollar inspections. Im selling a service, not prostituting myself out to the lowest bidder. Maybe some of you that are so inclined can make some money for being "expert witnesses" when these guys get dragged into court.

Low prices are a sign of someone desperate. They cant have that good of a business model that would allow them to actually have a high standard of living at that rate.

Jim Davis · #15 (**permalink**) 01-09-2008, 07:43 AM

As much as we might regret the passage of a law requiring E&O insurance coverage for inspectors in Texas, there is a positive side. This requirement will weed out the newbie’s, wanabie’s and part timers. These are the same guys that keep inspection fees low and give our profession a bad name.
Any time it’s more difficult to get in and stay in a business the remaining companies (inspectors) will be able to charge more for the service. The bottom line is you should be able to work less and charge more.
We need more barriers to becoming an inspector in the state than less, it just makes good business sense and we should all be looking at our inspection service as business not a job.
Jim
Houston Home Inspection - Houston Home Inspectors

Lou Wissner · #16 (**permalink**) 01-09-2008, 04:03 PM

Jim I have to agree with you. I am not real fond of anyone forcing me to do anything, but this is going to cull quite a few. I became interested in this profession because of an unethical HI in this area. That is also the reason I became an instructor. This is a profession and we need to act and present ourselves as such. I am not out to take agvantage of any client, but I do feel that I am intitled to be paid a fair amount for quality work.

Jeff Knight · #17 (**permalink**) 01-22-2008, 11:17 AM

2 things I would bring up to think about:

1) Some inspectors have found out that having E & O insurance and advertising it is like taping a bullseye on your back for being sued.

2) How are the E & O insurance companies dealing with the required TREC formatted report that has a lot to be desired ?

Scott Patterson · #18 (**permalink**) 01-22-2008, 01:32 PM

Quote:

Originally Posted by Jeff Knight

2 things I would bring up to think about:

1) Some inspectors have found out that having E & O insurance and advertising it is like taping a bullseye on your back for being sued.

I have not seen this to be an issue and I have worked under mandated E&O for right at 7 years!

Kind of like state required car insurance. You don't really see or hear about folks running into each other to file a claim on their auto insurance.

Quote:

2) How are the E & O insurance companies dealing with the required TREC formatted report that has a lot to be desired ?

It has been my experience that the E&O providers do not really care what is in the report as long as it meets your states standards. Several states have required formats or standards that home inspectors need to report under, TX is really no different when it comes to that. You can always report to a higher standards as many inspectors in TX do. You use the required state standards as the base or minimal standard. In many of the inspector cases that I have worked on as an EW, the inspectors were hung because the used the minimal standard and not the Standard of Care!! The E&O coverage is for your protection in the event that your screw-up or your client thinks that you screwed-up!

imported_John Smith · #19 (**permalink**) 01-22-2008, 06:42 PM

Scott P sez "Kind of like state required car insurance. You don't really see or hear about folks running into each other to file a claim on their auto insurance."

I guess things are different in the volunteer state. In Texas people do run into each other to file bogus insurance claims. I thought it was a national problem, not just isolated to Texas.