Thread: Do your fees reflect the service you are providing?

I have always attempted to price my inspection services at a fair and reasonable price. I don't strive to be the highest priced or the lowest but somewhere in the middle of my competition. I also know what my cost are for me to properly operate my business. Lately and after the housing market started to recover we have seen a marked increase in folks entering the profession and with this an increase in lowball fees offered in an attempt to secure inspections at whatever the cost.

My son who lives in the Memphis TN area just sent me a link to a website that a Realtor gave his wife, they are looking at buying a new home. Anyway I was shocked when I looked at the fees this person is charging. This is the link: Pricing - Home Inspections

It simply amazes me that somebody will charge fees like this in hopes of attaining business. I know the market in the area where this person is working he could add $100-$200 to those fees and still be priced in the middle of his market.

Warning: Thread Drift (but not drifting very far)

Remember that thread a couple of years ago about adding a gas cost surcharge?

Anyone now offering gas cost rebates or discounts?

... Didn't think so.

Real easy to complain about cost increases ... but real hard to not smile all the way to the bank for cost decreases instead of giving the money back.

Originally Posted by Scott Patterson

I was shocked when I looked at the fees this person is charging. This is the link: Pricing - Home Inspections

Well.. if that is what they feel they are worth.. but consumers should remember they get what they pay for.. and the lowest cost is often not the best value.

guys

you get what you pay for--I start $350

cvf

Originally Posted by Robin Wells

Well.. if that is what they feel they are worth.. but consumers should remember they get what they pay for.. and the lowest cost is often not the best value.

I sold my business in 2006 and our minimum fee in 2003 was $350. Actually, for someone who always used the selling price as a fee basis, (1/10th of 1% after a minimum of $350) I found his price list to be refreshingly simple (although cheap) for the buyer.

I looked at his sample reports, looks like a fair value for what the buyer gets. I'm not familiar with the moisture meter he uses but I've never seen a 0 moisture reading.

I know my prices when I started inspecting 12 years ago were not what I charge now. When you start off, you do what you can to attract business.

As a side note, I would suggest that someone can always offer introductory specials or discounts, but should always set a 'list price' (retail price), and make lower prices as a special offer. You can offer a lower price, but should always start off with a normal fee amount to show what you think your service is worth. As said earlier, if this inspector thinks his inspection is worth only $100, then that isn't saying much about his inspection.

I have to disagree that the cost of the inspection has anything to do with the quality. Granted, its mostly newbies that offer cut rate prices, and being newbies, the quality of the inspection is also in question.

But newbies are not the only people that offer low rates. Years ago there was an inspector that had been around 5 or 6 years and he was charging about half of what I was.

I had occasion to have lunch with him one day and asked him why he charged so little for his work. He told me that he only needed so much money to live on, and thats all he charged. He took a lot of time on his inspections, and did a pretty good job. He just made less. A couple years after our lunch I heard he became a missionary.

That said, I feel the majority of the low cost inspectors just have no idea how to run a business, or price their work.

Originally Posted by Jack Feldmann

I have to disagree that the cost of the inspection has anything to do with the quality. Granted, its mostly newbies that offer cut rate prices, and being newbies, the quality of the inspection is also in question.

But newbies are not the only people that offer low rates. Years ago there was an inspector that had been around 5 or 6 years and he was charging about half of what I was.

I had occasion to have lunch with him one day and asked him why he charged so little for his work. He told me that he only needed so much money to live on, and thats all he charged. He took a lot of time on his inspections, and did a pretty good job. He just made less. A couple years after our lunch I heard he became a missionary.

That said, I feel the majority of the low cost inspectors just have no idea how to run a business, or price their work.

Not too many in business have that missionary mind set.

I try to price my services as high as possible, and still feel that me services are worth more than I charge.

There are many inspectors out there that no matter how low their fees are they are still too high.

Originally Posted by Robin Wells

Well.. if that is what they feel they are worth.. but consumers should remember they get what they pay for.. and the lowest cost is often not the best value.

It seems that people remember that until they get ready to spend some money. It like home inspectors when they look for the cheapest insurance coverage.

Originally Posted by Eric Barker

It seems that people remember that until they get ready to spend some money. It like home inspectors when they look for the cheapest insurance coverage.

It's after they spend the money that they remember it - poor quality is remembered long after the cheap price has been forgotten ...

(Okay, so I changed the saying around, but my changing it applies here.)

I have a few twits in my area offering $199 inspections! Some of these guys have all those fancy titles too.

Originally Posted by Raymond Wand

I have a few twits in my area offering $199 inspections! Some of these guys have all those fancy titles too.

For several years, there has been a PE around here advertising $199 for an average inspection. A few years ago, an agent told me about a HI that charged $150 for most inspections. The agent claimed that the guy did a great inspection and did 3 per day six days a week and was booked ten days in advance. If true, the HI is making a decent income, but he isn't living a life that I want. I'll charge more, do fewer and be happier than if I was working that much.

Originally Posted by Lon Henderson

For several years, there has been a PE around here advertising $199 for an average inspection. A few years ago, an agent told me about a HI that charged $150 for most inspections. The agent claimed that the guy did a great inspection and did 3 per day six days a week and was booked ten days in advance. If true, the HI is making a decent income, but he isn't living a life that I want. I'll charge more, do fewer and be happier than if I was working that much.

3 x 6 = 18 x $150 = $2,700

I got more than that for doing one inspection per week (and didn't even work have as many days either).

I don't understand why one home inspector would be concerned with what another home inspector is charging, especially if they're not in the same area. We live in a free market, capitalist society and price fixing is illegal. Whether an inspector charges $100 or $2700 is no concern to me.

Originally Posted by Ken Rowe

I don't understand why one home inspector would be concerned with what another home inspector is charging, especially if they're not in the same area. We live in a free market, capitalist society and price fixing is illegal. Whether an inspector charges $100 or $2700 is no concern to me.

It's only a curiosity what different regions can charge, but I think being aware of what your market is doing is important. For quite a few years, I was a lone wolf inspector and rarely talked to other inspectors. When I joined our local NAHI chapter, I was surprised to learn how out of touch I was about my competitor's fees and how comparatively low my fees were. I don't begrudge someone charging less or more, but knowing what the market is willing to bear is useful.

I'd love to be able to charge JP's fees, but inspections would be far and few between in our regional market at those rates.

Originally Posted by Lon Henderson

It's only a curiosity what different regions can charge, but I think being aware of what your market is doing is important. For quite a few years, I was a lone wolf inspector and rarely talked to other inspectors. When I joined our local NAHI chapter, I was surprised to learn how out of touch I was about my competitor's fees and how comparatively low my fees were. I don't begrudge someone charging less or more, but knowing what the market is willing to bear is useful.

I don't understand how it's useful. If one inspector is making the amount they want to make and working as much as they want to work what difference does it make what another inspector is charging?

A smart business person would know what the competition is doing, marketing, services, website, fees, what the clients may be saying, et ceteras.

$2700 for working your butt off for 6 days? $2700 for taking on the liability of 18 inspections?
Sorry, but I don't think thats earning a decent income.

But if you have the proper title bestowed upon you the earning potential is unlimited! Just read some of the over the top crap about how lucrative becoming a home inspector is. I often wonder about those who post how many inspections they do weekly, monthly, yearly because some of the numbers thrown about seem embellished. Of course its just my view, what the hell do I know?

Originally Posted by Raymond Wand

A smart business person would know what the competition is doing, marketing, services, website, fees, what the clients may be saying, et ceteras.

I would agree that it's smart and useful to a new inspector or an inspector trying to grow their business and income, but there are many inspectors (myself included) turning down several inspections a week. How is it beneficial to me to know that a semi-retired person is doing $150 inspections just to get out of the house and have something do do? How is it beneficial to me that someone is charging $2700 per inspection outside of my market?

Every week I get calls from people asking me to price match a lower priced inspector. Every week I have clients tell me they chose me because I was the lowest priced inspector. Neither of those matter to me. What matters is I'm able to work as much as I want and make the money I want. Should I raise my prices because some inspectors are priced higher? That's not who I am. I don't price gouge people just because I'm greedy. On the other hand I don't price match. My price is my price, if you don't want to pay it I'll fill the spot with someone who does.

And before I get hammered by people saying "there's no way you're booked solid in January and turning down inspections", no...I'm not booked solid. But today I turned down an inspection 2 miles outside my preferred inspection area, I turned down another one which was for sale by owner and the renter is doing a contract for deed, (I won't do inspections on for sale by owner houses and no agent or attorney involved). And, I turned down a request by a bank to do a preliminary inspection so the gas and water could get turned back on. Yesterday I cancelled an inspection and banned an agent from working with me in the future because she was "shotgunning" purchase agreements (submitting purchase agreements on several properties then choosing one with the most acceptable terms). I don't accept referrals from agents who aren't ethical.

Originally Posted by Ken Rowe

I would agree that it's smart and useful to a new inspector or an inspector trying to grow their business and income, but there are many inspectors (myself included) turning down several inspections a week. How is it beneficial to me to know that a semi-retired person is doing $150 inspections just to get out of the house and have something do do? How is it beneficial to me that someone is charging $2700 per inspection outside of my market?

Every week I get calls from people asking me to price match a lower priced inspector. Every week I have clients tell me they chose me because I was the lowest priced inspector. Neither of those matter to me. What matters is I'm able to work as much as I want and make the money I want. Should I raise my prices because some inspectors are priced higher? That's not who I am. I don't price gouge people just because I'm greedy. On the other hand I don't price match. My price is my price, if you don't want to pay it I'll fill the spot with someone who does.

And before I get hammered by people saying "there's no way you're booked solid in January and turning down inspections", no...I'm not booked solid. But today I turned down an inspection 2 miles outside my preferred inspection area, I turned down another one which was for sale by owner and the renter is doing a contract for deed, (I won't do inspections on for sale by owner houses and no agent or attorney involved). And, I turned down a request by a bank to do a preliminary inspection so the gas and water could get turned back on. Yesterday I cancelled an inspection and banned an agent from working with me in the future because she was "shotgunning" purchase agreements (submitting purchase agreements on several properties then choosing one with the most acceptable terms). I don't accept referrals from agents who aren't ethical.

I have this on my site. I seems to deter the people price shopping etc... It works well..You can use it

Originally Posted by Marc M

I have this on my site. I seems to deter the people price shopping etc... It works well..You can use it

Thanks for the offer but I won't be using it as it doesn't reflect what I do.

Originally Posted by Ken Rowe

Thanks for the offer but I won't be using it as it doesn't reflect what I do.

You bet..