Thread: I SHOULD HAVE CHARGED DOUBLE

Can anyone fill me in on how they handle the house that is a total sh!t box? Typically this occurs when the home is a foreclosure.

I did a home this weekend that require DOUBLE the amount of on site work and DOUBLE the amount of report writing.

Of course, the RE agent told the client the inspection would cost around 350 bucks. I was prepared to tell the client the inspection fee was going to be 500-700 dollars until i heard this quote from the RE agent.

I am sure you know my delimma....want referals from agent going forward and don't want to put them in a bad spot. I really like this agent, but this price quote was WAY OFF.


Any thoughts would be appreciated!

Jonathan

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Originally Posted by Jonathan Goad

Can anyone fill me in on how they handle the house that is a total sh!t box? Typically this occurs when the home is a foreclosure.

I did a home this weekend that require DOUBLE the amount of on site work and DOUBLE the amount of report writing.

Of course, the RE agent told the client the inspection would cost around 350 bucks. I was prepared to tell the client the inspection fee was going to be 500-700 dollars until i heard this quote from the RE agent.

I am sure you know my delimma....want referals from agent going forward and don't want to put them in a bad spot. I really like this agent, but this price quote was WAY OFF.


Any thoughts would be appreciated!

Jonathan

Unless you are charging by the hour you take the good with the bad. I charge by SF on a normal inspection, I do raise my price based on the homes location and price. Once I give a quote over the phone it does not change unless I have not been told the truth about the home. If I give a quote for a 1500sf home and I find that it is a 4500sf home, I will give my client the option of paying me the proper fee or finding another inspector.

Like Scott said, sometimes you just end up on the short end of the stick. You have no idea what the real condition of the house is until you get there and the issues start piling up. If I could charge by the hour, I would but most buyers around here wouldn't go for it. Aside from that, you just can't let the realtor dictate your fee. You're the only one that knows the amount of time and effort you'll need to put into the inspection and report.

The way I work, anyway, it's in for a penny, in for a pound - unless there's been some gross misrepresentation about the nature the property, I do the report for the agreed price.

That said, at such inspections I ruthlessly exclude and disclaim that which cannot be properly inspected;.

At a lot of these foreclosures the gas is off, the water is off, sometimes electricity is off, sometimes many of the breakers are tripped - in these situations my inspection is strictly limited to the normal visual aspects, and I completely disclaim responsibility for any inspection of any aspect of the function and operation of disabled systems which prevents their being tested in the same manner in which I would normally test them at an inspection of a occupied a normally functioning property - if people want me to come back and perform such an inspection when it's possible, I'm happy to do so for additional charge.

Gone is the day when I will function as an unpaid "project manager" to coordinate with real estate agents, sellers and clients to try and make sure utilities are on, these days I inspect what I'm handed, I report on what I can observe, and that's the absolute limit of what I will do for my price, because as noted above even that is likely to be more time-consuming, more annoying, and often higher liability than the inspection of occupied, normally functioning properties.

Interestingly, I haven't encountered any pushback from anyone as a result of this policy; when I arrived such property I clearly state prior to the start of the inspection that severe limits have been placed on my ability to discover defects, I explain what's needed to remove these limitations, I promise to do the best I can within these limitations, I explained that many things I normally expect will be excluded, and that these exclusions will be noted in the report, and everybody seems to agree that this is a reasonable way to proceed.

I ask the condition of every home, directly. I ask them when looking at this home are they saying to themselves, hmmm, this home needs a lot of work but the price may make it wort it or are they looking at it and saying, wow, this home looks like it is in great shape. Yes I know that one man view may be different than the next but in general you are going to get a fairly consistent and somewhat honest answer.

Now, as Michael said. If they misrepresented the condition of the home and even blind grammar would think it a sh** **le then I will not proceed until I talk with the buyer on the phone and get a commitment for more money. Do I ever have to do that, practically never. Have I done that, yes.

I want to know the age of the home, the size of the home, the general view point of the home, the location of the home (as it in the upper end of town or the lower end of town) The lower end of town does not mean it automatically is going to be a dump but I usually know the type of neighborhood and general condition of the home. If it is in the upper end of town it also does not mean because they paid a lot more for the home that I will sky my price either. I like expensive homes in really nice neighborhoods. In general I find much less concerns with them. They are generally a lot better maintained. I can inspect a 5000 square foot home and do the inspection and the report for that matter in less time than a much older home in tough shape that is a third of the footage.

If folks outright lie to you the first thing you do, if you do the inspection at all, is send them down to the bank while you are finishing up and get cash for the inspection.

Originally Posted by Jonathan Goad

Of course, the RE agent told the client the inspection would cost around 350 bucks. I was prepared to tell the client the inspection fee was going to be 500-700 dollars until i heard this quote from the RE agent.

I am sure you know my delimma....want referals from agent going forward and don't want to put them in a bad spot. I really like this agent, but this price quote was WAY OFF.

This happens to architects all the time. Client hires a builder first, builder recomends an architect who will do the dwgs for a "couple hundred bucks".

The handshake when you thank REA for the referral and look forward to working with him again, etc., is a nice amicable time to talk about your fee schedule.

Eat this one.

Charge it off to "marketting".

Thanks guys for the feedback.

Anyone think instituting an "add 100.00 for foreclosure inspections" is too aggressive. I know this is a personal decision, but just wondering if you guys do something similar when pricing an inspection.

I like Ted's suggestion about asking for condition of home. Maybe if REA responds "C, D, or F" the quote gets a 175.00 surcharge versus a standard 100.00 forclosure fee.

If attorney's nickel and dime you death, why can't all home inspectors do the same thing? An attorney's time is no more valuable than mine.

Just a thought!


Jonathan

The issue isn't the realtors', its yours. You didn't get the info upfront about the home to determine what the pricing should be. You apparently didn't talk with the client but let the RE handle it. If the RE gives you a referral you should be calling the client before the inspection and asking questions. You let someone else set your pricing and got screwed. You apparently care about referrals from realtors. Boo Hoo.

This is a stateent i put in my report.
The property was found to be in neglect on the date of this inspection, and we will not comment further on the obvious and numerous deficiencies in this inspection report. However, you should obtain estimates from a general contractor, because the cost of renovation, repairs on plumbing, electrical system,roofing,foundation could significantly effect your evaluation of the property. Our inspection is limited to only a few hours and this is not enough time to provide you with information on every and all the condition of this property and its structures on the day of this inspection. We noted an extensive amount of condition and deficiencies that require further inspection of the property to take further time to cover each and every item. You should contact our office to set up an additional supplemental inspection of this property. Note: there will be an additional charge... Further more you should take the time to be at this inspection and go over the entire property and every part of the structure to list every deficiencies.

Best

Ron

On the phone when setting appointment, I always asked square footage of home and is there a pool, bulkhead etc. I then ck the tax records to confirn size. Only once did I have a buyer mislead me. I corrected them with return phone call and got the higher fee.

PS. This is a great web site, thanks to all for sharing. Joe Melbourne, south florida.

Try looking the house up on Zillow.com for a picture and square footage.
I also use google maps for the satellite and street view. You can tell a lot about the place just with the address on these sites.
I tend to stick with my prices good or bad based on my published rates. Once a year I review my prices and decide then if I need a change, not on individual jobs.

Overall, I take the good with the bad. We charge more for older houses which often helps a bit but all these forclosures has certainly thrown a wrench in things.

I've found over the years that things happen in groups and then not for a long time. Things like not getting let in (realtor's late, lockbox key doesn't work, etc.) or cancellations really get to me at times. Just when I'm about ready to institute a 'policy' and charge more it doesn't happen for months. To me, it's just part of the biz. I try to remember all the dumps when I'm driving away from a 5000 sq ft new house with nothing wrong. It all evens out in the end.

When the houses are really bad (like the one you describe) I pretty much make it a point to only devote so much time to it. I'm not going to go through an analyze every circuit and pick the roof apart shingle by shingle. Basically, I go general and call for a lot of 'full system evaluations' or 'all aspects of X system needs to be checked'. For a few hundred bucks we can't be expected to write a precise punch list for a 75 year old house that's been hacked at by every owner and wanna be roofer in town. If they want an entire list I tell them to get a bulldozer.

vacant, boarded, no utilities is not an HI. It's a building assessment. Different report and contract. Less time at building, report time about the same.

Originally Posted by Jonathan Goad

Can anyone fill me in on how they handle the house that is a total sh!t box? Typically this occurs when the home is a foreclosure.

I did a home this weekend that require DOUBLE the amount of on site work and DOUBLE the amount of report writing.

Of course, the RE agent told the client the inspection would cost around 350 bucks. I was prepared to tell the client the inspection fee was going to be 500-700 dollars until i heard this quote from the RE agent.

I am sure you know my delimma....want referals from agent going forward and don't want to put them in a bad spot. I really like this agent, but this price quote was WAY OFF.


Any thoughts would be appreciated!

Jonathan

What most others have said, take it on the chin and do better on the easy ones. Set the client's expectations, "My main focus is not going to be on the minor cosmetics, etc.."
#1 Nobody should be setting the price but you.

On another note, I actually lowered my price $100 recently when I saw that the plumbing wasn't in yet, huge Sq Ftage, so much unfinished the clients walked away. They'll be back.

This is why I don't publish price lists. I find out what I can about the home and price accordingly. I don't care what the realtor thought the price would be. They need to call for a quote or tell the buyer to do so. You do take the good with the bad, but never let the realtor set your price. Most of them don't have a clue unless they have worked with you enough to have a grasp on your price structure. Our price will vary greatly depending on the age, location, and market conditions. When I am swamped, my prices are higher and when I am slow, they might be lower. We have been swamped for the last 4 months, two weeks out so prices are high right now. Don't build your biz on cheap prices, it is not worth it. I hope you told that realtor that they were way off on the pricing and that they should get the price from you in the future. Otherwise, you will be the guy that does the inspections for a cheap price. Not a good thing. Most people will think that your prices are higher for a reason and expect a good inspection from you. That is what you want. Of course you have to deliver that or it won't matter for long.