Lost another one.

I just lost two jobs in the last 2 weeks to price. Both were from the same real estate office. I am new to the profession as I am only opperating on my 9th month in business. I have set my rates as to where I feel I need to be and still give my customers a good report. I have figured out how many housr it takes me to do a standard inspection and then applied it to my rate I need to live. I know that I am not the lowest price HI in my area and I don't want to be. I beleive that I give my customers a better product than what most HI's in my area are doing and have been doing. I have seen their reports and talked to different HI"s customers, so I know that I am giveing them a beter product. I have been raised in the business world that the lowest price is not always the best deal as you get what you pay for. I had reciently had a consversation with a business freind and he suggested that I am to through in my job. That made do some long and hard thinking and I have came to that conclusion that that is not so and that I am being paid to do the best job necessary for my customers. I guess my biggest delemia is that I need to rely on the realitors still untill I build my business and I need to figure out a way to deal with this and to convey to the realitors that price is not always in the best interest of the customer. I guess I am looking for some other ways to aproach this issue and still get what I need to make on a job. Waiting to hear from you.
Thanks

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Brian,

You are not alone on this one. We all have had this done. Last week I lost one. Agent called me for a price for her buyer. After getting info and quoting price, and agreeing to do it on the day the buyer needed, agent said I'll let them know and call you back.

Yea right, never heard from the agent again. I for one am not the cheapest nor most expensive HI in my area either. More of a middle of the road for the homes I inspect. I'm sure who ever got the job under cut my price by 25-50 bucks. I always wonder if they had the same qualifications as me?

Isn't it funny how no one really has a problem with paying 300 bucks (or so) for the appraisal because it's mandatory if there is a loan involved and whatever for the surveyer charges and then 3-6 percent (seller pays) to the realtor. But god forbid a home inspector who will spend 4-8 hours or more (including report time and travel) tries to charge what they are really worth???

Brian:

I wouldn't worry about it too much. I started doing home inspections about six years ago. It took two years to make any money and another year to get to the point were I wasn't worried about getting jobs. I am now at the point were my week fills up nearly every week. I often wish it wasn't so full to allow me to catch up on office work that I alway put off. I have developed a group of realtors that refer me to all their clients. Price is very rarely a factor. The clients that are so concerned about price are often the the clients from hell. I would rather not work with them anyway. I have continually raised my prices over the last two years and I continue to have a full schedule. Provide a good product and you will get more work than you can handle. Find GOOD realtors. Realtors that have been in the business a while and provide good service to their (and your) clients. These realtors and clients will tell their new agents to use you and the clients will tell their friends to use you. In six years I have not advertised or even printed brochures. All of my business comes from word or mouth.

I lose inspections once in a while because of price. It's not a good feeling, but it's part of the gig if you want to make a good living. The low price people tend to always be there. It's best just to ride them out and keep doing the job the right way. Always remember to ask the client to tell anyone they know that is buying or selling a house to call you, and give them 2 cards.

On another note, I'm not trying to be a jerk, but there are an awful lot of misspellings and grammar mistakes in your post. If you're sending out communications like that to your clients, it tends to look bad for your business. Spell and grammar check can be quite helpful.

Thats always a downer to lose business..but dont drop your prices, and the fact that you feel you are offering a better product is great to hear. 9 months isnt long to develop a large referral base, and it sounds like you are getting calls. So work on your salespitch on the phone. Sell yourself before you give the price out, but keep it swift so your caller will stay with you. They ask a price, tell them you offer a superior service and an easy to read and comprehensive report. Marketing is important, and will benefit you greatly if done right. I am not saying you are not marketing, or that you dont have a "pitch", but I went through a similar start, and if they dont know you yet when they call, make sure you give them your strong points in a quick pitch...then the price, and assure them that the price is reflective on the amount of detail and professionalism that they will get from you. And dont forget the price of a competent, professional inspection is far, far less than the price of the home we are inspecting. Good Luck..

A comprehenisve report.

A comprehensive rep-ort.

Brian, I love you man, and I love that you have sponsors. But this is over the edge. There is no way I'll be endorsing anyone
in each of my posts.

What happens if I type ass-ociation? I'm too afraid to try.

Please, consider charging the participants rather than making us look like we're endorsing a product by including a link in our posts.

Jim
You are right my grammer and spelling is bad, but I do use spell check for my reports, but not sure if it is avaliable here or if it is how to use it. If it is avaliable here please advise as to where I need to go to learn how to use it.

Brian,

A lot of good advice here. Be patient and don't lower your prices. Your work will eventually speak for itself and its worth. It takes time to develop this business. I lose about one sell a week to "shoppers" and as said above, you don't want to work for a cheapskate, you'll likely regret it.

One thing I do if I feel a potential client is hedging is to ask for their email address and send them a sample copy of one of my reports. My reports are very detailed and have good photos embedded. Have a good sample report stored on your computer so you can easily send it out in a timely manner. This approach seals a lot of deals for me.

The other thing, as mentioned above, is sell yourself. Let the client know that while you might not be the cheapest, you are one of the best.

Good Luck!

Eric

Don't worry about it, it will take years off your life!

If you have honestly priced your service at a point that you need so that you can survive, then that is about all you can do. 9 months is new and you have not had time to build up a customer referral base. Heck 2 years in our profession is still relatively new!

You need to look at how you shop for services or better yet how does the market area that you serve shop for their services. If everyone is heading to Wal-Mart then you will have a bunch of price shoppers who what the lowest price, and quality is second to price. If you are in a market that has only a few Wal-Marters and most folks shop at the local stores and speciality shops, I have found that price is second to quality.

Once you have a good referral base and you have past clients telling their friends to use you, price is not an issue. I can't recall the last time I had a price question from a past client referral.

Brian,

Unfortunately, it happens to us all. One of the big problems is realtors themselves. A lot of realtors feel like they are doing their clients a service by finding them the least expensive inspector. Part of it may be that the clients financial situation does give them a lot of extra cash, but I think the majority is that those realtors really don't see the difference between inspector A, B, C. I had a discussion with a realtor this past Saturday wheras she indicated to me that "If I drop my price to xxx, I would have the business" because that is where xyz is priced at. But, I explained to her the value my company brings to the process. I've invested in a phone system, email marketing campaign, office staff, top of the line report system, summary onsite printing in order to bring maximum value to the client. The fact that I like you guys participate in a sight like this makes us more valuable inspectors over time. I say all of that to say this....CONTINUE MARKETING, CONTINUE MARKETING, CONTINUE MARKETING. The agents that used you when you started your business may not be using you now. WHY? No one knows it could be price or it could be that in their eyes, you are too good, but they will call you to inspect their house.

Maintain you value because if you drop your price, it won't be enough and you will be asked to do it again, but yet the same expectations will be there.

report

Testing...

RR

SOB!!!!


Ass-ociation

I think when you type report, it automatically links you to something else. I didn't do it on purpose, I'm not a Homegauge user, I use another platform.

Thanks Richard. I saved that one.
Dave

Hey Richard,
If that the type of Realtors you have in your area I would be marketing to them.

I have never lost a deal due to a realtor finding a better priced inspector because I don't deal directly with agents, that's not my business. Why would an agent be calling around looking for an inspector and not the buyer anyway?

For larger homes I get 100-200 more than my competition and I market myself accrodingly so rarely do I receive calls from "price shoppers."
Been operating independent from agents for going on four years and business is great!

"Why would an agent be calling around looking for an inspector and not the buyer anyway?"

I guess there is good and bad in every crowd. It took a long time but I have found a dozen or so agents that call me all the time.
These are the rare ones that will call to set up everything and worry more about quality and less about commission.

Some buyers have a good enough relationship with their agent to let them set up the inspection. Some just don't want to be bothered with shopping around and leave it up to the agent. Like Kevin, I have a very small handfull of agents that will call me. Many will jump off my bandwagon once I have to slam a house or two. The good ones keep coming back no matter how many deals fall through.

Originally Posted by Nick Ostrowski

Some buyers have a good enough relationship with their agent to let them set up the inspection. Some just don't want to be bothered with shopping around and leave it up to the agent. Like Kevin, I have a very small handfull of agents that will call me. Many will jump off my bandwagon once I have to slam a house or two. The good ones keep coming back no matter how many deals fall through.

Yup! they jump off that wagon like a hurd of rats off a sinking ship.

As my esteemed rabid Eagle fan stated, the good ones will come back no matter what... I have had many attorney referrals from these type of agents. They are also the ones who want you to inspect their friends and family members homes.
Rich

This is a really interesting business. Any good realtor would realize that they should not get involved in the buyer-home inspector relationship. If anything goes wrong with that relationship, the realtor automatically gets in on the lawsuit action. But realtors, being realtors, usually want to have as much control over a transaction as possible. Which can be expensive for them.

There are two types of consumers. Those that seek the lowest price without regard to quality, and those that seek the best quality without regard to price. In my own experience, the later usually turn out to be more informed consumers, and usually more appreciative of an honest and thorough inspection, reflected by their willingness to compensate the inspector accordingly.

I also just lost another one - from a first time homebuyer that got a quote from a "State of Ohio Inspector" (city inspector maybe?) who said he would do the whole inspection for him for only $140!

I got him through our company website, and took the time and trouble to give him helpful info on emails and over the phone, and he called back to see if we would cut our price down to what "Mr. Ohio" was charging so he could use us. I gently refused, so he'll probably get what he pays for - sad to say. Keep your prices where they are, and keep investing in your business. When inspectors undercut each other, it cheapens the profession.

IMHO, if someone is only interested in price and uninterested in what it takes to get a good home inspection, he is welcome to go elsewhere. I'll bet if he was shopping for a big screen TV he wouldn't be pinching pennies LOL!

Here's my way of looking at it:
Some will
Some won't
Keep marketing
Keep learning
NEXT!

Does anyone have a set phone script they use when someone says the city inspector will inspect for free/cheap? I'd appreciate one.

I am surprised that this would not be against the city employer's code of conduct. Maybe there is no conflict of interest by working on the side, but it sure could end up that way pretty easily. Perhaps a phone call to the employer would clarify. Nothing like your tax dollars subsidizing this guys insurance and pension plan so he can undercut your price.

And $140 for an inspection. That is way too low, unless the guy is out of there in an hour and half and pays no taxes on the $140. Sounds pretty likely.

It's frustrating that this issue never seems to feel good with any of us...and probably won't until we break our reliance with realtor referrals.

Years ago I got "smarter" I gave my prices a push up and found that although I did fewer inspections, I made more money. We get lots of previous clients recommending our business to friends and some realtor biz, lots of attorneys and such... but more importantly we experienced three big changes as a result of increasing and holding to our higher pricing...

first, we found we were inspecting nicer, larger and cleaner homes. This made my day much more pleasant and fun. (most of the homes I inspect have cleaning ladies!)

second, these people believe they are hiring an expert and they believe they get what they pay for. We prove them right by not cutting any corners or excluding items from the inspection. We are making more so we can take as much time as we need. We pamper them.

thirdly, because we do less for more... we have less liability for inspections that might have been performed in a hurry, reports written rushing, in homes with a zillion problems. We rarely do this anymore.

Life is short, build your business on ethics and quality service. Many people understand the difference between a fancy restaurant and Burger King. They choose the finer dining experience because they want to be pampered, and like to get exceptional service. Sell exceptional client service.

Deliver top shelf service and your reputation will precede you. Refer all the price shoppers to the new in the business inspectors... all we hear lately is how unhappy people were with their last inspector, compared to us.

Frankly, you need to make a living in this business or it's just not worth it. Figure out what you are worth and charge accordingly...but don't forget to build in profit, continuing ed., vacations, retirement, and putting your kids through college... these are a reality for most of us and if it's not planned into your fees...it won't be there.

"Does anyone have a set phone script they use when someone says the city inspector will inspect for free/cheap? I'd appreciate one."

Barb, I don't have a script but I do have a few choice one-liners I like to throw at these callers:

- "Sure, I'll meet that price. What would you like me to leave out of the inspection? Roof? Heating? Structure? Electrical?"

- "The other inspection company must know what they are worth".

- "Sure, I'll meet that price. I'll run through the inspection in about an hour or so, likely miss some things, and answer few of your questions because I have to run out the door to make my next appointment as I've overbooked my day to make up for the low fee I am charging".

- "How much are you paying for the house? $300,000? C'mon. You're not buying a bicycle. You're buying a house."

I am amazed at the number of times somebody will call me back after our intial phone contact, tell me that they feel most comfortable choosing me because I took the time to talk with them and explain things in detail about what I do during the inspection and what to expect, and then turn around and say they found somebody cheaper. DO YOU HEAR YOURSELF???????? Some of the replies I give to repeated requests for the same caller for discounts are admittedly smart-ass replies but sometimes I just don't care. I've gone as far as giving details about my business expenses, E&O, tax burden, etc. to the bulldog callers who won't let it rest. It doesn't always work but it lets me blow some steam off. I should just let them go and not waste my breath. I don't want to work for people who have no respect for my right to make a living. Some people couldn't care less if you make no money or lose money on a job. They just want a deal and they don't care squat about you.

When I find out I'm not the most "expensive" in town, I raise my prices again. So far (working on ten years) it's been a successful strategy. Each year I do fewer jobs but make more money.

Sometimes we spend so much time and money marketing that we tend to forget that it is a very personal business. Marketing helps the phone ring Selling books jobs. I suggest that you give yourself an honest evaluation regarding how you interact with Clients on the phone. Sometimes it is what we don't ask that causes us to lose jobs.

Don't be afraid to ask for permission to use former Clients as a reference. I have several that I provide the emails to prospects. The former Clients will frequently toot your horn more loudly that you may be comfortable doing yourself.

In my case, when Realtor calls and I don't have an established history with that agent, I make the assumption that they are price shopping, so I ask right away. If the answer is yes then I let them know that I will always be among the highest prices they will get. BUT, I will usually ask them if they know so-and-so Realtor (always high producers) and suggest that they call that person and ask about my Client services.

It sounds like you are making efforts to be a quality Inspector. Just accept that most Realtors won't be able to say your name without an adjective attached. Don't worry about it. Believe it or not having Realtors bad mouth you because you're too picky can be a real boon to your business. I can't tell you how many jobs I've booked because some Realtor bad mouthed me or left me off a list.

Keep the faith. YOu'll do fine.

Just testing.

There are some things we type here which are automatically linked to something else. Brian's way of getting a click thru fee I guess. I've noticed it, and I personally do not think it is right, but that's what Brian has set up.

We are not (*I* am not) endorsing those links.

Here is one:

inspection report (will most likely pick up an automatic link) - added with edit - IT SURE DID!

Here is another one:

Insurance (will most likely pick up a different automatic link). - added with edit - IT SURE DID!

I have no idea how many or which words are automatically linked that way.

It seems this issue will never go away, even through government regulation. There will always be some that have no scruples and who will take advantage of any circumstance. That leaves the rest of us to set a better example, and conduct business with honesty and integrity.

Brian: Do NOT worry...the price shoppers are just that, shopping. I have found people that ask "How Much Do You Charge" are just trying to begin a conversation. Don't talk price, ask them about the house to be inspected, ask questions that make you interesed. These are people that are "searching". Price is only a begining conversation. I always tell these people what they get for my price, then how soon they can get results and follow up. The ones that say "I can get an inspection for $175.00" I say go ahead, if you want a $175.00 inspection. I have raised my prices twice with my performance and reputation. And by the way, our inspections take 3+ hours on site and 2 hrs report prep. Your rep is hard to build and sooooo easy to destroy. Keep your head up!

Peter J Ruddick

I had a different experience, a potential customer called for an inspectionand wanted a price, I quoted what I usually get, I am usually $25-$45 higher than my local competition, (let him have the cheapskates)

I turn out a reasonable report and am constantly looking for ways to improve. This board has been and is wonderful.

When I called the lady to confirm a time she told me she went with an out-of town company, They are part of a marketing group using a particular software that is highly advertised. I do not know what the company charged but they drove 60 miles one way to do the inspection, the guy must have been real good the inspection was scheduled at 9:30 and I had business down the street from the house and by 10:45 he was gone. Higher priced and faster mmm. I must be doing something wrong.

The lady said they went with this company because they posted on the web. I will e-mail, snail mail, or hand deliver.

Thanks for the VENT
Also I read every post and learn soo much on a daily basis that I can honestly say that the time I spend here is very beneficial

Willie

Brian,

GO FISHING. Don't sweat the small stuff.

You won't do every inspection, and your gonna lose some of the ones you book sometimes.

Heck you might even show up on an inspection and find another inspector there that was called too. Happened to me today.

He'd beat me out on the inspection by 25.00

After seeing the HUD / VA sign in the window, I decided to let him have it.

I got an e-mail last weekend from a sister of a previous client. She mentioned that her brother raved about the inspection and the report.

After a couple e-mails getting details (Her phone went to voice mail when I called her) she finally told me that her realtoid had already set it up with "her" inspector.

I just have to shake my head over that stuff.
JF

The buyer (which is a broker representing herself in this real estate transaction) called us up the day before the home inspection to warn us that the seller's Realtor was pushing his home inspector. When they informed him that they already set it up with us, he wanted our phone number. When I got there, the seller's Realtor ended up letting us in the house and stayed for the whole inspection. The seller's Realtor made a comment that he has been in realty for 19 years and he has never hear of us. Then when I was going over the contract with the buyers, I came to the arbitration part of the contract (wording provided by Allen Insurance)and the seller's Realtor flipped out for about 30 seconds (couldn't believe we had an arbitration clause) before stomping off to the other part of the house. The seller's Realtor stayed there the entire time while talking to the buyers at different times during the home inspection.

On Monday, I called the realty organization the seller's Realtor belongs to and asked for a copy of the Realtor's Code of Ethics. To pursue his unprofessional actions through his organization, he had to violate the code of ethics. Guess what? There is nothing written saying what he did violated any code of ethics.

I cannot wait until I get a call to do an inspection for one of his cleints. I'm going to insist for the Realtor not to be there before or during the inspection. Any questions about the inspection report will have to be though them (the buyers). And inform the buyers that we are not responsible for any guidans your Realtor gives you!

"The seller's Realtor made a comment that he has been in realty for 19 years and he has never hear of us."

Kevin, when I get this stupid comment, my response to the realtor is....."Well then you and I have something in common. I've never heard of you either".

Thats a great line Nick. Can't wait to use it if I may be so bold to borrow it from you in your great wisdom.

Rick

"The seller's Realtor made a comment that he has been in realty for 19 years and he has never hear of us."
.................................................. ...............................................
"I'm sorry, sir. That's totally my fault. I've been so busy with inspections for the last ten years that I barely have time to stop in to the larger firms, much less the smaller ones. If you'll give me your card I'll stop in the first chance I get. Please accept my apology."

Thom,

That is an excellent mock(ery)!

Originally Posted by Brian E Kelly

I just lost two jobs in the last 2 weeks to price. Both were from the same real estate office. I am new to the profession as I am only opperating on my 9th month in business. I have set my rates as to where I feel I need to be and still give my customers a good report. I have figured out how many housr it takes me to do a standard inspection and then applied it to my rate I need to live. I know that I am not the lowest price HI in my area and I don't want to be. I beleive that I give my customers a better product than what most HI's in my area are doing and have been doing. I have seen their reports and talked to different HI"s customers, so I know that I am giveing them a beter product. I have been raised in the business world that the lowest price is not always the best deal as you get what you pay for. I had reciently had a consversation with a business freind and he suggested that I am to through in my job. That made do some long and hard thinking and I have came to that conclusion that that is not so and that I am being paid to do the best job necessary for my customers. I guess my biggest delemia is that I need to rely on the realitors still untill I build my business and I need to figure out a way to deal with this and to convey to the realitors that price is not always in the best interest of the customer. I guess I am looking for some other ways to aproach this issue and still get what I need to make on a job. Waiting to hear from you.
Thanks

Here is what I tell prospects shopping around for price:

"Home inspectors know the value of their service and charge accordingly.
If you find an inspector whose fees are higher than mind,
you should consider using that inspector."

Originally Posted by Dennis R

Here is what I tell prospects shopping around for price:

"Home inspectors know the value of their service and charge accordingly.
If you find an inspector whose fees are higher than mind,
you should consider using that inspector."

The only thing I would add to that is"And please let me know so that I can raise my prices."

Originally Posted by Thom Walker

When I find out I'm not the most "expensive" in town, I raise my prices again. So far (working on ten years) it's been a successful strategy. Each year I do fewer jobs but make more money.

Bingo!
Of course you better be able to deliver the goods on the day of the inspection.

Originally Posted by Vince Santos

Bingo!
Of course you better be able to deliver the goods on the day of the inspection.

AND, you have to be willing to lose a lot of work to lower priced inspectors. The positive side to charging what you're worth is that you never hate the job you are on.
JP spoke on another link about pricing based on sales price vs hourly. I take his point, but for now, it works better for me to base on hourly. Maybe I'm fooling myself, but I feel like I'm reducing my liability while making more money when I take fewer jobs at a higher price.
What do you guys do with the time you're off because you take fewer jobs? I fill my time with irrational worry.

Originally Posted by Thom Walker

AND, you have to be willing to lose a lot of work to lower priced inspectors. The positive side to charging what you're worth is that you never hate the job you are on.
JP spoke on another link about pricing based on sales price vs hourly. I take his point, but for now, it works better for me to base on hourly. Maybe I'm fooling myself, but I feel like I'm reducing my liability while making more money when I take fewer jobs at a higher price.
What do you guys do with the time you're off because you take fewer jobs? I fill my time with irrational worry.

When you get down to 100 per year (2 per week average), start working toward 50 per year (1 per week average).

I averaged about 50-75 per year the last 3-4 years before I retired, and made more each of those years than in previous years.

"but I feel like I'm reducing my liability "

You are. Instead of driving to 10 places each week, you have limited your liability to 2 places each week.

"pricing based on sales price vs hourly"

Doing the above, reducing your number of inspections, has nothing to do with how many you do each day or week. "Hourly" just means you have to raise your prices to make more. "Based on sales price" just means you have to adjust that to equate to your hourly rate, then, as prices appreciate (and, over the long run, prices do rise) your fee will increase along with the increase in prices - all without "raising" your price.

The catch is, you may find yourself doing 'special' inspections, not just "home inspections", and, I found that "hourly" was the best way to price those. If most of you business is just "home inspections", then 'based on sales price' works well. You could use both, depending on what you did, but I found that I gravitated to just staying with hourly as that allowed me the flexibility to do what my clients wanted, such as those sit downs with the builders and other things like that which would otherwise be difficult to price.

'You want me where for how long?'

'No problem.'

Like Friday and yesterday, I drove to Miami (a 5 hour drive) to meet with a client at his development on Friday and to meet with his attorney on Tuesday.

Drive time = 5 +5 +5 +5
Time on site = 3 + 3
Time back at office = 3 + 3
Billable time = 32 hours
Rate = $150 per hour
That's $4,800. For 2 days work.

(Of course, with the engineering company I am working for, *I* am only getting my salary. But that's how I used to do it for myself too. )

Richard, … You have a great sense of humor – lol. Okay, not trying to deviate from the topic here (too much), but here’s a test for you HI’s, … especially the newer ones. Let’s test your sense of observation and see how many discrepancies (changes) you can find from the original picture. Once you’re done, write it up and send it to that sales agent who’s shopping around for the cheapest inspector. Hmm, what category would this fall under ?

Robert,
8 items changed/moved. 9 if you count the hair, very distracting, wife just couldn't believe I was taking a test or that I had two hours to complete it!

Something a speaker said at a national HI convention last year has really stuck in my head. He said that consumers view all HI's as the same. When they need an inspection they need an inspection. To them each one is as good or bad as another. So, of course, they price shop. Because, why pay more for something if you don't have to. Of course, their methodology is totally flawed but there's little we can do about that.

When you're talking to potential business it's important to look at it from their point of view. Educate them as to why it's a bad idea to price shop, give them some of your credentials, etc. Tell them why you are better than the new cheap guys. If you've been doing inspections for a long time give them some numbers. If that doesn't play towards your favor try to talk about something that does.

And realize you're not going to catch them all.... just try to get the biggest 'net' you can.