Being undercut by $100’s!

Hey everyone,
I’m a new inspector in Southern California and proud new interNACHI certified professional inspector.
I’ve been getting under cut by 1-200$! Is anyone else having this issue!! My base is $375 and I go up from there. I had a potential client tell me today that she was quoted $250 for a 2 story 3,454 home!!! How the heck can anyone do a quality inspection or make any money on that!!
I don’t know what to do!? I’d loose money if I matched that fee. Any advise would be appreciated.! Thank you.

Low overhead? Nothing but time on their hands?

I guess… but with the cost of file in California and the time spent at the inspection and the time spent writing the inspection. There’s no way the client is getting a quality inspection.

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In my opinion, this issue will likely always exist. There are many home inspectors who are retired from another profession and likely collecting a pension or drawing from retirement savings. These inspectors are just looking to subsidize their retirement income and keep themselves active. There are others that do very fast inspections and get through 3 or even 4 per day. These inspectors give a cut-rate inspection at a cut-rate price. There are other inspectors who are trying to get established and will lower their price to get more business, and therefore, hopefully more future referrals where they can gradually raise their prices. You have to have a nice “war chest” for this approach but it can be effective for sure.

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Thanks ruecker.
I just figured that I should hold steady at my fee because of the time I spend. But maybe you’re right… maybe I should start undercutting the undercurrents to get established.

Dan don’t do that. If you do it’s a business practice that will close your doors.

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Thanks Martin!
I really don’t want to, ive just been getting so frustrated with these people charging next to nothing for an inspection!
I try telling the client to make sure they’re insured, make sure they’re qualified to do the job and all the client (who’s buying a million dollar home) sees is the $100-200 difference in price.

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Hold up there, I didn’t say that was the right thing, lol.

My recommendation would be to do some marketing to show potential clients why your service is better than the cut-rate guys. This will take some creativity on your part or you can partner with a marketing firm, but you need to get the word out that your clients will get more value when they choose you.

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Understood Ryan,
Thank you all for the quick responses and advice. It’s really cool of everyone.

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Sell you inspection qualities.
Define your inspection process thoroughly.
Be detailed about your inspection and reporting process.
I am not a typical home inspector providing a typical fast inspection and report by undercutting competitor’s. I detail and outline what I observed during the inspection process. Our clients get a real sense of the true condition of the property.
Those that race to the bottom will not be around long. Trust me. Learn to sell yourself.

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Great advice! Thank you!

That’s the type of client that will complain over minor issues and sue you in a heartbeat

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Tell them to hold onto your info so when the lowball, inexperienced, on-his-way-outta-business inspector screws it up, they know who to call for a proper inspection!!

Or…

When they take him to court, you are available for expert witness testimony!!

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I live in Southern California. Home values are way up. A million dollar home isn’t what it used to be. I did an inspection last week at a 1550 Sq ft home that was sold for $960,000. People are people, the way you treat them will define how they treat you.

One of the first sentences out of my mouth is

“I do not compete with low ballers. I know the value of my time, experience and credentials. Regardless of which home inspector you choose, I recommend price be at the bottom of your consideration”

Then, I say, “If you have a moment, I will happy to help you ask the right questions to properly qualify your home inspector.”

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I love this statement. I’m going to use it tomorrow when I get low balled!

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You really need to take a hard look at your strategy here. A while back, I was privately contacted by one of the wise inspectors on this forum who gave me some great advice. “Don’t make it about the money.”

That was a wake up call of sorts because up until that point, my thoughts when a potential client called usually went to “how can I make my fee look competitive and land this job.” The wise inspector’s advice was to get personal with the client, ask them questions the cheap guys aren’t concerned about, and don’t talk price until you have them solidly in your corner.

This inspector, who is not in my immediate area, had taken a job close to me and was wondering if I had blew it, leading to an inspector from hours away landing the job. In reality, I had never received a call from this particular client, but the advice none the less was spot on. Make an emotional connection with your clients and show them that you truly care about their needs. Many clients are willing to pay a premium price for a premium service!

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You get what you pay for! I ask the client, “Do you want to save money on your home purchase or do you just want to appease the agents?” “You’re going to live with it, they won’t.”

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“Nobody wants a free haircut” was a line I’d use sometimes when I answered my phones years ago.

Don’t worry too much… The weeks on either side of Christmas/New Years are slowest of the year for most of us. In a related story, despite what other inspectors tell you, they aren’t booked out for 3 weeks this time of year!

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Dan, a few things, where are you located? Also your bran spankin new? If you are in Riverside County in Southern California you do know that there are more inspectors in this county than the whole state just about. Sounds like you need to do some more research, get in on an affiliate committee and yes, you have to pamper a realtor or two… In This region there are a few towns where the Realtors have total control over pricing, thats why I travel outside of my area and do an inspection that would pay as much as two inspections in the Realtor controlled area. Worth the drive. Join up with Kiwanis, or Rotary do a little service for your community and whamo, watch the business increase steadily over a year period. It is worth the wait. Do not associate with any Realtor that promotes lower rates. When I started in 1989 most of us inspectors were former framers, licensed contractors and we all had inspection fees basically the same rate. Those days are gone, and the inspector community is not very tight with each other, not like it was back in the day. I suggest sponsoring a bowling tournament for a Realtor Charity or being a visible Affiliate and be vocal ( Be loud Be proud) and I am sure your business will increase as they get used to seeing you.

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