Got low balled by House Master again

The House Master franchise in my area must be getting hungry, they have cut their prices from previous years. They beat my price every time. They just quoted a price for a whole home and termite inspections for just $295.00 . Is things going that bad for House Master franchise owners? Is anybody else cutting their prices? Or things really getting that bad?
I am still in the works of raising my prices. My home inspections or way different than House Masters, so the market should justify my price raise except for price shoppers of course.

unfortunatly for this inspector he is required to make payments royaltys each month and if he is forced to reduce his price he is surviving at best on minimal , this will end up putting him out of business as the constant drop in price will lock him in and he may never recover, better to stand fast and " force " the public to pay up what is truly fair price.
If we all stood fast in the price and said nothing under 300.00 the public would pay or for go the inspection and then the realestate agents would bear the burden of any and all problems.
unions do this all the time and they seem to stay in place.
as HI we need to honor this and work together and with our compitition in the setting of prices, in the long run we will all benefit. better to loose one sale then pull the bottom out of your market

my 2 cents worth
Billy

It sucks getting lowballed. But in the end, an open and free market will prevail.

What you are suggesting is called “Price Fixing” and, at least in the US, could easily be interpreted as collusion, and might likely be considered illegal. (I am not a lawyer, nor do I play one on TV. Just a well educated citizen.)

I am surrounded by inspector who do home and termite inspections for
$175 - $250 everyday. I live in a rural town of 7500 people and have to
drive an average of 80 miles for each inspection.

Your web page and phone presentation has got to educate people
why you do more, take longer, have more experience, produce a
better report, do not work for anyone else, care about the client,
and have better tools and technology than the competition in order to
charge more.

Just had two inspection ordered for this week for $1100. My
competitors will have to book approx. 5-6 inspection for
every two that I do (plus all the gas I save adds up to a lot
of money out here). They are going out of business and I
keep paying the bills, even when I have a slow week.

To benefit from higher prices higher improve your web page,
phone presentation, marketing efforts, and technology.
Offer more value, benefits and service to make it worth it.
If you believe you are the best, others will believe it.

But each person must set their own price level and
I do not endorse price fixing (disclaimer).

I hope this helps.

Absolutely agree (shocking I know). John is hitting it on the head. Marketers will tell you that a customer will price shop if they think the products are a commodity, no perceived value difference. However, if they are educated as to why your product is better then that offered by your competition, then they will switch to comparison offer shopping.

If you look at John’s website, you will see he offers many things which are major differentiators between his product and that of other HIs in his area. Thermal Imaging, etc. Those are far easier to sell as differentiators, but you can also offer other things that would set your product apart.

When I first started, I found out that none of the inspectors here in town would do crawls. I told everyone I came into contact with that I went in every attic and every crawlspace that I could fit my skinny little butt into. I also made sure they knew I walked on the roofs, etc. Word got around (fast), that this new guy was doing more, I was then able to raise my rates over those of my competition’s rates.

But, I didn’t stop there, because I knew that they would get off their lazy … and start doing real inspections too. So, I did a lot of research into report formats and content. What people liked, disliked, etc. I went thru three revisions of my report format. Now my reporting format almost always gets me kudos from both the client and their realtor (assuming the realtor sees the report which they usually do). I have even gotten calls from the sellers of homes I inspected who said, “We liked your report so much that we want you to inspect the house we are buying.”

Do you have a moisture meter, thermal imaging, circuit tester? Does your competition have these things? Do you do the crawls and they don’t? Do you make a list of appliances, models, etc? What do you do or can you do that your competition doesn’t do. Do you have credentials that your competition doesn’t have?

I’m not saying you need the latest tools, but you do need to offer something that can be perceived as more for you to be able to talk your clients into paying more for your service.

Just finished getting of the phone with a price shopper. The inspection is booked for Tue. afternoon and I am not the cheapest in my area. But I like to think I am one of the best and like to make sure that the price shoppers are aware of this. If you got the client on the phone there is absolutely no reason why you should not be able to close the deal, no matter what you charge. Sell the service, sell yourself, sell your experience, let them know your the best and the low ballers are cheap for a reason. If your not sure how to do this… learn. Take a course, write up a brief phone presentation and memorize it. (that’s what I did). I now usually book 9 out of 10 price shopping calls. :smiley: If I can do it, anyone of you can too. Now I’ll I need is an answering service so I don’t keep missing the calls. Because the othre thing about price shoppers is they don’t often leave messages they just keep calling the next guy.

Good luck.

Wow… good post. Good attitude sells.

Something else that is happening; because of the slow housing sales, many realtors are advising buyers not to get a home inspection, stating that it is not needed or required to go to closing and just another expense they don’t need. Lots of low ballers here too.

We are loaded with them here.

This is not price fixing, can’t see it at all.
Union carpenters make 27.50 - 36.50 depending on experience
any dealership is upwards uf 90.00 per hour ANY DEALERSHIP
painters are 23+ per hour or xxx per sqft

they got orginized and made prices across the board for there labor
HI can do the same and that is kinda what our association is supposed to be doing for us, helping HI’s get setup to be recognized and set out a rate that is good for all. Electricians, plumbers make really bog bucks and we complain but they are professionals, so are we.

This is what InterNACHI should start making as a membership requirement. WE as InterNACHI members should set a basic minimum fee, no matter what the sq.ft. or price of the home. Have this put in the code of ethics. If you get caught charging any less you will be removed as a member and loose all the benefits of being a member. I know some will say ASHI and others will just charge less and steal the jobs. Or maybe they will see the light and ALL inspectors can start raising their fees, so we can get what we deserve.

Price cutters do nothing but hurt our industry.

One of the biggest problems overcoming price shoppers is the public’s general lack of knowledge about what a home inspection is, and what it’s for. Many, if not most, people think of a home inspection as nothing more than another step in the process of buying a home. Some think of it as a just a ‘‘list’’ of things that the inspector has identified as needing repair by the seller, and nothing more.

Every single time I do an inspection, either the buyer, seller, Realtor, etc., is in shock that I take 3 + hours to do the inspection, and even longer to write the report. Why? Again, its because they do not understand what an inspection really is. One reason is that Realtors are either ignorant about home inspections and do not fully inform their clients what the inspection is all about, or they purposely tell their clients that an inspection typically last an hour, all they need to read is the summary and it shouldn’t cost more than $150.00.

Another reason, (among many others) is that there are too many inspectors who are in it only for the money. Money is good, but if you put your clients first and look out for their interests by providing quality inspections worthy of a higher price, the money will follow. Trying to make money by lowering your price, and making it up in volume is not the best way to do it, in my opinion.

Additionally, a national media campaign, including magazines, television and radio spots emphasizing the benefits of an inspection by a certified, licensed, qualified, professional, etc., inspector would help. Other industries do it…so should NACHI, ASHI, NAHI, etc. It’s not difficult, and if done properly, would help change the perception that a home inspector is nothing more than a glorified handyman, to the perceptions that he is a consumer advocate that deserves the pay that comes with this responsibility. Though a national campaign would go a long way to changing this, it is our responsibility to do this everyday at the local level as well. Education about the benefits of a good home inspector whose fee is in line with his professionalism should be our goal every time we meet the public.

I take a differing view. I have employees to keep busy. I know what it take to meet by bottom line and make a healthy income.

I offer a choice for price shoppers that provides them with a comprehensive inspection at a reasonable rate. I offer choices in services, fees and timing. I let the client know that they are the most important element in the inspecton equation and I book about 95% of all calls I get (even the ones who are already booked, but whose info I have).

Reasonable prices are not evil - they are what consumers demand. Someone will provide them - ignore that concept and you are targeting a smaller market than actually exists.

When individual unions negotiate their pay and benefits with their employer that is ok but when a bunch of HIs agree amongst themselves to hold prices high that is anti competitive and price fixing.

Again, I see a lot of price fixing suggestions on this post and that spells trouble.

I constantly monitor my profits and losses and my prices will vary depending on the realestate market conditions and general business. I have been accused of low balling or setting my fees too low but that is the opinion of the losers.

I have a minimum amount that I will not go below and that minimum gets a lot of HIs upset but that is competition, the American way. I provide a good quality service to all my clients and I do make a profit because I manage my overhead and figure out how to advertise on a low budget which all translates in savings to my clients.

One of my competition charges almost twice what I do because he has to pay for the big advertisement programs he has, that is his problem. The point is competition is good if one is not doing it to destroy the competition or working for nothing.

Just curious as to what that min amt might be?

Food For Thought -

Whats really amazing to me, is that we all complain about low-ballers and automatically assume they have no competency or qualifications and also assume that the HIGH Fee’s must bring skill and competence. NOT Always SO!!

In my area, the company with the highest base pricing (nothing less than $425), has the scrimpiest reports (4-5 typed pages) AND their reports leave out probably 30% of the things you and I do. For example they don’t report on doors, windows, driveways, etc. They’ve got sued more than any company I know, yet many lenders and Agents consider them the Cadillac of the industry - Go Figure!!

Sam Walton got to be a very RICH man selling LOW. There are way more people that shop at Walmart or Sam’s than shop at Nieman-Marcus.

Both have a niche that the other can’t fill.

We laugh about low-ballers, BUT look at our own site and you’ll find all kinds of posts about how our members use this or that vendor cause they’re cheaper. How they’re wanting to buy this or that tool and wanting to see if the other guys know where they can get it cheaper. Buy your socket sets from Sears and get a LIFETIME WARRANTY, but it may cost 25% more than at Ace Hardware. To some its worth it - to others its not.

Unfortunately, looking for a low price is the American Way cause its considered by many as “I got a good deal, see how little I paid for it”.

I agree, we need to educate the consumer about just what a Home Inspector is. I know many educated and professional people who have either never heard of a home inspector or they think we are just the code guy looking for the bare minimum with a 30 minute inspection. VERY Few have ever heard of NACHI, including Many real estate agents. Newspaper adds will help a lot, just to put the name out there. It would do a lot more than NACHI TV.

Per Wikipedia
Price fixing is an agreement between business competitors to sell the same product](http://en.wikipedia.org/wiki/Product_(business)) or service at the same price. In general, it is an agreement intended to ultimately push the price of a product as high as possible, leading to profits](http://en.wikipedia.org/wiki/Profit) for all the sellers. Price-fixing can also involve any agreement to fix, peg, discount or stabilize prices. The principal feature is any agreement on price, whether express or implied. For the buyer, meanwhile, the practice results in a phenomenon similar to *price gouging](http://en.wikipedia.org/wiki/Price_gouging).*

IMO the concept of price-fixing would apply if I and the other inspectors IN MY SERVICE AREA got together to raise rates.

But hey since we’re thinking wishfully, can we just all raise our rates to what they charge out in California?:smiley: