Mike,
I hear the same thing, when the agents hears how long I need to complete the inspection (2-3 hours), they just shake their heads.
Spencer
BIG problem in Florida. This state is crawling with buck-fifty guys that spend about 90 minutes walking around then put out a checklist-only report with as few comments as possible. Realtors love 'em and promote what a good deal they are. It’s making a joke out of the industry down here. I have honed my “quality pitch” and deliver to every price shopper on the phone, then send an email with a sample report and ask the prospective client to judge for themselves. But since they can’t look at the cheap checklist report some assume we are still all the same and go cheap. For many realtors in this tight housing market, no news is good news and the client doesn’t know the difference, so book that joke and pocket your commission.
Q. Hello Mr. Wand I am interested in a home inspection. What is your fee?
A. My fee is based on square footage, my fee is $400 based on upto 2K sq. feet. Each additional 1k sq. feet is billed at $55.
Q. Mr. Wand your competitor charges $25 less. Will you match his price?
A. No. I do not lower my prices. Thank you for calling, but if you can get it for $25 I suggest you book with my competitor.
I have always laughed at the inspector that charges $350 to inspect a 1500 sq ft home. In my market (south Florida) where 99.9% of all construction is slab on grade, CBS…for the most part the inspection is a no-brainer. Therefore, is an inspector aiding the buyer by charging such an outragious fee? I think not. On the other hand, I like to see those prices, it feeds my business.
The Pillar to Post, Housemasters of the world with their franchise fees, and $20 binders…well that’s why they’re always for sale. Not to say they don’t provide good service, I’m sure they do.
Price point is important in any market and any business. And yes, RE agents do think that getting an inspection for $50 cheaper is an example of their “negotiating skill.” I tend to laugh when they try to talk me down. And my price points are very competitive.
Re-inforce your qualifications, approach to the business and sound track record within the industry. Point out the competition is charging less because they have too. You have established relationships witin the market, secured a continual business flow and do not need to negotiate fees.
They’ll be calling you back.
David, you and I seem to be of like mind in our approach to this business - glad to see you posting here.
I think telling newbies to set a high price and “don’t start your truck for less than XXX” does them a disservice. Consumers - and especially real estate pros - can tell when they are speaking to a newer inspector on the phone, no matter how well rehearsed your pitch. Setting high prices may make you seem like less of a newbie on the surface, but when there is no experience behind it to justify the price, you end up losing out.
I maintain that there a a vast amount of price shoppers out there (as there are for every product or service) and the fastest way to get up and running and grow your business is to set an aggressive price and appeal to their (already identified) motivation: PRICE.
If you wish to raise prices later, great! If you wish to add a second tier of inspection at a higher price, offer more in the way of service - brilliant! But to ignore the vast percentage of consumers while starting a business is to cut your nose off to spite your face.
Remember each client is a potential referral, and each job brings you into contact with at least 3, usually 4 potential referral sources (buyer, seller, and Realtors/lawyers).
There is no magic price point - it all depends on your expenses, your desired income, and the surrounding market.
Remember each client is a potential referral, and each job brings you into contact with at least 3, usually 4 potential referral sources (buyer, seller, and Realtors/lawyers).
Well said.
I just had a Realtor complain that my price was almost as high as House Master… $480.00 for a 2300 sqr. foot New Englander with a three car garage.
Congratulations! 
Sorry for joining in on this conversation so late, boys. It took me a while to read through some of the threads where NACHI members were seeking the cheapest vendor for a “MIC” yard sign, cheapest vendor for E & O insurance, and seeking “free” continuing education instead of having to pay for it by attending seminars.
Now…about our fees…
In St. Louis, ASHI and the NAR are butt buddies…and you have to keep your fees below $250 to get a RE salesman to refer you…ASHI or not. Thus, some ASHI inspectors compete against others by offering $150 home inspections. My response to clients who ask is to illustrate to them what the lower fees represent…an obligation to the salesman who refers them … along with the assurance that these guys are worth their low fees, and not a penny more.
Thanks James.
Many times the cheapest becomes expensive in many things not just Home Inspections.
I use this in our Customer letter. It isn’t original but sums up the situation nicely.
“The bitterness of poor quality lingers long after the sweetness of a low price.”
Your right, not all inspectors with a high price are good inspectors.
There are two sets of consumers out there. Some want low prices and some
want quality and expect to pay more for it. The ones looking for quality
are suspicious of low prices.
You can market to either breed and you will get paid accordingly. I will
not deny that there is indeed a market for price shoppers. I just don’t
market to them.
I have found this same pattern in my other businesses as well.
The vast majority of inspector go out of business because the market
place is saturated with low priced inspectors trying to compete for
the same peanuts.
Well said John,
You can fight over the scraps or you can you can eat at the head table. I was pricing slightly higher than my lowest competitor when I first started and have slowy raised my price over the last couple of years. I recently raised my pricing again and I’m now in line with the top 5 companies in my area and have never been busier. 
In fact I am even taking business away from some of them. So the way I see it is that, while you may get a few price shoppers at low prices, in the long run it’s your knowledge and reputation that will get you more inspections and your price should reflect that.
William, As someone already posted, we cannot price fix.
However it is not his royalties. I pay royalties and far exceed every month what they require.
The other week I lost one … 6500 square foot main floor business with two aprtments above it. I gave him a quote of $650. The client advised me of the inspectors name that told him, he would do it for $200. I told him this was the price of a desperate person and that I knew that person and know he is not a qualified inspector. I then gave him the name of another inspector to call for a real price. I talked later to the other inspector and he told me he had quoted $650 plus GST.
I never tell the client to go to the cheaper inspector… I just tell them they need a good inspector… not a person with a cheap reputation and my reputation is “thorough” I will not entertain the word cheap associated with me.
One guy in my area advertises he does inspections for $199… when people or realtors ask me if I will match him, I say no… he is overpriced.
Mark Diplock… about your comment on answering service… I have a message that starts… Congratulations! You have reached my voice mail… please feel free to remind me to give you $25 off your inspection… that ususally gets me a message left.
Everybody is low balling these days. I just lost an inspection. 1950 home, 1400 sq ft. with a pool, seawall and dock, and a wind mitigation insepction. My price was around $700.00. The bid he took was $450.00.
He also wanted air quality. I origianally told him $225.00 if I do the inspection. He called me back and tried to get me to do it for that price. He was disappointed when I told him that was the price with the inspecton. I told him I would do it for $350.00 (his next lowest price was $450.00) but all I would do is air quality and not a complete mold inspection. Never heard back from him.
I think that this has been debated or discussed many times through the years. Seems to each their own, everyone has a method to arrive at what price they feel they should charge for a inspection.
Bottom line I do not worry about what others are charging nor worry about who is charging the least. It may be different in other markets.
Maybe this company will not be around long term and your right most will not be but if you stay steadfast in what you feel you need to charge in order to stay in business, then you will be around long term.
I guess it is nice to vent every once in awhile though…
Ray
http://www.choosesuperiorinspection.com
Home Inspectors Oakwood, Georgia Cumming, Georgia
We now have a new company here doing 4 points for $75.00 and yes they are NACHI members
Ya mean $69.00
Oh, hell folks the Realestate market is crashing. So what, add 5% to your fee and see what happens.
If you allow yourself to buck down to the market then what do you look like?
You must charge!!! what it cost you in real $ + profit…
If thats 379.00 as in my area then you must charge that much.
Truth is folks that as the Realestate market crashes the only HI’s that will be left are the ones that wright hard , but carry soft words, kind of hard to explain, but the facts are that you do your job to the best of your ability and do not make a foundation crack into a structural prob"if it’s minor and within spects"
Seems simple, but in my area lot’s of HI’s have crashed… Myself included, but for different reasons.
I wish you all the best in these trying times…:mrgreen:
Thank you, Todd.
If you keep worrying about what the market does, or what your competitors do, or what anyone else thinks, chances are good you’ll be either over- or under-pricing. A better strategy (for any business, not just H.I.'s) is to price according to what you know…that is:
1.) Know what your fixed costs are.
2.) Do the best you can to stay on top-of and know your variable costs.
3.) Do the best you can to understand your tax liability, given any specific amount of income projected.
When you have these items locked-down as closely as possible, THEN you can set a profit target. Once that’s done, your inspection price becomes a lot less mysterious (to you). The amount of revenue you have to charge beyond #1, #2 & #3 to reach your profit “goal” can certainly be variable, and probably will be given the less important issues of what your market does, your competitors do, etc., but you’ll NEVER lose money.