Really. What can home inspectors do to make a lot more money?
Increase Inspection Fees…
A New Spring… A New Year…
Or decrease it. If you charge 25% less and it brings you 100% more business; twice as many people to send you referrals… I guess the hard part is find the sweet spot where you don’t charge too low and still get more business. Don’t want to be classified as cheap or expensive but professional and affordable.
Since money you save is money you make, working even harder in lowering overheads like insurance would increase profitability. InterNachi has been doing an awesome job in helping lower overhead and saving money on services. Maybe Nachi could start it’s own insurance division.
I’m not too sure what % of real estate transactions include a home inspection but increasing this % should be a priority. Nachi TV/YouTube commercials alerting consumers about the importance of getting a home inspection would be gold.
Nachi building relationships with sites like Trulia.com in the US or Zoocasa.com in Canada to promote home inspections on their site or when promoting their services to real estate sellers/buyers would be the beginning of something big.
Possibilities are endless,
If I increase my speed on site ] .
3 hours average home ]
I can increase my report writing speed… use speech recognition software ] Use mobile based software ] reduce superfluous comments ] Inspect fewer components ] [stick to check list ] fewer pictures ]
I can add aux services .
radon ] Mold ] Lead testing ] add IR services and charge extra for them which most do not]
I can cater to high end investors which may want detailed information on cost estimates of repairs and recommendations which go beyond SOP .
I can sell other services such as alarms,insurance,etc because my foot is in the door.
I can use my savings to invest in buying real estate because I am more knowledgeable than most and make more profit flipping than those I am inspecting for.
I can become a multi inspector firm and hire newbies or those with less ambition.
I can branch out into services that teach or help other inspectors thus becoming a vendor.
I can start a Home Inspector association…
Your Post displays a lack of knowledge of your target market as posted…
Depressing the Value of your service to unilaterally capture more of the Real Estate Market is short sighted …
Been there & advised (but never followed)
The number of Home Sales each Year, is Finite…
If you think you can achieve Higher Revenue by Reducing Prices,
Sorry to disrupt your opinion… as I disagree…
feel free to tell me where I am Wrong…
Increasing your profit by decreasing your prices is the most blind and selfish way to attempt to make more profit. It hurts the industry as a whole. It may work for you for you for one year. And yeah, you may be able to steal some business solely because you are cheaper, but that will only happen for so long. Once others start losing out on work because of it, they’ll inevitably have to lower their prices as well to attempt to salvage work, then guess what… you’re still all doing the someone amount of work as last year, but for a lower price. Next thing you know, some other genius will come in with the same business plan the next year and drive it down even more.
In the area that I live in theres a perfect example. Plumbers are rich (middle class rich anyway) and carpenters are poor. Every plumber charges the same rate, there are no “bargain plumbers” and builders generally don’t even bother pricing around with different plumbers because the prices always come in so eerily close to each other. Lets face it, it’s plumbing, definitely not rocket science, but they’re all charging $90 an hour (big money for rural area)
Foundations are the same scenario. The foundation guys are constantly checking to see what the other guys are charging SO THEY CAN PUT THEIR PRICES UP TO MATCH THEM!! Thats right, if one guy puts his prices up, everyone else puts theirs up too. The total opposite of David’s recommendation. And guess what, they’re probably the most profitable sub trade on the job site.
Then we have the framers, there is really no set price, it depends on how bad they need to feed their family that week. Builders will lie to them and tell them that another framer offered to do the house for them for $4.25 per sq ft and immediately they will drop their price cause they fear losing the work. People search around for many different framing quotes because the prices often depend on how bad they need work that week. If one guy is charging $5.00, they’ll call till they find someone at least willing to do it for $4.50. Long story short, no one is getting rich doing framing here.
Long story short, as an association I think a structured focus should be put into keeping prices increasing for inspectors. We need all inspectors to be on board with charging the same and competing by offering the best service. We need to all be in agreement that we will not charge less than a fixed rate. If your that poor of an inspector that you don’t deserve the same as the next guy, go work for someone else to get experience until your confident enough that your worth the same as the next guy. I know Nick is talking a lot about it lately, and thats awesome, because once you start decreasing the price of an industry or trade, it doesn’t come back.
Pretend the REA is the one paying the HI fee instead of the client.
Be the top 1%
but that would require actually knowing your job. Also weeding out the incompetence by not getting bailed out by using silly warranty’s or guarantees.
Also having legitimate certifications with actual goals or thresholds to meet, then advertise that these are required.
It may also help if people who lied to obtain logos such as CMI were actually vetted individually. Allowing liars and thiefs to falsely obtain this, actually brings down the value and insults those who truly meet the requirements.
People don’t want competent knowledgeable inspectors though, they just want the warm feeling a certification provides them.
The carpenters and plumbers analogy is perfect and as a carpenter I quickly went from framing or rough carpentry to layout and to finishing, made more money. Went from finishing to being a GC remodeler, made more money.
I became a HI last year and think home inspectors are underpaid as things are but I do see the potential to make more and last night I talked to my wife about marketing as maybe a more expensive inspector who offers IR and written estimates for people who are considering remodeling, which most people do in the first 3 years of buying a new home.
Inspections start at $450 for a 2000 SF home, remodel $200, for a $650 average sale.
Add other services and I see no reason an inspection couldn’t be sold at .25% of home value or some other percentage which I haven’t worked out but I am playing with it to see if I can sell at a percentage of value.
$300,000 home is $750, cheap compared to what a realtor gets for the sale or a lender gets for the loan.
I think it comes down to how you market yourself.
For me the answer might be put some sizzle into the inspection. Thats another area I think the average inspector is lacking. We mostly offer pretty much the same things in the same way, how to make yourself standout is the challenge I see and getting away from realtor refferals is the other challenge because the realtors I know would steer people away from you if your pricing were on the higher end.
Contractors have the same problem and make the same mistake as home inspectors, we all sell on platitudes.
Inspect once- Inspect right
Basement to roof
Biggest purchase you will make
Safe and healthy and on and on.
Platitudes and cliches, perhaps true but old and worn out.
Invest your money in diversified areas. Raising prices doesn’t guarantee more money. If you are working less, you are not making more. We have a restoration business as well. Mold remediation, cleaning, carpet cleaning, home deodorizing, residential and commercial drying. The next venture will be acquiring properties. Read a piece on the wealthiest people in America yesterday and it basically stated that most of their wealth is not cash but in assets. Property is a great way to go. Rentals. They aren’t making more land and people need places to live. As we all know, real estate gains in value if you choose wisely and sell wisely.
We cut some expenses and offer more services. I rebid my insurance and got more coverage at a better price.
I also increased my marketing to get more inspection and added services to increase revenue.
Decreasing is a dangerous and slippery slope. Better to keep it high and offer discount coupons to Realtors or buyers as an incentive I think. Better to keep pricing on high side of average for most, keep impression you are better than the others to newcomers.
Actually not a bad idea. Except insurance business is likely very regulated and very hard to get into.
Not sure about these … but may be a good idea.
Apples and oranges, just about everywhere plumbers have to complete a four or more year apprenticeship and be licensed or ticketed. Whereas anyone with a hammer and pickup truck can call themselves a carpenter and get away with it.
A good qualified carpenter can make just as much money or more as a plumber.
Another thing the plumber has going for him or her is that when the toilet backs up or the water line springs a leak people don’t argue about prices. There aren’t so many emergencies that require a carpenter
One of the things I like to say is that plumbers are probably more responsible for our 21st century extended lifespans than doctors. One of the main reasons so many people died young in the past (and still do in other parts of the world) are water borne diseases, which have been eliminated through the provision of clean water and sewage treatment. As far as I am concerned most doctors are fraudulent quacks shilling for the drug industry, but that’s just me.
The coupons are what baffles me if you want to treat like a professional. I would not hire a doctor or an engineer if they was offering coupons. When you offer a coupon for your services, you are saying to everyone that you are a commodity, not a professional.
The two ideas that immediately come to mind are to get your former happy clients to recommend you more, and to offer… and most importantly… sell additional ancillary inspections with every home inspection for additional fees.
Now those two I like!! Although, I have yet to see a drop in customers with a price increase… most expect prices to rise on everything on regular basis… it is part of the normal economy.
You have it in a nut shell I have been preaching to my son do more charge more as a business plan. We already do Radon, Mold, and IR. I am going to convince Charley Bottger JR (Lee) that when he fills my shoes he should add Termite inspections and buy a sewer camera. HI’s should strive to average at least a $1000.00 or more per inspection and the only way to do that is with add on;-)
I have never seen a drop in customers every time I increase my prices.
Also learning how to extend the busy season into the slow season is something that really helped me out. I am usually the first to pick up and the last one to slow down in my area. Even during the holiday season, I have been rushing to get everybody done before the end of the year.
I don’t do it, just saying better than a lower pricing strategy. Whatever one does, do not lower price!! And if somebody does use coupons, they should be a time constraint, with expiry date. But you are correct, it does make it look more like a commodity than a professional service … so maybe not a great idea… but then neither is lowering price!!
I hate ‘upselling’ when it used to lure customers. As a consumer my immediate reaction to it is “Up yours’ I will only pay the price you quoted me when you told me how much.”.
But if a person is totally up front about it, like say the car wash is when they price their wash features from a basic rinse only to the full boat wash wax and hand dry, it could be good.