Hello everyone, I am in the process of starting a home inspector business on my own, what would be the best way to figure out how to price your services? Would other inspectors mind you calling to find out what they charge? Thank you all in advance for your input.
v/r
Manuel
The first step is figuring out what YOU need to charge. How many inspections do you realistically think you will perform the first year? Take your total operating costs and what profit you need to make for the year and divide by that.
Lots of threads on this topic. Use the search function at the top of the page and type “pricing services”.
Depends on your RE market too. I’m keeping the same prices I’ve always had. Getting out bid by lowers prices all the time. Cheap price or a better inspection, “you can always get your car painted cheaper by an ‘Earl Scheib’ paint job”…
You have not adjusted your prices as you know what it takes to survive when things slow down. There’s a reason why the average home inspector lasts less than two years. It really goes for most any business. They only think about pricing in the short term. So they call around and check on what everyone else is charging. Company A is charging a $300.00 flat rate for any sized home. Companies B & C are charge $300.00 for up to 2,000 sq feet. Companies D & E are charging $325.00 for up to 2,000. OK I’m going to undercut everyone price and have a flat rate price of $250.00. So, you cash flow during the busy months. The market slows down in the fall and winter, but your operating costs and money needed to survive stay the same. All of a sudden pricing to undercut the established companies does not seem like such a good idea.
This is also the reason why pricing has stayed stagnant for years.
Ones that need to survive, should do this. I don’t need to “survive” on my HI business
Probably, but you don’t tell them you are a competitor checking prices. For the most part, you don’t even need to call. Look around for some local inspectors that offer up their pricing on their website or have an online booking feature.
For the most part, for a stand-alone home inspection on a typical 2000 sq ft home built in the last few decades, the price will be right around $400-$500, give or take, depending on region somewhat.
Hi Manual
Im also starting new. Im in MD and looking around too. Im finding highs and lows. Something to concider is what you offer?. Im going 450, but including IR, adding 50 and 30 min after 1800 sq ft for every 500 sqft after. I’ll Change it if needed later.
Good Luck Brother!
NACHI Fee Calculator Use it exclusively. Your fees will remain consistent. If you are making too much money, or not making enough, it’s easy to adjust your fee inputs.
What’s your background? Construction moving into HI. Excellent knowledge of home systems from your past work history. Newly trained entering from a somewhat related or unrelated field?
The more valuable your background and knowledge, the more you can charge. I have a strong construction and building science background. I’m not cheap and I’m happy with the amount of work I get.
The first thing you should do is figure out how much your overhead is going to cost you for the year. Things like, insurance, association fees, licensing fees, accounting fees, taxes, and other business related fees. Then, how much do you need as a salary to cover the cost of your family.
Take those numbers together and divide it by a realistic number of inspection you expect to perform in a year. That will give you a starting point .
I looked at other home inspection businesses in my area to get a baseline fee. Take your time and look at home inspection businesses online in your area.
Hope that helps.
Don’t ever do this, it is a recipe for failure!
You do understand that most others posting their fees online are also starving and lowballing their fees to stay alive, right?
So why would you use the fees of other failing inspectors to set your own fees?
The moment you begin charging a fee even $1 less than your expenses, you are on the road to going out of business!
Be a Businessman, NOT a Hobbyist!
(Been nice knowing ya)!!
I keep raising prices just to keep up with inflation and my ever-increasing experience and skills. Profits go up. Work less.
It’s ok if you loose some of the bids. You don’t want those jobs.
( unless you are new and you need the work . I get it. I’ve been there)
Instead of pricing only on the size of a property, you may consider other variables in your pricing to more accurately reflect the time and costs you will give to the job.
**Home Details**
Size = Area in ft²
Age = how old in years
Dist = Drive Distance one-way to the job from home or office
Crawl = Crawlspace
Outbuilding
Inlaw suite
**Ancillary Services**
Mold
Radon
Water Quality
Termite
3-D tour
Drone Photos
**Correction factors**
Neighborhood Crime
Condition
Hero = Veteran, police, Firefighter, grade school teacher
One way to go about it would be to have a base price for a brand new 1000 sqft home across the street on a slab foundation. vacant. Utilities on, the door will be unlocked and there is no time limit. Then add cost for every detail that will add to your time or resources you will allocate to the job.
for example:
base $350
+10 cents per ft² over 1000 ft²
+$1 per year of age
+$2 per mile
+75 for a crawlspace
+$50 if there is an in-law suite in the basement
+$50 for an outbuilding
+$50 if the outbuilding has plumbing (like a bathroom)
+$50 if the outbuilding has any HVAC equipment
+extra services
multiply by correction factors. Hero discount 5-10%. High crime or poor neighborhoods surcharge 10-50%.
if the sales price is lower that similar houses close by … moneypit surcharge 10-50%
its harder to do a quote in your head, but you can more accurately quote the job.
When you are just starting out, you will over bid and under bid and you will learn from it. Eventually you will have a system that reflects your own values and needs. If you are competitive you may survive. If you are overpriced you may not work often. If you undercharge you will be under-paid.
A wise man once stated on these very message board(s)…
I truly do not understand how you pick my posts to use as a definitive answer.
I truly hope the OP stays far away from your posts on this topic.
I low balled to get work. Who cares about the first 10 or 15 inspections. I wanted to get my feet wet! Then I could prove abilities and put in time on site and reporting.
Gradually, I let my work set the tone for my fees gradually. We learn to adjust our fees.
In my neck of the woods, pricing on websites runs a wide variety of home inspection pricing scales. Including a walk around, and verbal report is $1000. Add a written report $1,500.00 plus. Another $2,500.00. On average, $595.00.00 for a 2.5 story home. All plan to see on competition websites.
You have to start somewhere and get your feet wet while doing it.
Hi Manuel.
None of the advice here is truly right or wrong. Profit will be a combination of price and volume vs expenses.
Let’s consider a restaurant. It does not matter how much profit is on each plate if my restaurant is empty. Conversely, when my restaurant is full and my margins are too low, I will lose money.
So, the first thing I would do is determine my fixed expenses. Then a realistic price/volume combination projection and look at the profit. Remember, your salary is not profit. Profit is over and above salary. Be profitable! Best of luck!
I am trying to follow along. You may consider revising these numbers. There are so many zero’s! 
Canadian money!
