I have a quick question to ask all of you. I would like to hear how all of you all determine a price for your inspections when a potential client calls you. Do you go by age, SQ. FT., price, etc.? I am trying to figure out what suits my business and my area best. Its always nice to hear what the GREATEST ORGANIZATION OF INSPECTORS:nachi: has to say though.
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It does you no good to price your inspections if you dont know what your operating costs are.
There is some truth to what Will Siegel is saying. However, you also need to be competitive with the rest of the marketplace. Pricing yourself too high will possibly lose you business. Pricing yourself too low is loosing income.
Profit only happens when your revenue is higher than your costs. Costs includes your E&O (if you have it, that’s another story), whatever it costs you to produce the report, any marketing expenses, utilities cost, etc.
Too many people in this world think that they should have XXX dollars a year in net income and work their way backwards to figure out how much they should charge. They get a rude awaking to the business side of this business (or any business). They neglect to understand how and what the free marketplace is.
It would be beneficial to know what others in your area charge. You don’t want to be the lowest price (usually), but be reasonable. I have a set price, and I only add-on if the property is 3000 sf, or if it a couple hours away. I don’t charge extra for driving and hour, or so. Yes, I know some add on for drive time, but my experience has been that having some money coming in, is better than none. If you add too much, the client will look elsewhere. I guess it would also depend on how many houses are being inspected in your area (rural vs. big city). IMO.
I find too many people don’t have a clue when it comes to sq footage so I won’t go that way. I price by distance I have to drive, then by the number of bedrooms, baths, basements garage size and so on. I find I’m a bit higher then some but close enough to find work. It’s very competitive here and with the weak market every call counts. Still I won’t low ball or do any house, any size for $200. as some do.
You get what you pay for.
Sq. ft. and age. I include a basement, whether heated or not, in the square footage simply because people pay it without batting an eye. Otherwise, I don’t count unheated square footage. I charge extra for detatched structures (.08/sq. ft.).
I tell the callers flat out “If you’re looking for the cheapest home inspector, I’m not him, but I can tell you who to call. I’m about in the middle; not the highest and not the lowest.” Then I tell them why they should hire me. Most do so without further price checking.
Keep it simple. Charge by the hour - $150 p/hr. The more they wanta talk and ask questions the more you make.
I listen to the needs of my Clients, asking questions as necessary. Then I provide a service to meet those needs. In all instances, my intent is to gross $100 per hour or more. I’ve found that the lower the needs of my Clients, and resultingly the lower my inspection price, the more I make per hour. Hmmmmmm. Wal-Mart might be on to something. For those who want Wal-Mart, I can provide that. For those who want Nordstrom, I can provide that, too.
For my STANDARD inspections, I barely gross $100 per hour after writing the report, and I still have 5½ years of liability for writing that report.
For my WALK inspections, I easily gross up in the $250 per hour range, and since there is no written report, I have zero years of liability for not writing that report. Consequently, I sleep better at night after having done 20 WALK inspections in one day versus one STANDARD inspection.
Ever have one say “I *need *a home inspection on Saturday afternoon for $200.”? 
Yep. And with my different inspection types, I have something for $200 that will meet their needs. Now I just have to find out what their need is: Pre-listing inspection (LIST)? Investor inspection (WALK)? Price shopper inspection (BASIC)?
If one listens to one’s Clients, and then puts aside one’s ego in order to help them, one can very easily make a six-figure salary in this industry, especially with such a well-defined target market.
William,
I could not get the cost of business website to work.
As for everyone else thanks for your input. Pricing plays a huge role in this business (as it does in every business). What I have to do is figure out something that works for me as well as my clients. I would like to keep it simple and price by the sq. ft. as I see most of you do. It is tough some times not to become a little desperate and drop your price a little to get the job with the market the way it is right now.
Here’s a free CDB calculator, just change the info for your needs
http://www.nppa.org/professional_development/business_practices/cdb/cdbcalc.cfm
Why is it tough? Do you want to sit at home and make $0 at $250 per inspection, or would you like to go out and make $200 at $200 per inspection. My creditors know which I prefer. Additionally, if someone sees the quality of your work at $200, they might refer you to a friend. No one will see the quality of your work at $250 per hour because no one hired you. The more people who see the quality of your work, the more opportunities for them to refer their family, friends, and business associates to you. Once you become famous, you can raise your prices sky high. Don’t let your ego get in the way of you making money, especially if your just starting out.
You’d probably get even more business if you used The Power of Nine pricing.
Do you mean 299.00, 349.00 etc.?
No. I mean 299, 349, etc. Get rid of those zeroes.
And do the same to your pricing structure so that your break points end in nine, i.e.,
less than 999 SF
1000-1499 SF
1500-1999 SF
Etc.
Or,
$99 home inspection convention:cool: