I’m currently working through my training. I am working on calculating earnings and what I would like to achieve. My question I know is a loaded one and not looking for a specific dollar amount but I’m trying to calculate what the average charge is for a 1700 square foot house. If it helps I’m in Oklahoma. A smart business person always needs to plan what they want/need to make a year but that’s something that can’t be figured without having an idea I. A charge. I know what we paid for the inspection in our rental house when we sold it and that was $500.00. Is that usually an average or is there a different way you calculate it? Thanks for guiding and mentoring a newbie.
It’s totally up to you and your market. Ask yourself if the $500 you spent was worth it or not. Regardless of your price, if you’re clients don’t think you did them justice then you won’t last in a competitive market anyway.
You pretty much just have to research your market and see what it will support. Prices are drastically different from one area to another. The easiest way is to just cruise your competitions websites for those that are nice enough to post it for all to see.
Being new it may be tempting to be the cheapest guy in town but that’s not a great business model. When I was starting out I tried to be a few dollars below average just to get as many price shoppers as possible but I was always close to going rate in my area.
Shop your market and Google is your friend.
Multi inspector firms will come in the middle to maintain market share and their prices are often published.
If you are good at what you do (not knowing your background) you will be able to exceed those prices because you will have added value.
Play around with the fee calculator to get a rough idea where you may want to be. As stated previously, your market area will play a role in what you are able to charge. Also, as a newbie, do not expect to be earning the same fees as a seasoned inspector. We, at least I, charge more for my knowledge and experience.
Before you even begin to consider what you are going to charge, you need to fully understand what your total costs are / will be!
Fixed Costs + Fluctuating Expenses + Desired Profit = Minimum Fee
These numbers are different for every inspector out there. Why would you care what someone else charges, which may not fit your business financial plan, and risk failing due to unknown bad numbers? I would bet that at least 90% of new inspectors fail to charge an appropriate fee, setting them up for failure. There is a reason most go out of business in three years or less.
Don’t be an idiot. Do it right!!
Because we live in a Walmart world. It may not be the be all end all pricing variable but it will definitely affect your marketability.
If that is the demographics that you choose to market to. I prefer to market to the Macy’s and Nordstrom’s clientele.
Pricing is a journey not a destination. First you have to be comfortable with trading your time and resources for money, so… Start with an idea of what you want to earn per hour. Let us use $100/hr, then estimate how long a typical inspection will take and then multiply, that will give you a vague target you can use as a gauge to compare with other home inspectors to see how your expectations jive with reality.
That certainly explains the plethora of $99 to $199 inspectors in Florida!
both of those stores are dead around here.
You live in Owatonna MN. I can’t imagine many Nordstrom’s or Macy’s around.
That’s your problem.
I don’t restrict myself to a 15 mile radius of my base. I serve all of Minnesota and northern Iowa (Residential), and add Wisconsin and both Dakota’s for (Commercial/Industrial).
I am a businessman, and I diversify as necessary to drive my success. I’m not content with catering to only Walmart customers and using half-ass plumber methodology.
Personally I have always priced inspections to my preferred criteria in descending order.
- Age, condition & location (no 2-story, no crawlspace, built this century, not in the hood)
- Is it a preferred realtor?
- Can I upcharge?
- Do I really want to work today?
I absolutely do. Homes start at $500,000 up to multi million all around North Myrtle Beach. I never travel more than 20 minutes for work. You keep working hard and I’ll keep working smart.
I love #4… at 27 with a new baby I wanted to work every day… At 49 with plenty of food and cold beer in the fridge? Eh, I can take it or leave it many days
When people ask me to lower the inspection price by $50 I tell them.
“If your boss came to you and said I’m lowering your salary by $50 this week, what would you say”?
I like the story:
Someone once asked Picasso to draw them a picture. He grabbed a piece of paper, took about 20 min and drew one. He said “that will be $10,000.” Really? why would I pay that much for something that took you 20 min? “It didnt take me 20 min, it took me 50 years”.
-Pricing is justified by experience