Tips for setting rates

Originally Posted By: Jim Mentink
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I’m in the process of pursuing training as a home inspector. I’m wondering what method any of you use to set your rates/fees? I would guess that some of it depends on one’s geographic location (i.e some parts of the country are poorer) but short of calling competitors and asking what they charge, what other criteria do you use? icon_confused.gif

‘If you don’t stand for something, you’ll fall for anything.’

Originally Posted By: rkulla
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As much as I hate to admit it you’ll have to call a couple other inspection companies in your area. Maybe not in the same town but the general area. I’m sure we’ve all done it at one time or another. Unless you have a brother, sister or someone else that’s a realtor that can give you the general prices, there’s really no way to do it. You need to set them as you see fit. It’s the only way to know your in line, not to high or low. Just my 2 cents. icon_wink.gif Hope that helps.

Rex Kulla

Custom Home Inspections

Maple Grove, MN

(612) 799-3093

Originally Posted By: James D Mosier
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Just yesterday I visited a couple of real estate offices to get a general idea of their feelings, thoughts and comments about Home Inspectors prior to taking the plunge.

I came home with several brochures from other companies some with prices quoted.

Jim Mosier

Originally Posted By: cradan
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. If you put together a business plan, with your cost(s) forecasted as closely and accurately as possible, you will gain an additional and critical perspective on what your pricing should be. No point in deciding you’ll charge $249.00 for an inspection if your projected cost (all items taken into account) will be $199.00 for each inspection…you’ll need to charge a higher price, or do a whole lot of inspections right out of the barrel. In this example, albeit exaggerated, you’d have to do 1,000 inspections in a year to gross $50K for that year, pre-tax.

You'll need to have a pretty good idea of several things:

1.) Your per-inspection margin, or net profit. To get a pretty good idea of what this figure will be, you'll have to "pick" an average inspection fee, and you'll definitely have to know what your cost per inspection is, right down to printer ink, licensing, continuing ed., miles on the batmobile, postage, marketing and health care (to name just a few among many other things).
2.) The number of inspections you're likely to perform in any given period of time (i.e. month, quarter, year, etc.)
3.) Your actual revenue goal (be it $20K $50K or $300K).

By understanding your cost(s), your goals (revenue) and their relationship, you'll have some of the tools necessary (in addition to knowing what your competitors charge) to figure out where your pricing should be in order for you run a successful business...

Chicago Illinois Home Inspections