Am curious on what price range a standard home inspection should be in. Don’t want to out price myself, and also don’t want to be in a situation of undercutting other inspectors. Know prices are probably “regional”,* I am in Washington State) but a general guide line wold be helpful. Don’t want to be the walmart of the inspection business!!!*
If you are serious about starting your business, I would recommend doing an internet search of your competitors either through the “find an inspector” or other search sites. I do this on a regular basis to check the pricing structure in my area.
I would suggest joining NACHI and then checking the “Members Only” section for marketing information.
I find it difficult to help my competition when they are not members. At the same time, there are numerous competitors in the Puget Sound region that talk and help each other on a regular basis, all members of this fine organization. Join the group.
This is a work inprogress for me, trying to determine the REAL viability of a income from this, as the “schools” and some “associations” paint a rosey picture as to demand and income, but then they are trying to “sell their goods”!!!
NACHI is my first choice of associations after looking on line and by phone at other associations (ASHI NAHI}. NACHI truly a association FOR the home inspector.
First you need to know what your costs are before you can even consider what your price should be. Add up all your expenses and you will be surprised at what they will come out to. Also, what are you worth. If you are starting off part time, you will then be able to be very competitive.
Thanks for the information and advice.I will start out part time as I transition out of the home improvement/repair business. After 30 years, won’t miss it a bit!! Did many home inspection “work orders” over the years for realtors in the area, so hopefully this might be an inroad to the business, and never failed a reinspection. With the exception of a few “specality” tools/items, am well set as far as start up costs.
The problem with setting your prices based on some average is that it’s generally a path to failure and financial disaster.
Answer these questions for yourself?
- What are your costs to do that inspection (gas, report printing, suplied etc)?
- What portion of your fixed costs (lights, phone, insurance, training, office, dues, license fees, your living including health care, disability and retirement etc) does that inspection have to carry?
- What is your desired profit margin?
Add those together and you now know what you MUST get for your inspections and other services to stay in business. No amount of wishful thinking or complaining that people won’t pay that price will change the fact that your inspection and other services must generate enough revenue to pay your costs of doing business, make you a living with reasonable benefits and make a profit besides.
Another key fact is that you have a limited time available to perform inspections. Typically about 150 days max per year if you are working a typical pattern for the single business person.
If you have fixed costs of $80,000 per year (which is low actually). With average variable costs for an inpection in the $50 range per inspection.(keep in mind that a good guess for vehicle costs is 50 cents per mile) Lets say you could do 1 inspection per available work day. Call it 150 inspections per year.
That would be 150 x 50 = 7500 variable costs
80,000 + 7500 = 87,500 total costs
take 10% of that for 8,750 for a profit
87,500 + 8,750 = 96,250
96,250 / 150 = $ 641.67 (a profitable price at this level)
Keep in mind that if you can raise your volume that you increase your variable costs as well.
Now there are only a few ways to change that number. Either do more inspections or cut your costs or some combination of that.
The point of all this is that to do this business successfully you either have to crank out a lot (2-3 per day) of $300 inspections. Or sell your services based on their real value to your clients and not try to play at the lowend at all. Go for quality instead of quantity.
If you want to see what your numbers would be (as long as you don’t faint) then download the trial version of the Profit Pricing Modeler for MS Excel
Plug in your cost figures (It has a good category list) and some infor about your typical services (it handles 20 at one).
The result is a pricelist that makes you money and meets your financial goals.
The key is to sell your services based on the real value to your clients. As HI’s we need to start seeing ourselves as the
Another thought…If you start out with low prices to get business, it is very difficult to raise them appreciably later on. So, my recommendation is to price your service competitively based on the advice above and offer a discount from that price (military, senior citizen, single parent, first time buyer, etc.,etc.,(find a reason, but NOT because I’m NEW). Then you can drop the discount after a few inspections.