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There are a couple of fee strategies among inspectors and among businesses in general. For one thing, your chosen strategy and fee schedule depends on who you are.

There are the inspectors who solicit and nurture relationships with agents for referrals. These inspectors disregarding professional boundaries and actually represent the agent's interest more than the that of the buyer. They are able to charge higher fees and offer less in return. They are usually the most successful inspectors for the short term, though they damage the reputation and image of our industry with each inspection that they do.

Then there are the inspectors who practice what I refer to as 'Spiritual Capitalism'. These inspectors are the true representatives of home buyers everywhere. They may not be able to charge as much at first if they wish to stay in business. They become profitable only later when their reputation becomes well known. They also generally have higher advertising budgets since they lose the favor of some agents who do not like for an inspector to report something that may break their sale.

So, it depends on who you are and what you believe in. Check the fees charged by your competition for a rough idea and pick your spot.

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Don't set your fees based on what your competition is doing. They probably aren't charging enough, because almost no one, including me sometimes, charges enough.

Figure out what it costs to live and do business annually. Everything. Don't kid yourself. Divide by about 300 because that's the number of inspections that most folks do annually that do them competently.

The number you get is what you should be charging. If that number is <$475, you probably aren't figuring your costs accurately. Ideally, you want to be getting >$500 per gig, and jack some of them up as high as you think the customer will pay.

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I will (finally, after delays) be starting an inspection service soon. Can you all give me some guidelines on how to set inspection fees? I'd rather not start with a fee and have to change it soon after. Thanks in advance for your advice.

Divide all of your expenses per year, including salary & profit, by the number of inspections that you will do per year.

- Jim Katen, Oregon

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Jeff, you do need to know how much it cost just to do business. This is a must.

In real life you can not price yourself out of the market. For those of us that have been around for a few years, we have a good handle on just what it cost to do business, or we should! You do need to know what others are charging in your area. If $325 is an average fee for a 2000sf home in your area, you do not want to price your self at $425 or at $225 you want to be in the range of everyone else. It is simple economics and folks do price shop home inspections like they are buying a bushel of apples!

I know that I want to bill out X number a dollars a week, some weeks I won't make it and others I might double it. But I know that at the end of the day, week, month or year that I need to make X dollars to keep the lights on. I'm lucky in that my wife has a good job and carries our benefits, this takes a load off of me.

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When your new it take some time to see how to price things. I started like the following and I've had people tell me I'm low.

Up to 2500sq ft - $295

Up to 3000sq ft - $345

Up to 3500sq ft - $395

Up to 4000sq ft - $445

Up to 4500sq ft - $495

Up to 5000sq ft - $545

Please understand, this is just a base to start with. After working for a while you'll learn the different things that take extra time. You'll begin to ask more questions when giving quotes and bumping the above prices up to the next level based on the answers you get.

Also remember, it doesn't always work out as planned. I find it goes both ways and I break even in the end. Some are quoted a bit high and others a bit low. It evens out.

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Can you all give me some guidelines on how to set inspection fees?

It depends on what you know and how you convey your knowledge to a client.

If you're any good at all and if you're able to communicate effectively then, in my area, you're in the top 5% of inspectors. Price your product accordingly. Folks in this category won't leave home for less than $450 or so.

If you feel that you're rather "average" or if your entire marketing plan involves realtors, then $295 seems to be the going rate.

Prices are based on my observations in Western NY

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One method is a miniumn to walk out the door of say $250-$300. That is usually for condos or houses less than 1000 sq ft. Then a stair stepped priceing scale similar to John Dirks post up to a certain size, usually about 3500-4500 sq feet. Then it switches to X amout of cents per square foot. Commonly between .10 and .18 cents a square foot.

Over about 8000 square feet it is a combination of factors. Buildings of that size take mulitple days and/or mulitple inspectors. Factor in another day of report writing. If it takes you 2 days to inspect and a day to report that is three days. So minimum on a job like that is going to be your opportunity cost of multiple smaller inspections during that time frame. If you normally perform 2 inspections a day at average $350, then your opportunity cost is $2100. So, the 3 day 12,000 square foot should cost at least $2100. 12,000 square feet at .15 a square foot is only $1800. You would be losing money at .15 a square foot. At .18 a sq ft, you break even with your opportunity cost.

Then you might consider .01% - .03% of selling price. If it sells for 1 million, you charge $1000-$3000

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There is a discussion over at the Home Inspector Pro Software forum. Some company was considering hiring inspectors nationwide and was trying to device a standard pricing scheme. They asked inspectors to post their priceing schedule. Over 225 replies at last check.

Pricing varies by area of the country and services offered. Some charge extra for crawlspaces and some give discounts for slabs. Some provide add on services like radon, pool, irrigation system, sewer, etc inspections. Some bundle the services in and others charge extra. If depends a lot on your market.

http://www.homeinspectorpro.com/inspect ... HIP-USERS/

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The time it takes for me to do an inspection is more of a factor of the buyer than the house. I walk through the home with my client and explain as I go. To check one more or less bedroom or bathroom is not much of a time difference.

I wish I could price the inspection as it relates to who was going to be with the buyer when I was inspecting. An inspection with the just the buyer would be the least expensive. If the in-laws, handy uncle, and know-it-all "Contractor" friend attend and ask questions, the price would be substantially more.

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Hi,

Any advice related to fees that you receive here will be useless to you unless you incorporate the fee structure into your overall business plan and set goals. Go here to get some free online training on how to set goals for your new business and do all of the things necessary to keep the business successful.

ONE TEAM - ONE FIGHT!!!

Mike

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There is a discussion over at the Home Inspector Pro Software forum. Some company was considering hiring inspectors nationwide and was trying to device a standard pricing scheme. They asked inspectors to post their priceing schedule. Over 225 replies at last check.

Pricing varies by area of the country and services offered. Some charge extra for crawlspaces and some give discounts for slabs. Some provide add on services like radon, pool, irrigation system, sewer, etc inspections. Some bundle the services in and others charge extra. If depends a lot on your market.

http://www.homeinspectorpro.com/inspect ... HIP-USERS/

That's an interesting thread, but I don't see how some of them good ol' boys make a living. A majority don't even charge extra for a crawlspace. If I'm gonna squiggle through rat shit and expose myself to a gazillion other environmental hazards, someone's gonna pay me a fair price for the effort.

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Good point. Everyone thinks old homes are complicated. They can be, but sometimes they're the simplest.

Not around here. It can take forever to identify all the hamfisted repairs/improvements/add-ons that have occurred within a 90- or 100-year-old house.

I definitely charge more for older places.

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I upcharge $2 per year for homes over 25 years old. Homes 0 to 25, no upcharge. 26 years old gets a $52 dollar surcharge. Most of the houseing stock in this area is less than 50 years old.

Charging for crawlspaces seems to be a regional thing. There are virtually no basements in my area. Most homes have crawlspaces with a few slabs throw in. My pricing assumes a crawlspace everywhere and if I stumble across a slab or basement, it makes my day.

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I wish I could price the inspection as it relates to who was going to be with the buyer when I was inspecting. An inspection with the just the buyer would be the least expensive. If the in-laws, handy uncle, and know-it-all "Contractor" friend attend and ask questions, the price would be substantially more.

Amen. There should also be a way to charge extra for the number of children present, and a sliding scale for how distracting they are. It's great fun having to explain everything once to "Dad" and then once more to "Mom".

Tom

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