We don’t want to be dramatic here, but calculating how much to charge for home inspection services might be the single biggest business decision you can make when starting as a solo inspector.
The ability to find the perfect pricing sweet spot — the one that’s both competitive and profitable — can make the difference between you becoming the most reputable inspector in your area or failing to find any new business.
Beating your competition is important, but so is creating a pricing model that is sustainable as you grow. Remember that pricing is specific to your market, your competition, and you.
Here are some of the commonly used methods you can consider for your pricing.
Home Inspection Pricing Methods
There are different methods home inspectors typically use when it comes to pricing. These typically include one or multiple of the following:
- Example: $350 base rate, $100 per add-on, $100 extra for houses over 2,000 sq feet
- PROs: Simple, customer-friendly, budget-friendly
- CONs: Inefficient
With flat-rate pricing, the inspector charges a single defined amount for the house inspection and increases the price for any additional services. Every time you glance at a pricing and packages page, you see tiered prices for the same services.
This model is popular because it’s easy to market and makes budgeting easy. You can give quotes via phone or email easily. You can also quickly forecast your income based on a certain number of inspections per week.
Flat rate pricing allows inspectors to focus on monetization, acquisition, and retention rather than developing different pricing strategies for various types of customers.
However, you may eventually outgrow this model. If you begin to inspect larger or more high-value homes, you’ll find that you've paid the same for a 2,500-square-foot home with an attic and pool as a 1,500-square-foot home. But you can always modify your base rate and establish additional costs for your time/the complexity of the home.
- Example: Base cost of $350, additional $100 for addresses outside city limits
- PROs: Higher profits, takes travel time and local markets into account
- CONs: Can be undercut by competition
Not to be crass, but charging more in affluent areas is common, and could be very smart. Homes worth 3x your average will often have more complexity or a more hands-on owner or realtor.
Another way to include location in the pricing is to charge more for homes further out of your way, like a rural location where you will have to drive further. If you use Spectora, you can establish service areas and additional fees for specific zip codes.
Finally, account for likely environmental concerns. For example, if you’re dealing with an area where termites or radon are common, you'll want to offer a termite or radon inspection, and charge an additional fee.
Of course, a client may decide to price shop and find an inspector charging a flat rate. But don’t let this scare you. In high-stakes real estate transactions, buyers will often pay for value.
- Example: $0.20 cents per square foot would gross $400 for a 2,000-square-foot home.
- PROs: More revenue for large homes
- CONs: Most complex models may frustrate clients.
On the more complex side is to charge for square footage, per room, or some combination of the two. The pricing is justifiable in that larger homes will take longer to inspect . . .most of the time.
There are some problems with a pure size model. It may be difficult to justify the price to a client, and you will make less money on small homes. But you can always be creative. If the point is to ensure you are paid for an unusually large home, why not charge a fee when they exceed large square footage or a certain number of rooms?
Age of Home
- Example: Homes built before 1980 have an additional $100 fee and lead/asbestos testing is recommended.
Older properties can be time-suckers. They can have aging systems, out-of-practice building methods, or even contain hazardous building materials. Some inspectors will add a fee for homes built before a certain date.
If you're just starting out, you may waive this fee in the interest of getting jobs. But down the line, time will be your most valuable asset and you’re likely to use more of it when you take on a fixer-upper.
Deep Dive Into Your Costs
There are a ton of hidden costs that you may miss as a home inspector. You want to add up every little thing that gets you through a job. Less obvious ones are your fuel, your taxes, insurance, software costs, and membership fees.
Some of this can be refined over time as you get a handle on the costs of doing business. You should arrive at a number that is your baseline cost for every inspection.
There are a couple of useful things to know when you start researching your market. How many homes were listed in your service area in the past year? You can often ask realtors you may be friendly with for this data, or look into paid tools. What was the average sale price of a home?
How many home inspectors serve your area? You can use Spectora’s “find an inspector tool” to get you started. All of these things will help you get a sense of the clients, as well as the supply and demand. When busy season begins, the local home inspectors may not be able to serve their entire market, that’s where you’ll find opportunities.
See What Competitors Are Charging
There’s no shame in it. Call every home inspector in your area and get their prices. Ask about their add-ons, and if they charge for square footage and distance. Put them on a spreadsheet and note the highest prices, the lowest, and the average. Also, note how soon each of them are available. Is it the next day, or a week?
Keep in Mind Experience and Years of Inspecting
Remember: There are a lot of terrible home inspectors with decades of experience. If you carry yourself like a veteran, people will think you are one.
So, don't undervalue your knowledge and abilities. Customer experience is everything. If you can build strong relationships with your customers, not only will agents continue to come back, but they will send you a lot of referral business as well.
That being said, it’s ok to know your limitations. Sometimes this is simply not offering services that you’re inexperienced in. Take some courses from InterNACHI or AHIT if you need to brush up on specialty systems like pools or chimneys. If you don’t have the experience, at least have the training so that you feel confident charging for a service.
Don't Forget Your Add Ons
Offering more services might help you stand out from the competition. While some inspectors charge extra for services like mold or radon testing, others include specific instruments and services as part of their basic inspections.
To add value to conventional inspections, new inspectors and those searching for a competitive advantage will use technologies like gas leak detectors, thermal imaging cameras, and so on. To manage client expectations, explain what services you do and don't do in the pre-inspection brief and inspection report.
Note that some of these additional services may require certifications. Many add-ons are also typically region-specific. For example, radon isn't common outside of the eastern us.
- Thermal imaging can add $250
- Sewer Scope
- Water Quality Tests
- Mold (avg. mold add on for Spectora users is $263)
- Note Spectora inspection events (able to link events like radon pickup and drop-off to specific inspections)
At Spectora, we’re all about taking action. But pricing is one thing worth over-thinking about. Having to radically change your pricing structure after a year isn’t fun and can lose you business.
Remember to think about pricing as something that grows as you grow. Can you charge the same amount when you hire an office assistant or a second inspector?
Is now a good time to mention that Spectora is highly customizable? We can accommodate some of the more complex pricing structures, but luckily our pricing is quite simple.