I guess this question is all relative. Personally I hear that our home inspection cost is a little high or in the higher end of the market. I don’t get upset because most home buyers, home sellers, real estate brokers and real estate Realtors don’t really understand what it cost to run a profitable home inspection company. There are many aspects that will influence the home inspection cost or price. Pinnacle Property Inspection Services receives numerous calls and or emails daily on quoting out home inspection services. I’ve tried to explain to my clients that you are paying for a professional service that should not be treated so lightly. Today I’ll expose the real overhead cost to run a profitable home inspection company in Chicago and anywhere in the United States.
- Errors and Omission insurance should be a major cost of a home inspection company. I know that a very large percentage of Home inspection companies do not buy Errors and Omission insurance. Why?? A cheap $250,000.00 costs about $2500.00 for 1 year. If you do only 200 home inspections a year you will have to lose $12.50 a home inspection.
- Home inspection license is another major cost. In Illinois we pay $200.00 a year and $200.00 a year for our business license. That is $400.00 a year. I understand that most states do not have licensing fees so most of these home inspectors in these states flock to a home inspector association.
- Home inspector association is a great way to meet other home inspectors and get recognized by your customers that you are a professional. I personally belong to InterNachi and find a great worth for their marketing skills to help the company get leads. The membership is $275.00 a year. If you did 200 inspections $1.25 would go to pay that fee.
- Tools and office equipment is unbelievable cost. We use Fluke thermal imagers which cost $5000.00 for 1 camera. Moisture meters, hand tools, gas meters, thermometers, mold testing equipment, radon monitors and so on is a huge cost. Let’s just call that $30.00 a home inspection that is passed on to the client.
- Transportation is a huge cost. As most of you know that gas is not getting any cheaper. I would venture to say $6000.00 would cover gas fees for 1 year. The cost for 200 home inspections is $30.00 per home inspection.
- Home inspection marketing should be a major cost to any home inspection company. If it is not and they are doing well then they are very lucky. We budget $20,000.00 a year in marketing but let’s call a 200 home inspection budget at $3000.00. This won’t get you big growth in sales but will keep you where you are at. The cost for this marketing budget is $15.00 per home inspection.
If you were to add all these numbers up we would be close to a $100.00 per home inspection. I recently received a call from a client that wanted us to perform a home inspection in Chicago for $275.00. The home was 3 bedrooms / 2 bathrooms home that were approximately 2000 square feet. This inspection took me 3 hours to inspect and 2 hours to prepare the home inspection report. The client from the Chicago home inspection did not hire us for her first home inspection. She did hire us for the second home inspection though. My price for this Chicago home inspection was $395.00. I lost the initial deal to a home inspector that does any home for $275.00. I’m sure he does not have any of these overhead costs that a real home inspection would incur. He can come in and be the budget home inspector for these clients that think they are getting a great deal. If you are a client that is worried about how cheap you can get your home inspector to perform a home inspection then be prepared to have issues in you home that you did not know about. My client from the Chicago home inspection almost was on the hook for a new roof…. $11,000.00. Pay now… or… Pay later. You choose!
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