I find it a bit odd, and in a way disappointing, when a past client asks for a discount of my fees for the second, third etc inspection I do for them.
I know inspectors that do this. I had one buyer tell me that another inspector they talked to said that if the deal didn’t go through that the inspector would do the next inspection for free. Other inspectors offer 25% or 50% reductions.
I find myself struggling with the math on this, but I end up with more questions than answers.
It seems to me, that anyone that can afford to discount an inspection 50% must in some sense have ripped off the buyer 50% the first time—or the amount of real value they are providing must be pretty minimal.
Am I missing something here?
I guess the whole business of discounts shouldn’t surprise me really, since if you open any newspaper you will find discounts for everything under the sun—-1/2 priced pizza, 20% off your next haircut at Supercuts, or $50.00 off a flight to Las Vegas if you fill out a credit card application.
Even the lingerie adds offer 50% off when it is obvious that there is already a whole lot more than 50% “off.”.
Can you imagine asking your doctor for a 50% discount the next time he treats you for the flu because he had already treated you for it once?
By the time I do an inspection and produce the report, I make somewhere between $40.00 and $60.00 per hour. Most people tell me that this is nowhere near enough given the experience, training and knowledge required to do this job—-let alone the liability. But that is just the facts of life for our fledgling profession where there are tremendous discrepancies of quality, discrepancies in what is expected, and huge differences between individual inspector’s qualifications & experience.
Another thing that occurs to me is that in discounting a subsequent inspection we are in some way taking responsibility for the buyer’s decision to not buy the first one. That somehow it is our “fault.”
For those of us already giving 110% to the process, it would likely not aid in “feeling good” about doing the inspection when you know going in that you are going to get paid even less for it.
I do my best to not be motivated by money or to let the cost of the inspection interfere with how long the inspection takes—-or how long the report takes. The time it takes to do the inspection and produce the report is just what it is. Sometimes you “win” and sometimes they take longer than you planned for. They take whatever they take.
I always give a fair price for the inspection based on the best information I can obtain at the time the inspection is booked. I am by no means the cheapest inspector around. Even with good information we may have to deal with the discovery of things about the house that might have altered that original cost. Most inspectors are justifiably reluctant to change the cost after the inspection has started—-and the price has been agreed upon. It is just part of doing business and one gets pretty good at figuring out what one is getting oneself into. There have been many instances where I wished I could go back to the buyer and say look, “I only quoted you half enough.”
I have started warning buyers that if there are second crawl spaces, second attics etc, the cost of the inspection will be adjusted accordingly. I have never had a buyer balk at this arrangement.
It is always difficult figuring out just what to say when a previous client asks me to do a second one at a discounted price, especially when the second property is bigger, has a detached structure they want inspected, a second crawl space or some other factor that would make it a higher priced inspection to begin with.
The simplest and most direct answer would be “No.” That can be hard to muster and I usually end up elaborating.
When they ask this question are they looking for a “faster” inspection—-a reduction in quality——skipping some components—–or, are they expecting me to just work for free for a percentage of the inspection?
I know it is human nature to haggle over the price of things, and coupled with the fact that most things are overpriced, probably gives people the idea that they should at least ask. While I wouldn’t mind too much discounting $5.00 or $10.00, that kind of number is not usually what the buyer has in mind.
I have taken to explaining it this way: “Since we have worked together on one inspection, you know what goes into the inspection itself. Also, since you have received a report on that inspection and know how many hours it took to produce that detailed report, I think you can understand that to maintain that same level of quality and care I can’t possibly reduce my fee in any meaningful way.”
I have, to date, never lost an inspection with a repeat customer because I wouldn’t lower my fee—which is not to say that I have not reduced my fee. In the early days of inspecting I did a couple of times, and one other time when pressed really hard and I knew the house was going to be a much easier inspection. That said, I have not been asked to lower my fees very many times.
For me, I sleep a lot better having a policy of not discounting my fees—-and I don’t loose my shirt or “lingerie”—-anywhere near 50% of the time.
Charles Buell, Real Estate Inspections in Seattle
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Charlie, I know, from being an agent, that I learn a lot from each inspection I attend with my buyers. I also spend a couple of hours listening to “the same old thing” that I’ve heard almost every time before. So if I were paying you, I would only want to pay you for what I learned new from 2nd and 3rd inspections. Buyers may feels the same way…but your job is to find and report on what’s wrong with a particular property. To do so, you need to cover the terrain of that property and you’ve got a price for that. You get paid for what you do and what you know. You charge a fair price. No discounts needed.
And thanks for your fine work.
Now if we could only report on the things that are new and different in the report:) Unfortunately each report must read as if we had never done another inspection for the person—lots of it is of course repetitious—but each house needs its full novel 🙂 I too have always appreciated working with you—and I really appreciate your coming in here and leaving kind words.
Great blog post! May I repost it? I have, on occaision, reduced the fee up to $20 on a second inspection as a courtesy. I find that I don’t have to reeducate on many of the same issues that were there on the first one, and also, the second house has always been in much better shape!
Julie, certainly you may reblog it. I would argue that for all those issues I do not have to reeducate a client about there are new things that I do.
You bring up a lot of different issues here. As for the inspector doing a second inspection for free or even 50% off I agree with you, they are way over charging to begin with. I have never increased my price once on site. I do this because I know it would piss me off if that happened to me. To accomplish this I am charging a little more than I would if I charged for a second kitchen, second AC and furnace, unexpected crawl, etc. On average it works out and I am only charging a little more so 99% of the time this works out fine. I did take a big hit once because I thought I was inspecting one unit of a duplex and it turned out to be the building and both units but that only happened once and I did not increase my charge (although I totally understand anyone who thinks I should have).
As for the discount on a second inspection: I used to offer it automatically anytime the inspection found a ton of bad stuff. I do not do that anymore. There are a couple good reasons to offer some discount, say $25 – $100 off. First of all your expenses on the second inspection are a little less due to marketing and similar costs. I give out a home maintenance guide and they only get one of those so I save a little there too. You also save time on the second booking because they understand your pricing etc. A second reason to do it is because the customer is taking a big hit. They put down earnest money that they have to wait to get back and jump through hoops for, they may have paid an appraiser, taken time off work, and now they have to start over and pay you for another inspection. By offering them something off you are sharing their pain which leads to more referrals. I have one more reason to offer them a discount and this is where the discount is larger (closer to the $100 verses $25). That is sometimes when you first walk in you find a flooded basement, mold, water marks, structural damage, huge leaks because the water was just turned on and there are plumbing issues. If we are in and out of the property quickly and I only have to write a very short inspection report that details a couple major defects and the report ends with “customer ended inspection early due to issues found at beginning of inspection, most of home and components not inspected” then I am happy to give them a $100 discount. I am still covered for my time (although I lost most of an inspection fee that way) and I get the next inspection from them for sure. As a side note I almost never offer them the money off on the current inspection. I write on the contract: “$100 off next inspection”.
The other factor I try to incorporate is that some people have more money than others. If they appear to be strugling with payment for the inspection and are buying a very small home I am more likely to give them a discount or a larger discount than if they are rich and buying a huge new home. The other side of this coin is that for around $300-$400 we have saved them thousands or in the case of structural issues tens of thousands of dollars in unexpected repair costs. I do talk about that if I am resisting giving them a discount and or trying to keep the discount from getting out of hand.
If going into something, I know that there are going to be additional costs, due to things being different than both parties agree to, I don’t think I have a right to be too pissed off.
So in other words you are building in a little “over-charge” into every inspection? I do not do that. The cost of each inspection is based on each house.
I have no marketing expenses and if the building is further away I have additional gas costs.
My inspection report is the maintenance guide for that particular house—no generic guides come with the report.
So 30 seconds worth of conversation is worth 25, 50, 100 bucks?
How does this get to be my problem? While I sympathize, sometimes those first inspections are for houses they should have been coached better to not have put an offer on anyway.
If an inspection is terminated early and I don’t have to spend 7 or 8 hours doing a report I am all too happy to adjust the cost of the inspection at the time of the inspection.
(I would never assume to know someone else’s financial condition)
Charlie,
Great post as usual. I think most do not understand the effort you put into your inspections and the knowledge you bring to each and every inspection.
Don, I hope you are using “you” in the “all of us inspectors” sense 🙂
Inspectors know their worth. I don’t discount prices on second inspections. Sometimes a courtesy discount of $25 which would have gone to advertising anyway. I just tell them “No, By compromising the price I would have to compromise the inspection and I just wouldn’t to that to you.” But ya can’t blame them for asking,.
Daniel, very few ever ask me for discounts so when someone does I guess I am a little taken aback.
Stand your ground, Charlie. You’re worth every penny!! My detailed, complete 95 page report from you bears witness. You provided not just a thorough inspection but a road map for all the future repairs and maintenance to be done. That is something that has been invaluable to me since I’m not super handy.
Melissa, so nice of you to come in here and leave a great comment! Thanks so much for your kind words.
Charlie, I’m almost in total agreement with you. I don’t mention the word “discount” unless I find something that I know is a “deal breaker”, like lots of active termites in multiple places, or a lot of mold and the buyer is alergic to mold. Then I do offer a small ($25.00) discount for the next inspection. I do not try to build in extra fees to cover something I didn’t know about the property in advance. My wife does the pricing of the inspections. And she has a sixth sence for words that speak of extra stuff. Words like “finished basements” that are never covered in the “square footage” of a house. I add extra for things like “over thirty years old”, and more than 2 HVAC units, and more than 2 1/2 baths. Most times she is right on the money. If she hears the key words, she automatically adds extra cost, and 90% of the time the client doesn’t say a word. We are our own worst enimies when it comes to pricing out a job. If we stick to what we know we are worth, we usually get it.
Hey Charlie, Great blog! So true that there is no valid reason for an inspector to discount an inspection. Particularly when he/she can fill that time in the schedule with another full price inspection. It is hard to relay this concept to the buyer and their agent without coming off arrogant, or as if their business is appreciated less, but often it is the truth. A business has to make a profit, and maximizing the return on each service provided is a means to that end.