How Much Should You Pay?

How Much Should You Pay for a Home Inspection?

We are in tough economic times and people are looking for ways to stretch their dollars and make every dollar count. Home buyers, like everybody else, are looking for a deal. And this entire real estate market is in a major slump right now, which only makes things worse. One third of the agents and one third of the home inspectors across this country have gone out of business and moved on to other lines of work in this last year. In an effort to save a few dollars, many people are forgoing their home inspection and buying a home outright… with no inspection at all.

For a few months now I have been debating with myself whether I should even write on this topic. All you have to do is Google your nearest large city and the words “home inspector” and you can quickly compare the home inspectors in your area. The vast majority of them do not advertise their prices. Why? They force you to call them, knowing you will ask what they charge… then they have a prepared sales pitch that is designed to convince the caller to hire them. They all have a “base price” that is real cheap, in order to spark the caller’s attention. Then, they ask a series of questions such as square footage, year built, and several other things which help them gather important information, but also gets the caller to respond over and over… and places the inspector in the proverbial driver’s seat. The caller is unconsciously committing to the sales pitch, one step at a time. Then, after they add in the extra cost for distance, square footage, age, and other things… they tell the caller their real fee. Problem is… the caller already decided to hire this guy based on his “base price”. The real price is often much higher.

My point here is that you need to shop around, and do not get tricked into hiring an inspector based upon a well designed and executed sales trick. There are some inspectors out there who advertise their rates right on their web sites. They have nothing to hide from you and I recommend you give these inspectors more serious consideration. It is clear they are not trying to hook customers with a sales pitch, and they are not trying to hide anything.
Next, I recommend comparing a few inspectors and see what you are really getting for your money. Most of them have a basic inspection… but then allow you choices based upon your individual needs or desires. Some will offer mold inspections, termite inspections, radon inspections, infrared thermography, and a host of other details, but usually at an additional price for each level of enhancement. Also, take a good look at how long will they really be inside your prospective new home. The vast majority of home inspectors across this country will complete your inspection in about 2 hours. 2-3 hours is the industry norm. Many inspectors will actually do the inspection in 3 hours. A few inspectors take as long as 4 hours. Ask yourself… why is this? Here is the single overriding reason why: MONEY. This allows them to “inspect” at least 2 houses per day. Many inspectors can make between $600 and $1,200 per day when times are good and the market is moving.

What do most Home Inspectors charge? This varies a great deal based on the market and also based on geography. In some areas, home inspectors charge $800 or more per inspection. However, in most areas of the country the average seems to be around $200-$300. Unfortunately, because of the housing market slump of this last year, and also the economic condition in general, there are lots and lots of “inspectors” out there who are charging as little as $99 per home inspection. These jokers are doing three homes per day when they can, so they can still make a tidy income. That will get you a one hour inspection, if you’re lucky. Unfortunately, a lot of home buyers will hire these guys in an effort to save a few hundred dollars. I challenge you this: Go into your crawlspace. Inspect every square foot of the soil, footings, piers, posts, stem walls, and the floor above. Go all the way from corner to every corner. Make notes, take photos, take moisture samples, and deal with the spiders and the dead mice. See how long it takes you to do this. And then ask yourself if you are still willing to hire an inspector that will look at your house in less than three hours. On average, I spend around two hours of every inspection just in the crawlspace. All my inspections take over 5 hours… and my average is around 7 hours. Day before yesterday I inspected a 2,100 square foot house (built in 1991) and it took me nearly nine hours. Why is this? I am thorough. I care about my clients. I inspect every home as though it were being purchased by my daughter. I am not trying to do two homes per day just to maximize income. Never have done two in a day, and I never will. Too easy to confuse the details, or forget some details when writing the reports.

Look real closely at what you are getting. Also, ask this of yourself… “This inspector charges $xyz”. “Am I getting a good value at this cost?”. Realize this: What your inspector charges is a reflection of what your inspector feels his services are worth.In the counties I serve, most homes sell between $150,000 and $300,000. The average tends to run around $200,000. Most home inspectors charge around $250… of course, some are higher and some are much lower. This means that for an average $250 inspection, the buyer would be paying 0.125% of the price of their home for a professional home inspection. That is, just under one eighth of one percent!

Now, let’s put that $250 inspection fee into perspective:
Cost to replace one natural gas-fired water heater: $700
Cost to replace one toilet: $450
Cost to upgrade a substandard electric service entrance and panel: $1,500
Cost to replace a garbage disposal: $350
Cost to install a new asphalt shingle roof: $3,500
Cost to replace an air conditioning unit: $1,200
Cost to replace five floor joists in crawl space damaged by termites: $1,250
Cost to replace 8 feet of damaged sill plate: $1,500
Cost to repair a foundation that has been damaged by tree roots: $8,200

The part that gets me is that many people do not think twice about paying an auto repair shop $80 per hour to fix their car. Yet thousands of people will spend hours “shopping’ for a home inspector who gives them the lowest price. The auto mechanic simply fixes the car. While important, yes… consider that against what is likely the most expensive and longest term investment of your entire life: your house. A good home inspector can identify issues before you purchase… often allowing you to reduce the cost of your purchase by thousands of dollars. A good inspector can even help prevent you from making a colossal mistake by purchasing a house that will end up costing you tens of thousands of dollars. A good inspector allows you to go into this investment with your eyes wide open… giving you a real good idea of things that will need repaired or replaced in the near future. A good inspector will also provide (in their report) valuable home maintenance tips and will also include ideas for reducing your energy consumption. Additionally, it never ceases to amaze me why some people will hire my competitor because he charges $100 less than I do. He will also do the inspection in 2 or 3 hours (I take 6 or more). He will also not test for Radon, not inspect for wood destroying insects, not test for mold, and not use infrared thermography (I do all these things). www.oxbowinspections.com/difference.php

This is one of the reasons I advertise my fees on my web site for all to see. I cannot compete for those clients who are price shoppers, because I do a complete and thorough inspection. The price shopper will see my fees and call my competitor instead. I think I have only had 4 or 5 phone calls in the last two years where I was asked how much I charged. This allows me to focus on my inspection at hand, rather than becoming a slave to my phone… trying to lure in every caller with a sales pitch in the hopes of hooking my next inspection. The clients who choose me do so because they want someone who is up front and honest about everything, including my prices. They want someone who will spend 2 or more hours in their crawlspace… not 2 hours on the whole inspection. They want someone who will check every outlet… not just a “representative sample”. They want someone who will check for mold, termites, anobiid beetles, radon, carpenter bees and ants, and hidden things that can only be seen through infrared thermography… in addition to the things normally checked by home inspectors.

Don’t get me wrong… there is a use for and a need for the “bargain” version of home inspectors. Some home buyers actually should seek out these types. But, if you are simply looking to save a few dollars (that 1/10th of 1% of the cost) then I submit that you just might not be able to afford that particular home. In other words… if you can’t pay $350 for an inspection on a $300,000 house, but you are willing to pay $250 for the inspection… what are you gaining (or losing) by saving that $100? Saving $100 on an inspection for a $300,000 house is like saving $4 on a new Chevrolet. That’s just silly. My point is… why would one even try to save a few tenths of one percent on such an important and expensive investment? Ask your inspector if he offers discounts. Some do. I give 10% off to all Firemen, First Responders, Police, and Veterans. Ask your inspector if he offers payment options. Virtually all inspectors demand payment in full at the completion of the inspection. I do not. I allow a variety of payment options, to include payment at closing, so you can actually roll the cost of your inspection into the loan for the house, and then let your loan company send me the payment. This option adds less than $1 per month to your mortgage payments.

I am not averse to turning down business from prospective clients who are looking for the lowest cost inspector. As an experienced professional, I know the value of my work. I do not claim to be the "best", nor do I claim to be the most thorough. In my humble opinion, people who believe they have no equal are most often very wrong. However, at the end of each day I go home and ask myself: “did you give 100 percent and did you give a fair day’s work for a fair day’s wage?”. I was raised with a stern hand and was instilled with a deep sense of fairness. I believe that people deserve their money's worth from the home they are buying, and from their inspection service.