Recently I was asked by a Realtor, “Why is there such a difference in home inspectors’ fees?”
A good question, I answered!
In my opinion, Home Inspectors fees range from the ridiculously low, to the ‘well worth it’ high end of the scale. Given the amount of professionalism, knowledge, and expertise needed to provide a high quality home inspection, and the exposure to liability in today’s litigious society, even the high end of the fees are much less than they should be.
First, Those of you who have been reading these articles should be aware by now that quite frankly, you get what you pay for when it comes to home inspectors, and their reports. Most low end fees are charged by using a very simplistic format of gathering and reporting information. These reports will normally be “bare bones” reports, giving very little information on why the situation is a problem, it’s potential consequences, and where they should turn to for further review and/or repair.
Secondly, lower fees are usually pushed by newer inspectors, as they try to break into the market. After being in business for a while, they come to realize that their expenses, exposure to liability, and actual time involved with scheduling, performing, completing and delivering a report, demand that they increase their fees.
Veteran home inspectors regard such “low fee” tactics in much the same light as Real estate agents regard the self help type real estate services, which offer low fees, but can not really offer the same customer service.
An inspector charging higher fees most likely has a good reason to do so. His report will be constantly updated to reflect today’s issues, and new technologies. His report will almost certainly be many times longer in length, be a full narrative style, and offer much more information. It will probably contain digital photos to enlighten all as to what and where the problem is. Not only will the high end report discuss the whys and wherefores of a situation, advice will be given on maintaining the home, as well. Many inspectors at this end provide a home maintenance manual, or similar book. For these reasons, and others, he is more likely to be in business for the long run, as well.
These inspectors are, simply put, putting a lot more into the inspection itself, and into their reports, as well. There will be significantly more time involved, both on site, and back at the office. They will have a greater investment in their continuing education, inspector association dues, and may have office and/or other support staff, as well. (Providing a higher level of service)
Another reason is liability insurance. If an inspector is uninsured, his operating cost will be much lower. (Quite possibly at the realtor’s and/or broker’s expense) Such insurance usually runs about $3,200 – 3,700 annually, and is a significant expense.
Rising costs of inflation such as high insurance costs, fuel prices, etc. must be compensated for. Pest inspection companies have been able to hold their fees for some time, now, but remember, they do not make any money conducting the inspection, they make their profit when doing the required work. Thus they are able to compensate for inflation. The same with realtor’s fees. Although the percentage remains the same, the house price rises with inflation, thereby effectively insulating the realtor from inflation. The Inspector, however, does not, and is not even allowed by law, to perform any repairs on the house they inspect. (Conflict of interest) Nor do they get a percentage of the home’ selling price.
Unfortunately, inspection fees have remained stagnate over the years, do to ‘low ball’ pricing of newer inspectors, and those simply inspecting to a lower standard.
So the next time you are comparing inspector’s fees make sure you are not comparing apples to oranges! Ask yourself if trying to save your clients a few dollars is really worth it. Just one item missed by a lesser qualified inspector can translate into hundreds of dollars in repair costs! Would you base your recommendations of Title reps, Home warranty companies, and other real estate professional/ancillary services on their fees alone? Of course not.
Feel free to ask any questions or add any comments below.