Getting Business as a Home Inspector
In this post I discussed my methodology of how I am thinking about my pricing in Maryland and DC. For my next trick, I’m going to lay out how I’m thinking about getting business. This could be wildly inaccurate or unattainable, but it’s how I’m thinking about it today, with the information I have today.
Starting with the Numbers
Just to keep everything from my previous post here in front of me, what I discussed there was that the demonstrated range was $323-$473, and I just settled on $400 because I felt like the area I would serve is a tad above average and also just for the discussion it was easier to have a round number. This might change, but it is helping me establish norms and rules right now. Then I can fuss with the math later.
The other piece was that at $400/inspection, getting to top line income of $100k/year (which would be great, but isn’t necessarily an intended goal) would mean doing one inspection every day during the work week or about 20/month and 250/year.
So the question of this post is looking at where 250/year would come from.
Available Sources of Business
I really see this as only one place, which are realtors or perhaps real estate agencies. Certainly, you can get leads from HomeAdvisor. After all, they will sell them to you, and they do send me handywoman business. But home inspections are different. You don’t need to know a home inspector. You don’t need to have one in your back pocket or use the best. You just grab one during the home buying process–mostly from your realtor and often your realtor just schedules it. That is what’s going to happen 90% of the time. There are other ways, which I’ll mention below, but I need to think about getting 80-90% of my inspections from realtors and supplementing that with HomeAdvisor leads, word of mouth, and just personal branding.
Other sources of leads
BBB. If I have a good reputation on the Better Business Bureau, I’m sure a few would come through in a year. Let’s say 5.
Local Chambers of Commerce. With Chambers, depending on their activity, I think from recommendations from other members who get asked if they know a home inspector, and these member both a) remember my name and b) don’t already have another home inspector they are more familiar with, I think I get some business here. I think I would need to be active on boards or at functions and perhaps buy an ad or two, so these wouldn’t exactly come free and may not come at all, but I think over a long enough timeline, I could get a few. However, with the fees of $100-$200/year to join all of these little areas’ Cs of C, I’m not sure there is much business above the cost of getting that business. So let’s say 2, even though I might actually get 10 and have to pay for 8 of them in marketing costs.
Active in my community. I don’t live in too big of an area, but we are all pretty close. Anywhere within the DC zone of commute always creates a decent amount of transient population, but there is a core of us who grew up around here and still remain. I’m fairly active and a trusted source for handywork. When I put up my home inspector shingle, my friends and clients are very likely to use me on the next home and also to their friends. I’m certain. If I were a little more active, joining boards and helping cook pancakes for the Boy Scouts or running the yearly 5k for Diabetes or whatever–which are all things I should be doing as part of my civic duty–then I think my stock rises some. People typically move every 7 years, so even with the few people I know and if they all moved here locally, it’s likely not more than 5/year.
So let’s say I can get 10 maybe 15 inspections/year just from a little hustle and knowing people. So now I need to come up with the bulk of the work from realtors.
Realtors by the Numbers
Let’s say I need 240 inspections to come directly from realtors. That’s 20/month and with a little cushion from my local efforts. The realtors who I know who cover the DC metro and not just our surrounding smaller communities (though these are also in the DC metro) tell me they move about 20-25 homes a year. They are pretty evenly split–according to them–along buying/selling lines. Certainly, they could be representing a buy and a sell from the same client in a particular period of time, but that math just makes my head hurt. So let’s assume that since I can only help the buyer that each realtor could provide a little more than 1/month. The reason I spike this as a little more than one is because not all sales go through and sometimes they don’t because of an inspection or rather something found during the inspection. Certainly, I would get work even if the real estate agent didn’t get to close. But they are reporting 20-25 sales in a year for which they receive a commission, and I’m just pointing out and calculating for the other work they do for clients that doesn’t end up in a sale. But I’m just going to stake this at 1.25 inspections/month/realtor as a possibility. Realtors might have a go-to inspector, but they also have backups if their main person is booked.
In the simple math of it, if I need 20 inspections/month from realtors to make $100k, and each realtor could possibly deliver 1.25/month, then I need 16 realtors who trust me as their go-to inspector. And to be honest here, you have to be fairly established to be able to crank through 20-25 sales in a year. And if you are established, then you already have inspectors you trust. So if I am just going to scoop up the scraps from the go-to inspectors of these 16 realtors, I will likely fall well short of 1.25/month from them. But that is fairly in the weeds for now.
What I can construct from here is that to make this work, I will need way more than 16 realtors and from the outside, 16 realtors seems like a ton of people to find, attract, deliver their trust, and work to their top slot. I think I can easily become their cheaper option or their alternate and that will provide some work in the summer, but what I’m seeing here is that to make it–and again, “making it” doesn’t mean $100k/year–the only true sources of work are realtors and real estate agencies. And I need to figure out a way to get my name into tons of realtors’ hands in order to even have scraps. Tough line for someone who just wants to inspect homes.