How much should a new home inspector charge?

Three sources publish national figures, and they count different things. Two are cost guides written for home buyers. The third uses an insurer's data on inspectors who applied for coverage. None of them is the one national average, so each figure here is that source's own estimate.

The buyer guides land near $340, and the inspector data lands near $400. None of the sources explains the gap. One detail in the ASHI data matters most for a new inspector: new inspectors charged only $15 less than everyone else.

Local prices spread wide. HomeGuide's state ranges run from $365 to $415 in Pennsylvania and from $500 to $700 in Washington. For what inspectors earn once fees add up, see the home inspector salary guide.

In the sources, a fee starts from a base price and adds for whatever takes more time. InterNACHI's free fee calculator starts from a base price. It then adds a charge per mile, per year of age, and per square foot, and adjusts for how busy the inspector is. Any of these can be set to zero.

The common parts of a fee, with an example of each from the sources, are these:

Put the parts in writing as a price list. InterNACHI built its calculator so that whoever answers the phone can bid a job the same way the owner would.

In Russ Motyko's view, from more than 3,000 inspections, add-ons raise what each appointment earns without raising the base fee. That matters because the base fee is the number clients compare when they shop. He sees radon testing as the easiest add-on to start with and to explain.

InterNACHI makes a related point about packages. A home inspection plus a discounted radon test or wood-destroying organism inspection can bring the total up to a target fee. Its condition is that the extra service does not stretch the time set aside for the inspection.

Some inspectors fold a service, such as thermal imaging, into the base fee instead. InspectorPro Insurance advises doing an included service the same way on every inspection. For what each add-on takes to offer, see which add-on services pay.

Start with a floor. InterNACHI's method adds the salary wanted, the yearly overhead, and the profit, then divides by billable hours. Billable hours count driving, inspecting, and report writing, not office work.

InterNACHI calls a 20% profit a reasonable goal, on top of salary and overhead. Its worked example uses a $100,000 salary, $25,000 of overhead, and 1,250 billable hours a year. That comes to $125 an hour, or $625 for a five-hour inspection.

To compare that floor with the local market, do the following:

1. List the inspectors who serve the same area and post prices on their websites.
2. Write down each one's fee for the same two or three house sizes.
3. Note what each fee includes and what costs extra, such as radon or a detached garage.
4. Set those fees beside the floor from the formula.

A fee that clears the floor and sits inside the local spread is a starting point. Where the floor is above the market, InterNACHI points to better marketing and packages, not a lower price.

Read what competitors publish, and set the fee alone. The Federal Trade Commission (FTC) says the antitrust laws generally require each business to set its prices on its own, without agreeing with a competitor. Talks between competitors about present or future prices can draw antitrust scrutiny. Charging the same as a competitor is allowed when no agreement or coordination is behind it.

A low fee looks like the fastest way to win work. The ASHI column says new inspectors tend to price below inspectors with more services and years of experience. It warns that low fees lead to overscheduling. That in turn brings rushed inspections, more liability from errors, less time for other work, and burnout.

InspectorPro adds that prices far below the local level might signal insecurity to clients. The ASHI column puts its advice plainly: "avoid the temptation to match underpriced competitors."

Small cuts add up. The ASHI figures imply about 128 inspections a year for a new inspector. At that pace, every $25 taken off the fee is $3,200 less revenue a year. That is arithmetic, not a survey.

Making up the gap takes more inspections, and the day has limits. In Russ's view, one a day is the right pace for a new inspector, and three a day makes a 12 to 14 hour day. For the time each job takes, see how many inspections fit in a day.

The ASHI column advises setting fees on purpose and raising them over time. The sources point to four signals:

• A full calendar. InterNACHI's calculator has an adjustment for how busy the inspector is, so a busier calendar can mean a higher bid.
• Years in business. In InspectorPro's applicant data, inspectors past three years charge slightly more per inspection and earn almost double the yearly income.
• New services. One inspector named by InspectorPro raised prices as he gained experience and added services.
• What the market will bear. InterNACHI notes that some inspectors set a price high and lower it only if clients do not book.

A California inspector told InspectorPro that once his firm was established, it raised prices slightly from time to time, as the market allowed.

In Russ's view, the first year is the slowest, and income grows over several years of referrals from agents and past clients. For where steady fees and volume can lead, see whether a home inspector can make six figures.