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Increase in cancellations

By Scott Patterson, ACI

Home Inspector with Trace Inspections, LLC TN #17

July 02, 2007 01:44 AM

I have been in the home inspection profession long enough to see the various cycles we encounter from year to year. We are now in what I guess you could call the Cancellation Cycle. The agents are not selling the homes like they have done in the past few years, and they are getting hungry for that sale. From what I can tell they are not qualifying the prospective buyer as thoroughly as they had been doing, the push is on to make the sale.

I know that this sounds harsh, but I really think that this is the reason that so many inspectors across the country are having an increase in cancellations. The buyers are discovering, after they make a contract that they can't get the financing on the home. The norm for the past several years was to have a commitment letter from a mortgage lender prior to even making an offer on homes, and this is not so now. Yes, the top producers still do this , and I wonder if this could be why they are a Top Producers!

So fellow inspectors; when you book that appointment it might not be a bad idea to book and inspect it quickly!

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Erby Crofutt

B4 U Close Home Inspections&Radon Testing (www.b4uclose.com) - Lexington, KY

The Central Kentucky Home Inspector, Lexington KY

I guess I'm fortunate. I'm not seeing cancellations much. I think I had one in May.

I'm usually booked about a week in advance so have little room to "book and inspect it quickly" right now but who knows what the future will bring.

Jul 02, 2007 02:19 AM

Fred Duemig

Division Home Inspections - Massapequa, NY

Hi Scott,

I had 2 cancellations in June, one because they couldn't get the financing and one because the appraisal was too low.

Fred

Jul 02, 2007 03:09 AM

Carl Winters

Canyon Lake, TX

Hello Scott:

I have been fortunate over here in Texas. I had one earlier in the year due to financing.

What I do see is new inspectors discounting the fee to get the business. I know you have to start somewhere, but that really hurts what we have taken years to upgrade our fee schedule and remain competitive in the industry. I don't see how they are making any money. If someone is looking for cheap don't come to me. My three or four hours are worth my time and effort and experience. If I have to discount at this stage I might as well hang it up, which I don't see happening because I have built my business on a strong foundation. You get what you pay for.

Have a nice 4th.

Jul 03, 2007 03:46 AM

Dale Baker

Baker Energy Audits and Commercial Properties Inspections - Claremont, NH

New Hampshire Relocation Real Estate Information

Howdy Scott

Very good post. I guess I have been lucky. I have not had any cancellations yet.

Jul 03, 2007 08:56 AM

Scott Patterson, ACI

Trace Inspections, LLC - Spring Hill, TN

Home Inspector, Middle TN

Hi Carl, Yes the folks who charge the low fees hurt everyone. If they only understood what they were doing to their own business they would stop. The same holds true with any profession. We are already the lowest paid part of the real estate transaction, and when you think about it we have some of the highest liability in the transaction.

IMO, inspection fees should be based on the sale price of a home. Say 1/10 of one percent for homes over $400,000. Lower priced homes could still be done this way but with a base fee plus the 1/10 of a percent. I've been toying with this idea for a couple of years and have used it on some high end homes with a good deal of success. But this would be a better discussion for a new blog.

Jul 04, 2007 03:25 AM

Erol Kartal

Schaumburg, IL

I don't know what bothers me more, cancellations or $$ shoppers..

Chicago Home Inspector

Jul 11, 2007 11:21 AM

Bob Elliott

Elliott Home Inspection - Chicago, IL

Chicago Property Inspection

Price shoppers are never a problem.

They ask price only because they have no idea what to say.

You need to be able to reframe the conversation to be sucessfull with that kind of call.

I lost a client that way once and could not stop banging my head on the wall for being dumb enough to answer the question.

Jul 11, 2007 11:38 AM

Scott Patterson, ACI

Trace Inspections, LLC - Spring Hill, TN

Home Inspector, Middle TN

I would say that 60% of the calls start with "how much do you charge?" I do not jump into that trap and answer the question right away. The next thing I say is "why don't you tell me about your new home", this breaks the ice and lets them tell me about their new home, I'm looking for information like square footage, age, crawl, slab or basement. Then I can give them a price. I might even delay the price answer by asking them if they are aware of the radon issues in our area.

I don't mind talking to them, and I convert about 80% of the calls to an inspection.

Jul 11, 2007 12:25 PM

Erol Kartal

Schaumburg, IL

I covert many price shoppers. I get upset when people tell me right upfront they seek the cheapest guy they can find. Why does it bother me? This is obviously the image many have of our industry.

Home Inspector Chicago Suburbs

Jul 11, 2007 01:31 PM

Erby Crofutt

B4 U Close Home Inspections&Radon Testing (www.b4uclose.com) - Lexington, KY

The Central Kentucky Home Inspector, Lexington KY

I'd agree with Scott, most of the calls start with the price question.

Like Scott, I've found that most people ask that question because they have no idea what other questions to ask. So we get talking about what other information they need about an inspector and inspection. I also convert a lot of those calls to inspections.

There are those, though, who are strictly price shopping. I don't spend much time with those. I spend too much time educating the buyer about the house, doing the inspection, and writing the report to be cheap about it.

I let the price shoppers go pretty quick.

Jul 11, 2007 11:26 PM

Scott Patterson, ACI

Trace Inspections, LLC - Spring Hill, TN

Home Inspector, Middle TN

I don't know if anyone else has seen this, but I'm having several calls where the callers states right out that they are shopping for the best price!

I don't get mad and I don't hang-up on them. I say the following: "I see, well let me if I can help. Let me save you some time by first telling you that I will be one of the higher priced inspectors in the area. First tell me about the home? .................. OK, for a home like that my fee will be ____. Would you like to reserve one of my open times?"

It works about 50% of the time.

Jun 02, 2008 01:45 AM

Carl Winters

Canyon Lake, TX

Scott - I am seeing many consumers calling for the lowest price; sign of the times. I give them a quote and if they book the inspections that is great, if they don't good luck to the lowest inspector that gave that low quote. I never vary from my price and that is how I work. I put a great value on my years of experience and the thorough inspection that I conduct. A thorough inspection is a thorough inspection, so why not put a value on your service; you don't need to low bid and hurt the industry. We have both been through these cycles, some will remain and others will go on to something else.

Hope your doing well and always enjoy your blog material. - Carl

Jun 02, 2008 03:39 AM

Bruce Pinel

S & B Services LLC - North Kingstown, RI

I basically have 2 types of callers. One group are the experienced owners who have been previously burned by a shotty HI. Those I usually get. The second, which is the more frequent nowadays, is the 1st time buyer who is trying to get the lowest priced HI they can. So I try to educate them since they are getting bad direction from "somebody". I give them my price, then wish them good luck on their new investment. Sometimes I get the HI, mostly not.

Jun 11, 2008 06:01 AM

Jacques Mountain

Dream Home Inspections/203K Consultant - Fayetteville, GA

Inspector/203K Consultant

Have not had many cancellations. Scott on average how many inspections are the guys in your area doing on a monthly basis?

Most of the guys I know average about 20.

Sep 08, 2008 12:56 AM

Howard Tennyson

Ace Home Inspection, LLC - Warner Robins, GA

Not many cancelled inspections but a lot of price shoppers. I know I am priced right in the middle of my market. I have booked about 70% of people calling for a quote. I don't just blurt out what I charge either, I have a booking note taker that keeps them on the phone for about 2 minutes and I give them their quote at the very end of the conversation.

ace

Good luck to you all!

Howard

Sep 08, 2008 09:43 PM

Scott Patterson, ACI

Trace Inspections, LLC - Spring Hill, TN

Home Inspector, Middle TN

Hi Robert,

It is hard to say just how many inspections other inspectors are doing. One thing I have learned in my 13+ years as a home inspector is to take the number of inspections that a person says they have done with a grain of salt. My favorite is when a solo inspector says that they are doing 450+ a year. That is almost impossible unless you work 7 days a week 52 weeks out of the year and don't have a life outside of inspecting.

I would say that the experienced solo inspectors are staying busy with 5-10 a week. Our market has not been hurt as bad as other parts of the country. Most of the good inspectors that I know are staying busy with one or two inspections a day 5 days a week.

Sep 10, 2008 09:36 AM