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Mold Testing: A Winning Strategy for Inspectors
By Isaac Peck, Publisher of Working RE Home Inspector magazine
Whether you’re considering adding mold testing to your home inspection business or you’re already successfully offering mold tests to your clients, there are some important things you should know about this growing and lucrative business opportunity—both as an upsell to your inspection and a stand-alone service.
Working RE Home Inspector sat down with Ethan Thornberry, Director of Product Development at DiscoverBreeze, a leading manufacturer of mold and radon testing equipment, and Priority Lab, a full service environmental analytical laboratory, to discuss the latest developments in mold testing technology and how a home inspector can grow their business with
Here’s what’s new with mold testing and what a home inspector should know.
Mold Testing on the Rise
Hard data about how many mold tests are conducted each year is difficult to come by, but data from a variety of sources suggests that demand for mold testing is increasing steadily.
This evidence includes:
Increased Disclosures: The National Association of Realtors (NAR), as well as its state associations, have been consistently integrating environmental and mold-related disclosures into their required transaction disclosures over the last decade.
Realtor® Interest: Realtors® are increasingly recommending mold testing to their clients for disclosure, liability, and service related reasons.
Consumer Interest: Over the last two decades, consumer interest in mold has grown steadily as a focus on “healthy living” and awareness around environmental and chemical hazards has grown.
Lab Activity: Environmental labs, and mold testing services specifically, continue to expand, with existing labs growing their footprint and new labs sprouting up to meet unique market demands. For example, Thornberry reports that business at DiscoverBreeze and PriorityLab has been growing by 20 percent Year–over–Year due to increased demand for mold services among real estate professionals, consumers, and remediation professionals.
Opportunity for Inspectors
The increasing demand for mold testing services creates an opportunity for home inspectors. For inspectors that are not yet offering mold testing as a service to their clients, acquiring the tools and the training necessary is now easier and more affordable than it has ever been.
For home inspectors that are already offering mold testing, the latest technologies and tools available, combined with a strategic service and marketing approach, creates an opportunity to grow one’s home inspection business as well as build a stand-alone mold testing business to service contractors and consumers outside of real estate transactions.
“As more and more home inspectors have started offering mold testing, we are seeing Realtors® actually requesting it from inspectors in their networks. Ten years ago, it would be pretty rare to get a mold test. But nowadays, most inspectors I meet offer mold testing. The same thing is happening with sewer scoping. Offering additional value and services as an inspector not only helps you to better service your clients and be a one-stop-shop for their needs, but it also allows you to diversify and increase your revenue per client,” says Thornberry.
Once an inspector makes the decision to start offering mold testing, gets the proper training, and chooses a lab, the next step is marketing and selling the service.
Selling and Marketing
The modern homebuyer is typically already aware of the negative health effects of mold and is often receptive to paying a little extra to have their new home be tested for mold. “People are increasingly sensitive to environmental and toxin related exposures, especially in a post-COVID-19 world. While COVID and mold have very little to do with each other, people often link it in their minds. COVID really put having clean air and not being exposed to toxic substances front and center in people’s minds,” says Thornberry.
The primary way to upsell a mold test starts on the phone with your potential client, Thornberry reports. “A home inspector’s client is typically spending close to $500,000 (or more!) to purchase their home. If you’re making that kind of investment, don’t you want your home to be in proper condition? Do you want nasty mold spores in your home that might shorten your lifespan or make you or your family sick? Making your clients aware of these facts can be incredibly effective—mold can make you sick and hurt your family,” argues Thornberry.
Even if the client declines mold testing, it is still a good idea to carry mold swabs on every job. “One of the biggest things I could recommend to home inspectors is to carry swabs with you at all times. Have your equipment with you and don’t be afraid to test areas that you’re concerned about. A lot of inspectors won’t even take a swab unless they’re getting paid to do it. If you see an area that looks like mold, take a sample of it. When you get back to your office, reach out to that client, say: ‘Hey, I took this swab of an area that I thought could’ve been mold. I can send this to the lab for $150.’ This works on a couple of levels. If mold is ever discovered later, you can prove that you took a sample of it, made the client aware, and they refused lab services. What most likely happens is you make more money. It also increases the likelihood that they want to do a full analysis,” says Thornberry.
Having strong search engine optimization (SEO) is also vital. Ensuring a good presence on Google and Bing for your home inspection and mold testing services is integral to building your business. “You’d be surprised how many people are Googling mold testing and hit SERVPRO. In fact, SERVPRO has a whole separate phone line to decline mold testing work because they don’t want to do that kind of work,” Thornberry reports.
With the right sales techniques, mold testing can become a significant revenue driver for a home inspector. “Once people add mold testing to their business, the numbers increase by almost 100% every year. We typically see that inspectors are able to upsell a mold test around 40 percent of their inspections if they use the right techniques. At an average price of $350 per mold job, an inspector can run their own numbers for what that can do for their business,” Thornberry says.
Mold Waiver: Sales and Liability Protection
When it comes to upselling mold testing as a part of your home inspection, a good practice is to have the client sign a separate “Mold Waiver” addendum if, after your best efforts, they decline to add mold testing to their inspection. A Mold Waiver addendum would be a separate, typically one-page addendum to your Inspection Contract that would say (A) you [the home inspector] has advised the client that mold exposure can cause a variety of negative health effects such as asthma, allergic reactions, and respiratory problems, and (B) the client has specifically declined mold testing and consequently releases you from any liability and holds you exempt from any claims regarding mold.
Using a Mold Waiver addendum is a good idea for home inspectors for two reasons, Thornberry explains. “First, it serves as a final sales tool that clearly communicates your value proposition to the client. They literally have to sign that they are refusing mold testing and potentially putting their family at risk. Some clients will decide to change their minds and purchase mold testing after reviewing the addendum. Secondly, it serves as a great tool for limiting your liability with respect to mold. If a client declines mold testing and then discovers mold in their home later, you’ve got evidence that they both declined the service but also specifically released you from liability for that exposure,” says Thornberry.
For DiscoverBreeze clients specifically, DiscoverBreeze provides its home inspectors with attorney prepared contracts for both the Mold Waiver addendum, as well as several other contract templates for mold testing services, including stand-alone mold testing.
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Stand-Alone Mold Services
For home inspectors that seriously commit to mold testing as a service, it often grows to the point of developing into a completely separate business, according to Thornberry. “We do have quite a few home inspector clients that have started their own mold-testing companies. Sometimes it is as simple as offering a stand-alone service with a different company name, or just building stand-alone mold testing services into your existing inspection business. It’s become very successful for them,” reports Thornberry.
Thornberry reiterates that SEO is a great way to grow this segment of your business. If you’re ranking on the first page of Google and Bing, you can build up a base of commercial and residential customers.
The second thing Thornberry recommends is partnering up with remediation companies in your area. Once you build up a decent amount of mold testing work on a monthly basis, you’re going to encounter a number of jobs where remediation ends up being the recommended option. “When you encounter situations where mold remediation is necessary, you want to refer these leads to your local remediation companies and use this opportunity to build the relationship. If a test comes back with high mold levels, you can refer them over to your local SERVPRO for example. Remediation companies can be an incredible source of referral revenue and the best way to build that relationship is to bring them money (work),” explains Thornberry.
Mold remediation companies are a great source of work for home inspectors because they usually need a third-party to come out and confirm the presence of mold, as well as do a mold clearance test after the remediators perform their work. “Inspectors can make double revenue on every job because of this. You can test for the job, refer the job, and then get paid for a second test where you test to confirm they’ve remediated the mold and it is no longer present,” Thornberry says.
Cold calling remediation companies or bringing doughnuts to the office is not recommended here, according to Thornberry. “The best way to build the relationship is to refer work to these firms. Don’t cold call them and ask for the business. A lot of inspectors make a mistake by going to the CEO and saying: ‘Hey, we want to do this for you.’ Instead, you want to be able to go to them and say: ‘Hey, we have this property where the homeowner has some mold in their home, we don’t have anyone as a preferred vendor. We’ve heard great reviews about you guys.’ If you do that a couple of times you’ll have a strong rapport with them and you’ll open up the relationship. If you can get in as a preferred third-party mold tester for the leading remediation companies in your area, you’ll be blown away by how much work is out there for you,” Thornberry reports.
In addition to using a Mold Waiver addendum (as discussed above), home inspectors want to be mindful of two things with respect to liability related to mold. First, you want to be sure that your E&O insurance policy covers you for mold. Mold is often excluded in a home inspector’s insurance policy. OREP’s base policy includes $100,000 of mold coverage at no extra cost (visit OREP.org to learn more).
The other consideration for inspectors is what additional protection is available from the lab the inspector is using. PriorityLab offers enhanced coverage to inspectors for all environmental testing, if the home inspector is insured with OREP Insurance. “For home inspectors that are insured with OREP, PriorityLab will cover the first $10,000 in damages, including the home inspector’s deductible. In other words, if a home inspector had a $5,000 deductible, we would cover the deductible and then provide an additional $5,000 before the matter ever even made it to the inspector’s E&O insurance. We have a lot of experience defending and supporting home inspectors in this area and the offer that we’re making to inspectors is unprecedented in the lab space,” argues Thornberry. (Visit OREP.org/DiscoverBreeze to learn more about this offer.)
Service and Turn Times
Whether you’re new to mold testing or already working with a lab, after you’ve got your sales and marketing in place, the last piece of the puzzle is serving your clients, performing the mold tests, and delivering the results.
When it comes to selecting a lab, there are three primary value propositions a home inspector can look at:
1. Turn-Time for Results
2. Cost of the Test
3. Readability and Usability of Reports
According to Thornberry, one of the biggest pain points for home inspectors who offer mold testing is the turnaround time, “Because home inspections (excluding pre-listing) always occur within a real estate transaction, you need stuff done quickly. Lots of mold labs will upcharge for providing services within 24 hours, but PriorityLab charges a flat fee per report and you get your report within a 24-hour turn-time. This helps you deliver results to your client faster and stand out from your competition.”
Since the owners of DiscoverBreeze (the manufacturer) and PriorityLab (the environmental lab) are the same company, Thornberry says they are able to offer lower costs for home inspectors that add up over time. For example, DiscoverBreeze produces its own spore traps, and offers them to home inspectors starting at $3.80 per trap (with the cost declining based on volume).
“This year alone, we expect to save our home inspector clients around $400,000 on just the cost of spore traps. Controlling the entire process allows us to offer lower costs and deeper discounts for home inspectors. Additionally, our Breeze equipment is self-calibrating, so you don’t have to send it in and experience a few weeks of downtime every year unlike traditional mold pumps. Combined with the fact that we offer 24-hour turnaround time for only $20 per report, we believe we’re offering one of the highest quality mold testing solutions at the lowest price on the market today,” argues Thornberry.
Lastly, the quality of the lab report is a big issue. “Many other labs don’t even tell you there’s an issue, they will just put out a report showing the different levels of mold and 99 percent of consumers don’t even know how to read it. This puts the home inspector in the uncomfortable position of trying to interpret the report and explain it to the client. At PriorityLab, our report says there’s either a problem or no problem. It is really easy to understand and we have a phone number on top of the report. The client can go over the report with an expert and we completely take that off the home inspector’s plate,” reports Thornberry. To learn more about DiscoverBreeze, visit www.discoverbreeze.com.
About the Author
Isaac Peck is the Publisher of Working RE magazine and the Senior Broker and President of OREP.org, a leading provider of E&O insurance for savvy professionals in 49 states and DC. Over 11,000 real estate professionals trust OREP for their E&O. Isaac received his master’s degree in accounting at San Diego State University. Reach Isaac at firstname.lastname@example.org or (888) 347-5273. CA License #4116465
OREP Insurance Services, LLC. Calif. License #0K99465