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Realize How to Monetize: Finding Your True Potential
by Peter Hopkins, ICC Certified Home Inspector
I remember when I started in the home inspection business (1996). We made it a point to stick to the standards of practice and it seemed offering the lowest price was a way of doing business. I believe people have become much more educated in the process of real estate nowadays and want more information. As a consequence, they are being accustomed to paying more! Isn’t that why we are so overwhelmed with work and no time? Information is everything—today’s businesses (and nation-states for that matter!) are collecting huge amounts of information, but many times have not yet figured out how to monetize that information.
Well when it comes to home inspections, I believe home inspectors are the most trusted individual in the transaction and they can monetize on a much higher value if they just would invest in their businesses and realize how to monetize! Home buyers are looking for information so they can not only renegotiate with the seller, but also avoid costly repairs and even maintain their home after their purchase. I remember when I bought my first house in 1999, I paid $286,000 and I thought that was a lot of money. At about that same time, $100 an hour was considered good money for home inspectors and a goal for many.
Nowadays, that same house is over $1 million and I am averaging close to $250 an hour. The home value has increased more than 3X, but my wage has only increased 2.5X. Something is wrong! I still have work to do.
The basics at the lowest price is no longer my motto. My customers will pay top dollar to get the information they need to renegotiate their deal and protect their investment. I have figured out how to monetize my business and I am not done yet! Advanced ancillary services (beyond the standards) are the answer and I have been doing them since 2005 in my business. My first run was with thermal imaging in 2005. I remember the article that same year in the Communicator magazine, Infrared Inspections: The Wave of the Future? And yes, I did purchase one of those cameras early cameras. Investing $20,000 in a new tool was a lot of money at the time and still is today.
Today, thermal imaging now makes up over 50% of all the revenue my personal company generates, with some clients spending in excess of $25,000 a year with me for about a week’s worth of work. This simple change got me through the 2007-2010 downfall.
I was ready to make additional changes in 2014 and I invested in sewer inspections at a time when no one was doing them. (See Figure 1) I invested $7,000 in a quality sewer camera and searched and searched for training. So much so, that I realized there was nothing out there and plumbers in my area felt threatened by my genius moment, many of whom did not understand their own business, and were not so willing to share their knowledge. This was a learning experience for me when the light bulb came on. Plumbers feel threatened that I am going to steal their sewer inspection business when in reality, their business is not the camera, it is the surgery in the system. They too needed to be educated on how home inspectors were going to be their BEST marketing campaign ever! And for free (See Figure 2).
Figure 1: Sewer Scan
Figure 2: Contractor sewer surgery
Let’s look at the facts. Home inspectors scan it, report it, and recommend repairs (someone else has to do this, i.e. the surgery). Well I couldn’t find the training so I had to create it. I spent a year giving away the service until I built enough confidence to sell it. I started selling the equipment with the training being free and inspectors (the smart ones) started seeing the fruit was ripe! Now you can’t go to a home inspection conference where there aren’t others preaching the same story. For them, adding this ancillary service was a game changer. You will see no less than two or three other brands out there at every conference.
The last time I checked, there are now four or five training courses teaching this technology. Some of them were my students! I take it as a compliment to see the market grow, and guess what? We are not done yet. As a point of reference, SewerScans were included in over 40% of my transactions in 2022 and we are trending over 50% in 2023. The more inspectors offer this service, the more demand is generated in the market. It can only be a good thing.
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I have noticed that more and more outside companies are showing up at my inspections in this never ending quest for information. I have a portion of my business in Los Angeles, CA and instead of just the usual pest inspectors and real estate appraisers showing up, now there are structural, chimney and sometimes HVAC guys showing up. Since pool inspections were always part of my menu and now infrared & sewer, what else is there for me? Sewer cameras appear to follow the same trend as infrared cameras. The wave of the future became a standard and we are seeing a very similar trend for sewer cameras.
Say hello to that hole Santa comes down called the chimney at that magical time of the year (See Figure 3). A little research in the chimney arena will expose a standard called NFPA 211. This standard says that chimney inspections are suggested annually and upon a real estate sale or transaction. I wonder why they would want to do that. Well, I can think of a few reasons. Chimney fires are nothing to squawk at and buyers are (of course) looking to renegotiate the transaction, right?
What better than a $20,000 pipe that shoots flames out of it when it goes bad (See Figure 4). Enter ChimneyScan. I researched this market and found there was no one doing an excellent job of educating home inspectors about this opportunity, just a few companies that were out there performing them when called. Honestly, I would say this occurs on less than five percent of my inspections—more like two percent. Yet the standard calls for 100 percent.
Figure 3: Chimney broken at the roof line
Figure 4: Chimney Pipe
Figure 5: NFPA 211 Standard for Chimney Scans
Figure 6: Crack down a chimney
The story here is home inspectors currently perform a Level I inspection for free (Level I, II, III are all defined in NFPA 211 standard). Simply running a camera up the flue makes this a Level II inspection which is the level that is recommended annually and at each real estate transaction. Running the camera up the flue will yield you an additional $175 or more—and that’s per fireplace. Imagine, as an inspector, why would you turn down the opportunity to make more money per job? (See Figure 5.) My company saw this opportunity in 2020 and retained the very experienced Jerry Isenhour to develop our www.chimneyscan.com certification training for home inspectors. The NFPA 211 Standard explains that in order to be qualified, one must go through training, so we created the answer. As in any business, you need to be searching out the opportunities and again “monetize” on the opportunity. (See Figure 6.)
So this leads me to something I have been doing all along as a home inspector in California: pool and spa inspections. I noticed that on a few of my transactions, my clients elected not to hire me but to retain “a higher level of service.” This was probably determined by the ever increasing quest for information. Something has changed over the years since I purchased my first house and that is the cost of everything. Gone are the days of a $20,000 hole in the ground with water in it. A basic pool is more like $100,000 and is much more complex with digital controls.
Home inspectors have to get retrained on how to use all these new features but also create a better package for their business and—in my opinion—monetize along the way. There is a lot more information to be told about a pool and specifically concerning a question I have often been asked: Is the pool leaking? The honest answer and the one most used by inspectors is: “I don’t know!” Unless we can see visible leaking at a pipe or the equipment, this “unknown” has been a mystery until now. I was told for several years by an inspector friend of mine Bob Massanova out of Florida, that he was using this device on pools called the “Leakalyzer” which could detect small amounts of water loss in a matter of minutes. I didn’t realize the power of this until I finally took the time to call Lance Anderson, the principal behind the company that created the product. Yes, in fact there is a product that can detect as small as 1/10,000 of an inch of water loss and it can do it in under 20 minutes. (See Figure 7.)
Figure 7: Mike Casey Leakalyzer
Figure 8: Spin touch
Figure 9: Pasi w/ Mike and Peter
At this point, I am realizing the pool inspection can be more than I have been presenting and it can answer that age-old question of “is my pool leaking?” I decided to take pools to one more level as I wondered why so many times I show up and the pool is crystal clear, but the chlorine so pungent my eyes would tear up. Basically, just like sellers like to mask the problems, they also put chlorine bombs in the pool before the inspector gets there. The problem is that we are not taught all the negative consequences of bad water chemistry, or how the life expectancy of the pool itself along with the equipment is compromised by this very important condition. Let’s face it, pool service cleaners are often chemical jockeys and their profit potential is based on how many chemicals they use. What if we could use a computer to tell us the actual chemistry? Well this has long existed in almost every pool store but who has time to take a sample to get it checked….Walla! (See Figure 8.)
The LaMotte Spin Touch was introduced to me and I felt I had a game changer with leak detection and chemistry analysis. Why not perform a better pool inspection and take my monetization to the next level? I realized that I could only do so much in a day so for www.poolandspainspectors.com, I decided to retain a well-known home inspector for the teaching part named Michael Casey, who graciously agreed to come on board to help us build this program. (See Figure 9.) My plan in 2023 is to double my pool fee by simply adding these two features to my pool inspection. It is easily done as the exchange of information is well worth the investment for the client.
Infrared, sewer, chimneys and pools, why stop there? I guess the limit is your retirement and you have to decide when that is. For me I have many years left so my goal for now is for my average home inspection to hit $1,000. I am actually not too far off from there and do believe this will happen in the near future. I hope the same for all the readers of this article, or at least the smart ones (no pun intended, I just wish good retirement to the rest of you). From here on out, my company is working on several more applications that can help home inspectors.
Soon to come is another course we partnered with Michael Casey on: www.FlueGasInspector.com. Although our world appears to be going towards an all-electric house, gas burners are still going to be here for a while. The problem is the poison released when these fuel burners are not working right. Carbon Monoxide is an odorless gas that exhausts as a result of unburned fuel, and this stuff is a killer. As it turns out, there is a device that can read exactly how that appliance is running and if it is doing its job. Could not an inspector offer such a service for a price and would not a client be interested in such a life-saving service as part of their home inspection? Or possibly just the fact that this test might yield a result that can get them a discount on their overpriced house? You can make your own decision, but I see an additional Benjamin Franklin involved with each test!
There are so many more opportunities that are not currently being offered with home inspections. Another product we are in development on (2024) is www.SolarPanelInspectors.com and who knows what’s next. Obviously, there are so many more things like mold, radon, warranties, recalls and data mining of the house’s assets, and more!
The reality is this: changes are coming for most of us. We will have no opportunity to avoid change—outside of retirement. The path you choose will be your own and you will have to make one, so choose wisely. For my part, I realize that my body is not the capable one I had 30+ years ago when I decided to get into the inspection profession. I like the idea of doing one inspection a day at $1000+. If I took ten weeks of vacation a year (sounds good, right?), and worked five days a week, (home by 2:00 pm, beer in hand), I would make a comfortable 200k+ a year!
About the Author
Peter Hopkins has operated a successful home inspection company since 1996 inspecdoc.com and has personally performed over 8000 property inspections. His company expanded into infrared in 2005, with the opening of SoCal Infrared. He is the co-founder of United Infrared, a national network of contract thermographers, which includes application-specific training and business coaching in a multitude of applications related to infrared technology and building diagnostics.
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