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The Home Inspection Market over the next 12-24 months and How to Prepare for It  XML
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Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
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Location: Carmel, IN
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We are on an almost terrorizing upswing. For those of you that have been in the business for a couple of cycles like I have, you know what I'm talking about. We're always awaiting the next uptick in mortgage interest rates, the next downswing in the market, the next mortgage crash...that's all on top of overall economic concerns and of course more recently extreme divisiveness (in the U.S.) over the upcoming elections.

Here's what to expect over the next 12-24 months:

Interest rates will rise, but only slightly.

We closed out 2015 with the first interest rate hike since 2006 (before the crash), and these hikes will likely continue very gradually. The good news: Even if the market continues to do well and interest rates go all the way to 5% or even a bit higher, this is hardly a turnoff for home buyers. If anything, it would only slow (slightly) real estate appreciation and the ultimate monthly cost of homeownership will remain largely unchanged.

New construction will return in larger numbers.

Something has to give- we all hear about insanely low inventories and we see it in time on market. Easing of new construction mortgage loan qualifications and increasing demand will result in more development and our population base will need it. The bad news: New construction gets inspected independently at a much lower rate than existing homes. The good news: When inventory rises and time on market ticks up, less buyers of existing homes will forego inspection contingencies.

Overall real estate transactions will remain steady, but seasonal swings will come back into play.

More single people are buying homes, but that is only offsetting the trend of millenials avoiding it...renting or sitting on the sidelines well into their 30's. With interest rates ticking up though, the excitement level that took strong numbers through the traditional low seasons (winters especially in colder climates) will bring back in a very real way the "off season".

While no one can predict exactly what is going to happen in any market with precision, the gradual increases in new construction, the very consistent actions taken by the fed, and statistics about home buyers don't lie and the trends we have been seeing have been fairly steady now for years. Short of some crazy economic downturn or a return to civil war over (pick your least favorite between Trump and Hillary and insert here), the market looks pretty good for the next couple years.

Now here's some really great news: The Home Inspection Industry benefits in many ways from a downturn. We saw it in 2009 and we will see it in the next cycle. Fees in the industry generally don't go down in these downturns, so what do we care if the inventory sits a while longer and property values go down? If anything, these market conditions lend themselves to a higher percentage of properties being inspected (sometimes multiple times) and the apparent "bad market" keeps would-be enrollees in home inspection schools from even thinking about jumping in since they don't understand the disconnect between our volume and the real estate market. Even the worst market with a 30% decline in volumes may have only affected the industry by 20%. Not too bad. Well, not bad for the real business owners in home inspection but quite bad for schools and associations where success matters little and enrollments/memberships is what counts.

In reality, it is the continued strong market or very steady market that is the enemy of a home inspection business. Schools promote the spoils of "making $100,000 the easy way" and the complacency we feel from being in a hot market leads many of us to get way too comfortable in a mediocre marketing strategy or even a mediocre product. In other words, the down market gives us the instincts necessary to keep growing our businesses. The up market gives way too many competitors the resources to try and catch us.

So let's assume the worst and say we have a good, steady market ahead of us. Here's how you stay ahead of the competition and grab marketshare:

1. Turn the marketing up, not down.

We get busy, we don't need to market any more. At least, that's what we think...until the market turns and we find out the competition has been marketing in all sorts of new ways. Complacency now equals problems later. Besides, you have the best resources (financially) to market at this moment and keep that momentum going through any market conditions. If it makes you too busy to keep up, see #2.

2. Build the machine.

When you think your product is perfected, add to it. You already have the base, keep adding to it to keep your competition (or would be competition) so far behind they can never catch you. You define the market when you're in the lead and everyone following has to catch you. Keep it that way. Once you're in a position of maximum value and efficiency, hire an inspector or more inspectors. If that makes you nervous, hire an assistant- the last thing you want is inventory issues leading your hard-earned referral sources elsewhere when you aren't available.

3. Change the market.

Whether you're adding services like RecallChek and various warranty products, SewerGard, etc. or adding IR into your inspection and environmental testing...right now is the time to take the game to the next level, increase the value of the inspection, and increase the level of expectation the market has. There are minimum level SOP's, and then there are your SOP's. Let's make sure the latter is very far ahead of the prior if we plan on expanding the market. When you hear a competitor talking about "managing expectations", just agree...but then go do the right thing for your business by not only meeting but exceeding expectations.

4. Evaluate the market.

It may be time for you to expand your service area, add an inspector, or to add more offices to your marketing routes. Right now is the time to get numbers together on local market statistics and to target the top 20-40% of agents.



Post your thoughts here!

P. Nathan Thornberry
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William Chandler
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Joined: 06/23/2014 04:28 AM EDT
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For us, we are using the stable market to shed low end referrals and build our brand with higher end realtors with improved reporting and concierge services. HG just gave us the repair addendum feature which we then use to offer repair oversight for the busy realtors/buyers/sellers - actually has opened up a whole new revenue stream. This is a perfect market to expand ancillary services along with the HI offerings.

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Michael Altizer
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Joined: 10/31/2014 06:20 PM EDT
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I see the future, just a little different. I know the American people very well. There is a huge need for Renter's inspections to benefit the renter. Not everyone can afford to buy a home but everyone needs a roof over their head. With all due respect, it really pisses me off, when I see Slumlords/rent collector's screw the American people.

In economics we learn about Supply and Demand. Even you can see the demand for this much needed service. I will figure out a way to price and offer this service legally to protect the American people.

It can be done and it will. Anyone that knows me knows that I have performed over 200 Pro-Bono (No Fee Collected- Marked as Paid in Full) rental inspections, earlier in my career. I swore an oath to protect the American people from enemies both foreign and domestic. This includes people asking for a security deposit for damages, charging first and sometimes last month's rent from a prior tenant. The tenant's ask for repairs to be made so they can live in a comfortable and safe place. Most landlords make broken promises and get rich off of others.

Yeah, showing up to collect $800.00 and only taking 5 maybe 10 minutes and writing a receipt, why wouldn't they want to keep doing that; especially when the courts are in favor of landlords.

I'll be known as the Robin Hood of home inspection. I have been fed up with this for a while now. It's not a Christian thing to do, nor is it ethical for owners or property manager's to screw the general public. That's right, I'm looking out for my clients best interest.

If any of you reading this don't agree, it's either 1 of 2 ways. Either you are one of those rent collecting Slumlords or you really need to get in touch with reality and the majority of people in the United States of America.

I just need to find a way to price these services in an affordable way for my clients and in a way that I can have a steady income stream. It doesn't need to be hundreds of dollars. If I can save the life of just 1 more person, then it will all be worth it.

Maybe a payment plan over the term of their lease or a retainer fee, like a lawyer charges (only at a lower fee).

This message was edited 1 time. Last update was at 04/29/2016 06:30 AM EDT

Michael Altizer
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Concerning my post above .... An argument can be made about the landlord or property manager performing their own inspection. Well I'm on my A game thinking today and in my opinion, that is undeniably a Conflict of Interest.
mberman
Rolling Stone
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Joined: 06/23/2014 08:18 AM EDT
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Location: mt. clemens mi.
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I plan on adding an assistant this season but not sure how long to train him ( or her ) possibly with some experience, and what to pay.
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Jeremiah Anderson
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Joined: 08/02/2014 01:45 PM EDT
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Location: Blaine, MN
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We just hired our 3rd inspector and he is currently in training. We are finishing out April with 72 inspections completed.

I worked my tail off last year myself, it's time to crank up the marketing and manage this business!

This message was edited 2 times. Last update was at 04/29/2016 12:22 PM EDT


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Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
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mberman wrote:I plan on adding an assistant this season but not sure how long to train him ( or her ) possibly with some experience, and what to pay.


You should sign up for the July 16th or July 17th Business Meeting with myself, Patty Thornberry, and Chad Hett. We can get real in depth on these things there- the first meeting is always free by the way for RecallChek users.


Most inspectors higher at an hourly rate, say $10-$15 per hour depending on area, and their experience as an assistant may lead to inspector training later. They usually start with a rather simple list of things to do that just save the inspector time and effort (and risk of injury).

P. Nathan Thornberry
www.Nathan.tv
Take Your Career to the Next Level > https://youtu.be/hdBCJbl5byo
The #1 Vendor in Real Estate & Home Inspection
www.InspectionSuccess.net
www.RWSwarranty.com
www.InspectorServicesGroup.com
www.RecallChek.com
www.InspectorLab.com
www.InspectionSuperConference.com

Find a Certified Inspection Expert exclusively at www.InspectionCentral.net
Get your E&O Insurance at 20%+ off your current rates at www.RWSinsurance.com
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Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
Messages: 5224
Location: Carmel, IN
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Sign up for the Business Meeting here:

http://nathan.tv/#thebusinessmeeting

P. Nathan Thornberry
www.Nathan.tv
Take Your Career to the Next Level > https://youtu.be/hdBCJbl5byo
The #1 Vendor in Real Estate & Home Inspection
www.InspectionSuccess.net
www.RWSwarranty.com
www.InspectorServicesGroup.com
www.RecallChek.com
www.InspectorLab.com
www.InspectionSuperConference.com

Find a Certified Inspection Expert exclusively at www.InspectionCentral.net
Get your E&O Insurance at 20%+ off your current rates at www.RWSinsurance.com
[Email] [WWW]
William Chandler
General
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Joined: 06/23/2014 04:28 AM EDT
Messages: 1358
Location: Florida
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Nathan wrote:Sign up for the Business Meeting here:

http://nathan.tv/#thebusinessmeeting


Why don't you have a video of this presentation?

Property360, LLC
www.TheBuildingInspector.net
www.360pestpro.com
www.inspectnewhome.com
www.property360concierge.com
www.mold360.com
homeinspectionflorida.us/
jacksonvillehomeinspectionguide.com
orlandohomeinspectionguide.com
thecommercialbuildinginspector.com
ASHI Certified Inspector
Certified Master Inspector
"Everyone is entitled to their own opinions but not their own facts"
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Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
Messages: 5224
Location: Carmel, IN
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William Chandler wrote:
Nathan wrote:Sign up for the Business Meeting here:

http://nathan.tv/#thebusinessmeeting


Why don't you have a video of this presentation?


Because it isn't a presentation per se, it's a meeting behind closed doors and nothing leaves.

P. Nathan Thornberry
www.Nathan.tv
Take Your Career to the Next Level > https://youtu.be/hdBCJbl5byo
The #1 Vendor in Real Estate & Home Inspection
www.InspectionSuccess.net
www.RWSwarranty.com
www.InspectorServicesGroup.com
www.RecallChek.com
www.InspectorLab.com
www.InspectionSuperConference.com

Find a Certified Inspection Expert exclusively at www.InspectionCentral.net
Get your E&O Insurance at 20%+ off your current rates at www.RWSinsurance.com
[Email] [WWW]
mberman
Rolling Stone
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Joined: 06/23/2014 08:18 AM EDT
Messages: 4
Location: mt. clemens mi.
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Thanks for your input Nathan, I will pass on that meeting way too busy now. That's why I need an assistant
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