Saturday, October 5, 2013

Minimums are Non-Negotiable!

Some people like haggling over price. I suspect that for some it's just part of their culture, but for the most part, our Angie's List customers are not hagglers. They are primarily concerned with getting good value for their money. But this week I had two Angie's List callers try to renegotiate the deal price. (The deal offers $171 off just because they found us on Angie's List and they wanted me to lower the price even more?? Maybe they just wanted to prove that people in America CAN negotiate.)

I sort of see where they get the idea. Our Angie's List deal offers a set price on homes up to 4200 square feet. They think that if the home they're looking at is only 2100 square feet that the price should be halved. Ummm, no. Even if it's a 1000 square foot condo, it has a foundation, a roof, an HVAC system, a water heater, kitchen appliances...you get the idea. In fact, there have been several instances where Mark has spent over four hours inspecting older 1000 square foot condos.


Our pricing is based on square footage, age, and foundation type, but we have an established minimum price.

The minimum price is based on a maximum square footage of 4200 square feet. We arrived at the somewhat arbitrary 4200 square feet because this is where square footage really starts to add additional time to the inspection. Homes over 4200 square feet tend to have more than one HVAC system, multiple water heaters, more kitchen appliances, and more bathrooms.

As a rule, older homes have more wrong with them than newer homes. Consequently it takes longer to inspect them. If two houses are exactly the same size but one was built in 1955 and the other built in 1995, it almost always takes an hour or more longer to inspect the older one. But I don't always add on for age. For example, if the home is under 2000 square feet, I typically don't add the "age" charge, just because our experience with these properties indicates that it isn't necessary. Plus the age factor isn't even taken into account for Angie's List clients.

Then there's the foundation type. We charge extra for a pier and beam foundation. Typically we charge $250 extra. If it applies, it's added on to the Angie's List deal price. It's not negotiable. I've been asked why it's so high. My answer is in the form of a question. "How much can I pay you to go under the house?" Most buyers tell me they wouldn't go there for any price. Makes $250 seem like a deal.

And aside from that we have to consider fixed costs, such as insurance, web hosting, auto expense,  telephone, advertising, etc. There is a point where it no longer pays to leave the driveway. That's why we have a minimum charge. It allows for all the fixed costs, most of the costs associated with the specific job and a margin for profit. I already know we're not the cheapest - but we're competitively priced, especially when you consider what you get for the money. I guess that's why one of those two "would-be negotiators" called back to schedule an appointment without any additional price discussions. 

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