Home Inspection Franchise Industry Overview
Home inspections ensure that a home being bought meets the regulations of an area in various categories. More specifically, according to Redfin:
<blockquote>A certified home inspector will take a close look at all functional aspects of the house to determine its safety as a dwelling. The home inspector will test the operational status of all major systems – plumbing, electrical, heating, and cooling – and check the roof, the foundation, and the home’s exterior. The inspector's job is not to fix or warn you about potential issues but to take note of the house’s current condition at that point in time and any safety or repair concerns.</blockquote>
Homes are bought and sold every day. Oftentimes, to complete these purchases and sales, a home inspector is called in for a third-party opinion. Inspections help buyers avoid surprises that could cost them big money down the road on top of the purchase price.
On the other side, an inspection gives sellers a better idea of any problem areas that might exist so they can forestall any questions a buyer might raise. Ultimately, this helps them get the highest price they can by addressing those potential areas of concern, or it helps them realize why they’re not getting the price they’re asking.
While in a competitive real estate market a home inspection as a requirement of sale can be waived, most homebuyers are remaining steadfast in their use of home inspectors. According to Money, even in the current red-hot housing market, approximately 80% of homebuyers aren’t waiving their right to an inspection.
In addition to standard home inspections, home inspection franchises can also provide pre-listing inspections, mold tests, indoor air quality evaluations, or other analyses. Major franchise players in the home inspection industry include (in alpha order): AmeriSpec Inspection Services, HouseMaster Home Inspections Market Share, Morrison Plus Property Inspections, National Property Inspections, Pillar to Post Home Inspectors, and WIN Home Inspections.
The biggest benefits in owning a home inspection franchise over independent operation include:
- Assistance with business setup
- Access to proven training
- The branding advantages of a well-known name
In addition, the nature of the industry allows for flexibility in franchise ownership. Many home inspection franchisees do the job of performing inspections day-to-day. However, for those who would prefer an executive franchise model opportunity, a number of home inspection franchises do allow for owners to grow into a multi-unit operation that they can oversee.
Home Inspection Industry Outlook
Building inspection is a $4 billion industry in the United States. Per the Bureau of Labor Statistics, the employment rate in the construction and building inspectors industry, which includes home inspectors, is projected to grow 3% in the decade covering from 2019 to 2029.
Pandemic Impact
As with all facets of life, COVID-19 adjusted the way business is conducted in the home inspection industry. Per HomeGauge, traditionally inspectors have encouraged buyers and their agents to be present at the inspection. However, now it’s become more common for inspectors to complete the inspection alone and share the results via video conference later.
Further, some inspectors are now conducting real-time video conferences with their clients as they walk through the home. Another adjustment option has been the conducting of a “desk inspection” where “some inspectors can pull all documents in the public record relating to the home and pair that analysis with an inspection of the home’s exterior.”
Buying a Home Inspection Franchise
The opening costs for prospective franchisees can depend on many factors, including but not limited to: the business system and execution requirements, the size of the territory the franchisee desires, and more.
Franchisors offer estimates in their Franchise Disclosure Document (FDD) based upon their experience establishing, and in some cases operating, units. However, prospective franchisees should keep in mind these estimates are just that—an estimate. Prospective franchisees should review the figures presented with a business advisor, taking into consideration their unique circumstances, before making the decision to enter into a franchise agreement.
When it comes to finding the answers for what franchisors are looking for when vetting franchisees, there’s no better source than a franchisor.
Here are the answers to a couple of the most commonly asked questions by wannabe home inspection franchisees from a leading franchise executive in the industry.
What advice would you give to prospective franchisees on what to look for when researching franchises?
“Get to know the culture of the organization,” says Kathleen Kuhn, President & CEO of HouseMaster Home Inspections. “This is critical. While the formal support provided by the franchisor must be strong, the best franchise systems have a true fellowship among their franchisees. This secondary layer of support is powerful and can be an important factor in terms of a franchisee’s ROI on joining the system.”
What are the most important traits a franchisor looks for in prospective franchisees?
“Naturally we have certain liquid capital requirements as well as net worth requirements, but just as important are the less tangible traits,” says Kuhn. “Self-confidence, strong communication skills as well as family support are important characteristics we look for before we award a franchise. We love franchisees that come from entrepreneurial families or backgrounds as well.”
Notice she didn’t say real estate experience. That’s right, previous industry experience isn’t required.
In fact, per HomeTeam, home inspection owners come from diverse backgrounds. “Our newest partners consist of sales executives, financial consultants, real-estate investors, military officers and more. However, they all share the common goal of investing in a business with virtually unlimited growth potential and a powerful resale value.”