> The notion that we price our service based on our cost to provide that service is very wrong. We need to get away from pricing based on cost and move toward pricing based on the value we create for our clients.
"Well Larry, I've got some bad news and some worse news"
"What's the bad news doc?"
"The biopsy results came back and it looks like the growth is malignant"
"That's awful, whats the worse news?"
"My price to remove it just tripled based on the value you place on having it removed"
I would LOVE to charge for services in the way RE brokers do, hell, let me charge a rate based on the tax value. I am getting killed here by $200 surveyors who won't take the time to meet even basic standards.
I lost a loan closing job on a 2+ million dollar house (see my post of 11/16/11). The broker was incensed that I might charge a paltry sum of $600 for this monstrosity of a house. As a broker myself, I have a grasp on what the typical agent does to get a deal done. Outside of marketing to higher level of clientele , it’s no different than a 200k closing. In our area all brokers charge 6%, and are carefully educated to never mention that is a “going” rate. The buyer in most cases never even realizes that “their” broker is actually a sub agent of the listing broker and as such is working for the seller! The broker’s fee is split several ways, but is still around 2-3 percent of the sales price. If this guy was on the low end of that scenario he walked out of the closing with around 50k. Apparently the real estate brokers have done one hell of a job of placing value on the services they provide.
If I sound a little bitter, it's because I am.
$125/hr for drafting? Are you serious? Man, would i love to see the company get that!! My salary is about 1/3 of what we charge per hour. That rate would double my salary!! Wow!! Never happen in Mississippi.
$2,555 for a topographic survey? It that a total or is that per acre? $2,555 for a one acre topo would be awesome!!
Don't any of you Canuckians even think about opening an office here in the South. You'd have to fold the tents in less than a week due to lack of work.
I wish we could get those rates, but that just ain't happening.
Very interesting indeed.
JB, I am not too far from you. We have the same problems here with these type of surveys. I lost an attorney client once because I had the audacity to charge double the price for 2 lots. I asked him if he would charge the client for 2 closings? Fell on deaf ears. It was exactly that moment that I decided to get out of that market. I now charge 2-5 times the rate of other surveyors in this area for these surveys and I get them very rarely but I do make money when I get one. I look at it this way, if these $200 guys are busy on this type of work, I can find work they do not do and make a decent profit at it. In fact, I try and send the price shopping and problematic clients to them. I would also say that if they are not meeting standards and you have evidence of that, turn them in to the board.
