Home Inspection Company Expands Throughout U.S.

When Bill Redfern was a real estate broker in Canada, he often ran into delays and problems with home inspections, which put a damper on sales.

So he started thinking about launching a home inspection company, and eventually opened the first franchise of A Buyer’s Choice Home Inspections in Halifax, Nova Scotia, in 2007.

“I saw a real need for professionalism, standardization and uniformity in the home inspection industry,” said Redfern, 46, the company’s president and chief executive.

By the time A Buyer’s Choice celebrated its second anniversary, it had become the largest home inspection franchisor in Canada, Redfern said, with double-digit increases in the number of franchises and revenue, each year.

Then the real estate downturn hit, and Redfern decided the time was right to enter the U.S. market.

He moved A Buyer’s Choice’s corporate office to Pompano Beach, Fla. in October 2011 and created a training center for franchisees.

Today, A Buyer’s Choice has 30 franchises in the United States, plus 130 in Canada and 30 more spread out among the Czech Republic, New Zealand, Chile and Slovakia, said Redfern, who lives in Fort Lauderdale, Fla.

Hank Lobdell bought a franchise in Tampa, Fla. last August, after working in property management for 20 years.

“I wanted to be my own boss again, and everything I saw that they offered, and the value in the company, as well as the procedures they had in place, it just seemed logical,” said Lobdell, 46.

He did 15 home inspections in March and is on target to do 20 to 25 this month, charging $270 for a condo and up to $500 for a home, as well as $150 for four-point wind mitigation reports.

Lobdell is trying to add five inspections each month, and when he reaches his goal of 50 a month, he figures he can take home $140,000 to $160,000 a year after taxes.

“It’s been great,” he said. “Tampa is a market that’s pretty strong right now, a market that’s coming back, and in certain price ranges, homes are getting multiple offers. I’m developing relationships with Realtors, and the Realtors using me say they love the service and love the reports I submit.”

A Buyer’s Choice has seen its revenue rise with its franchise volume, from $800,000 in 2007 to $2 million in 2012.

Overall, the home inspection industry is largely fragmented, with most inspectors operating as independent business men and women, said Bill Jacques, president of the Des Plaines, Ill.-based American Society of Home Inspectors. Other large franchisors include AmeriSpec and Pillar to Post, said Jacques, who runs his own home inspection business in Charleston, S.C.

Home inspectors are now reaping the benefits of the upswing in the housing market, he said.

“All the inspectors I know are all very busy, so it looks like the market is really on the rebound,” Jacques said.

A Buyer’s Choice franchise costs about $35,000 to open, including the $29,900 franchise fee – which includes marketing materials – plus the costs of tools and equipment, Redfern said. The company offers a 10 percent discount for veterans. Additional royalties on revenues start at $15 per inspection.

Most franchisees earn $75,000 to $80,000 in revenue the first year, which can go as high as $300,000 a year by the third or fourth year, he said.

“If you look at the number of real estate agents and transactions, there’s a huge need for home inspections,” said Redfern, adding that each franchise can do as many as 300 to 500 inspections a year.

Inspections are usually required by homebuyers who want to make sure there is nothing structurally wrong with a home, that it’s free of safety hazards, and so they can budget for any repairs. Lenders also often require an inspection report before they provide financing.

Foreclosed homes need to be checked, even more so than others, because of deteriorating conditions, said Hossein Kasmai, chief executive of Doral, Fla.-based Franchise Creator, who is working with A Buyer’s Choice to sell franchises.

Among the key items inspectors check are the roof, windows and doors, plumbing, electrical, cooling and heating systems and insulation.

“What we are really looking for is major electrical, mechanical or structural problems,” said Jacques of the American Society of Home Inspectors, who has found original wiring dating back more than 100 years. “We’re always going to find doors that don’t open and close properly or screens missing, but what we are really looking for is: Does it need a new roof? What kind of condition is the electrical system?”