How much should I charge?
That query is the second most common question I am asked — The answer is simple:It depends.
It depends on how much you want to make, and how many hours you wish to work each day or each year.
It depends on how well you can sell and and how well you market your services. If you stink at selling and marketing, then you won’t be able to charge as much as someone who knows how to sell — even if you are a more qualified appraiser.
How much your competitors charge is NOT a criteria for selecting your rates.
Here is an example of why setting your rates based upon the competition is dead wrong.
In the next town over, there is a barber who has sign in his window “Haircuts $3.00.”
So, what do you think happened to the new barber in town who opened up his barber shop down the street and charges $13.00 for haircut?
You might guess he could not compete with the barber who charged $10.00 less than he does.
Well, the new guy cleaned up. Why? A few reasons:
1) The $3.00 barber’s name is Joe and his nickname is “Shaky Joe.” He is very old and has a palsy shake in his hands. When he asks: “Trim your eyebrows?” All his patrons reply with a resounding “NO — thanks.”
2) His haircuts are not so good, but not bad for $3.00.
3) The new barber put a BIG sign in his window that reads: “We Fix $3.00 haircuts.”
Shaky Joe is no longer there. A day spa opened up down the road from the $13.00 barber and charges $25.00 for a hair cut (you get a glass of wine with it). Currently, they are doing a booming business.
I heard this story from our good friends, who work as teachers in a private boarding school in the same town as these barbers.
They told the story over dinner while we dined at the most expensive restaurant in the county. The restaurant was packed, and there are a dozen restaurants with prices far below this place within four miles of this place.
So for those appraisers who tell me that their prices are based upon their competitors’ prices, — they better think again.
Learn how to sell. Start reading everything you can about selling and marketing and start using it.