Match Game
Homeowners Slow to Go Online to Find Contractors

April 30, 2004

SAN FRANCISCO (CBS.MW) -- There's probably no project that homeowners won't first research online, but when it comes to inviting contractors to their remodeling project, they're less willing to depend on electronic means.

Despite some growth at Web sites such as ImproveNet and ServiceMagic, where homeowners can collect bids from pre-screened contractors, most homeowners stick to referrals from family and friends when they're looking for contractors.

Homeowners "want to know that someone has used this person, that the person is reliable, and what their work looks like," said Linda Kast, editor-in-chief of the building & remodeling group at Better Homes and Gardens Special Interest Publications.

Owners are also demanding a better remodeling experience, and seem to believe they're more likely to find that by talking to others, said Joan Stephens, a contractor and president of the National Association of the Remodeling Industry.

"People look for someone who they've heard keeps the house clean, has nice people working for them, people they can trust because they're going to be in their home. All those things point people more to a one-on-one, word-of-mouth referral," she said.

Just 3.8 percent of homeowners used the Internet to find professional tradesmen online, according to a survey of about 700 homeowners last year by the Home Improvement Research Institute.

"We've learned from our studies that most people pick a contractor because they're recommended by a friend or relative," said Richard Johnston, senior research analyst at the Institute.

"As far as the Yellow Pages, that's extremely less important, and people going on the Internet, that doesn't amount to a hill of beans either," he said.

Ramping up?

Still, the number is growing. That 3.8 percent of homeowners finding help online is up from 2.2 percent in 2002, Johnston said.

ServiceMagic reported more than 150,000 consumer requests in March, up from about 75,000 a year earlier, though that includes requests for maids, handymen, mortgage lenders and real estate agents, as well as contractors.

At ImproveNet (IMPV: news, chart, profile), about 30,000 homeowners submitted home-improvement jobs last month, up from about 10,000 a year ago.

"I don't believe that consumers have really been that quick to adopt, but I think it's changing rather quickly," said Jeffrey Rassas, chief executive at ImproveNet.

"We've seen more and more people coming in from the typical search engines, Yahoo, Google," he said. "They're finding that resources are more readily available online than trying to go through a neighbor or the Yellow Pages."

With those methods, "you don't have a quality filter," Rassas said. "With us there's a constant quality filter. We're constantly updating records, discontinuing memberships if (the contractors) are not doing a good job."

Upsides, downsides

Both online sources and personal referrals have their disadvantages, said Richard Roll, president of the American Homeowners Association, which partners with ServiceMagic to offer contractor referrals through its site.

Just because your neighbor had a good remodeling experience doesn't mean you will, he said. "That contractor is very good at the type of job that person needed, but is not good at the type of job you need," Roll said. "You might find you have a very different experience."

Or your neighbor might not have checked the contractor's insurance. "It may not have been a problem in their instance but it could become a problem in yours," Roll said.

With the online services, "the biggest bad news is that, depending on your geographic area, the type of work and the time of year ... you may not be able to get any responses from ServiceMagic's contractors," he said.

"That is an experience we've had with our members at times. You can definitely give that a try and see how you do, but it won't work every time."

Screened contractors

At ImproveNet and ServiceMagic, the two largest sites, consumers submit their project details for free, and then contractors in the area can submit a bid. Contractors pay a fee per lead.

Both sites screen contractors to make sure they're insured, no complaints have been lodged against them, and their licenses, if required, are valid and up-to-date.

They also monitor customer feedback, mediate problems between customers and contractors, and drop contractors who receive too many complaints.

ServiceMagic, with about 24,000 contractors, offers a $500 money-back guarantee on remodeling work performed by its contractors.

ImproveNet, with 34,000 contractors, doesn't offer a money-back guarantee, but "would certainly accommodate a homeowner if there were an issue," Rassas said.

When one homeowner complained of bubbling plaster, "we told (the contractor) to go fix the problem, and arranged a conference call between the two. The contractor went out and fixed the job," he said.

"Typically it's not that they're bad people. They get busy and they may not have the same sense of urgency. If you're sitting in your home, you have nowhere to escape the problem."

Other options

Along with ImproveNet and ServiceMagic, there are dozens of smaller sites listing contractors, though not all offer pre-screening.

"We're more focused on the education process and really making it easier for the consumer to find a contractor, not necessarily saying 'hey, this guy is going to come out and do a great job," said Terry Lynch, operator of "You can't really guarantee human nature."

The National Association of the Remodeling Industry's 7,000 member companies are certified and abide by the association's code of ethics. Homeowners can search the site by zip code.

The American Homeowners Association has partnered with ServiceMagic to provide access to contractors, but the AHA has upped ServiceMagic's guarantee, offering $1,000 back for inadequate remodeling work.

Local building centers, lumber yards, and city building or planning departments also make for good places to find contractors, said Tom Silva, a general contractor and resident expert on the television shows "This Old House" and "Ask This Old House."

Still need to grill

No matter where you find a contractor, and whether he's pre-screened or not, ask questions of your own.

"Ideally, the service is doing the legwork for you," said Allison Beatty, president of, a home-improvement resource site. "But I don't think you can completely let your guard down."

You should still get references, call them and go to see the contractor's work. Also, make sure the contractor is an expert in your type of project.

"If you're going to spend $50,000 to remodel your kitchen, you want to make sure you hire someone who focuses on kitchens," Beatty said.

Be wary of contractors who are available immediately to do a big project, Silva said. "If you call up and someone says he can be there tomorrow to do a major job, you have to figure out why," he said.

Make sure the contractor isn't driving long distances that will end up delaying the project and possibly cost you extra.

"You want to make sure that the contractor is not driving 30 miles to get to your job site," Beatty said. "In some way, you're going to pay for that. The contractor has to charge for his time."

Finally, be prepared to spend some time finding the right person. "It's time consuming to find a contractor," Silva said. "There really isn't any easy way.

"Your house is the biggest investment that you made in your life. Do you want the cheapest guy to work on it?"

Andrea Coombes is a reporter for in San Francisco.

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