Friday, March 2, 2012

It's Uphill for Web Contractors; Homeowners Prefer to Rely on Word- of-Mouth Referrals

There's probably no project that homeowners won't first researchonline, but when it comes to inviting contractors to their remodelingproject, they're less willing to depend on electronic means.

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

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

Owners are also demanding a better remodeling experience, and seemto believe they are more likely to find that by talking to others,said Joan Stephens, a contractor and president of the NationalAssociation 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, becausethey're going to be in their home. All those things point people moreto a one-on-one, word-of-mouth referral," she said.

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

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

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

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

ServiceMagic reported more than 150,000 consumer requests inMarch, up from about 75,000 a year earlier, though that includesrequests for maids, handymen, mortgage lenders and real estateagents, as well as contractors.

At ImproveNet, about 30,000 homeowners submitted home-improvementjobs last month, up from about 10,000 a year ago.

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

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

With those methods, "you don't have a quality filter," Rassassaid. "With us there's a constant quality filter. We're constantlyupdating records, discontinuing memberships if [the contractors] arenot doing a good job."

Both online sources and personal referrals have theirdisadvantages, said Richard Roll, president of the AmericanHomeowners Association, which partners with ServiceMagic to offercontractor referrals through its site.

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

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

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

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

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

Both sites screen contractors to make sure they're insured, nocomplaints have been lodged against them, and their licenses, ifrequired, are valid and up to date.

They also monitor customer feedback, mediate problems betweencustomers and contractors, and drop contractors who receive too manycomplaints.

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-backguarantee, but "would certainly accommodate a homeowner if there werean issue," Rassas said.

When one homeowner complained of bubbling plaster, "we told [thecontractor] to go fix the problem, and arranged a conference callbetween the two. The contractor went out and fixed the job," he said.

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

Along with ImproveNet and ServiceMagic, dozens of smaller siteslist contractors, though not all offer pre-screening.

"We're more focused on the education process and really making iteasier for the consumer to find a contractor, not necessarily saying,'Hey, this guy is going to come out and do a great job,' " said TerryLynch, operator of NationalContractors.com. "You can't reallyguarantee human nature."

The National Association of the Remodeling Industry's 7,000 membercompanies are certified and abide by the association's code ofethics. Homeowners can search the site by Zip code.

The American Homeowners Association has partnered withServiceMagic to provide access to contractors, but the AHA has uppedServiceMagic's guarantee, offering $1,000 back for inadequateremodeling work.

Local building centers, lumberyards and city building or planningdepartments also are 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."

No matter where you find a contractor or whether he's pre-screened, ask questions of your own.

"Ideally, the service is doing the legwork for you," said AllisonBeatty, president of RenovatorsPlace.com, a home-improvement resourcesite. "But I don't think you can completely let your guard down."

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

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

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

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

"You want to make sure that the contractor is not driving 30 milesto get to your job site," Beatty said. "In some way, you're going topay 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 reallyisn'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?"

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