How to Use Online Contractor Reviews

Trust? Maybe. Verify? Definitely.

A September 2011 Business Week article reported on a Texas home improvement contractor that hired a writer to post 200 positive reviews on sites like Yelp and Google. The story went on to cite other examples and estimated the percentage of fake online reviews at close to 30 percent.

Such articles have been multiplying, with a Google search for "can you trust online reviews?" returning over 62 million links. At the same time, though, multiple studies indicate that online reviews are still trusted by most Americans—about two-thirds of them according to a 2016 Pew Research Center study.

Fake reviews are blatantly unethical, but it's not surprising why some businesses post them. Positive reviews bring more customer inquiries than anything else because they offer busy people an easy decision-making shortcut.

The question is how best to use that shortcut. The answer, we believe, is to give reviews a weight that varies inversely with the purchase value. It's one thing to buy—or not buy—a $49 toaster or even a $300 travel bag because of Amazon ratings. On the other hand, is it wise to choose or reject a contractor for a half-million dollar house based on anonymous Internet comments?

Unfortunately, that's often what happens. We know of one professional builder who asked every potential customer calling for the first time what information sources they had consulted. Fewer than 10 percent of them had even gone to the builder's website and of those who had, most never looked past the project photos. All of them, however, had checked out the most popular review sites.

We also know builders who received negative reviews from people they had never done business with. That raises a question: how many people never call a builder who would be perfect for them because of a false or exaggerated negative review? We'll never know. We'll also never know how many of those people ultimately found a company who offered the quality and level of service they needed.

Don't get us wrong—review sites can be useful selection tools. They empower buyers, and they reward great builders for doing their best work. But given the ease of gaming the system, it's wise to take them with the proverbial grain of salt.

So what's the best way to use contractor reviews? When it comes to finding a builder for your dream home, review sites should be just one tool in the selection toolbox. You should also spend time reading through the company's website, paying particular attention to any pages that describe its business process. Then use that information to arm yourself with probing questions for the builder and the builder's references.

This takes more time than simply scrolling through Yelp, but due diligence pays handsome rewards. A new home is one of the most important financial and lifestyle decisions most people will ever make, so you want to do everything possible to identify a builder that's a perfect fit for you and your project.