Problems Using Online Services To Find Contractors

Where do I start, some of these online services are making more money than the contractors. I can't believe some of the fees that a contractor has to pay to be part of their service. Some of these online services provide you with a nice format and a couple of friendly pictures of people who probably aren't even contractors or even in the construction business. Some of these people might not have ever worked in the construction business.

One of the largest companies is, Service Magic. And I actually used to belong to their service, when it was more reasonable and wasn't such a burden on the homeowner. Now wait a minute, how could it possibly be a burden on the homeowner? Service Magic doesn't charge the homeowner anything, they charge the contractor who uses their services.

Well that's true, here's how it worked the last time I used Service Magic. I needed to hire a heating and air-conditioning company, to install a new forced air unit into the home that I was remodeling. I went to Service Magic, filled out the forms required and within minutes, they sent me four contractors in my area.

Each one of these contractors paid $55 for Service Magic to send them my phone number. That's $220 that Service Magic made from these contractors to use their services. That's a lot of money. Three of these contractors didn't get the job, the one contractor that received the job, would have paid $200, to anyone else who referred them to someone and they got the job.

I think you're starting to get the picture, the contractors who didn't get the job, need to charge their future clients more money to stay in business. The contractor really passes these additional expenses onto future homeowners.

I would imagine over time, these companies will go out of business and something else will take their place. But for now, that's how the online contractor referral business works. Not all of them work that way, some of them charge even more money.

There is one company that I know of that charges 10% of the total project or up to $1000 maximum. It's hard to imagine that someone could get that much money for simply providing a contractor with a phone number.