First, Call Angie's List
If you've ever had work done on your house, you'll know that feeling of unease that comes with hiring a contractor you've never used. You have good reason to worry: Consumers lodged 9,380 complaints against general contractors with the Better Business Bureau last year-14th place out of 3,578 industries rated. And home-improvement contractors racked up 2,568 complaints, placing them in 61st place. Hire the wrong plumber or roofer, and you can end up with a big bill for a botched job.
Enter Angie's List, an online rating service that takes the concept of asking neighbors for recommendations and multiplies it several-fold. Founder Angie Hicks says she "thought there had to be a better way for consumers to network. You can ask your neighbors, but you'll only get one or two recommendations. We let people tap into hundreds."
Begun as a phone service in Columbus, Ohio, in 1995, Angie's List moved online and today boasts a half-million members in 83 cities. Subscribers pay a $10 sign-up charge and a monthly fee of $4.95 or $5.95 to receive reports from other homeowners on a variety of contractors, from painters to landscapers.
Making the grade. Contractors receive overall letter grades, but each report is highly detailed, and contractors can respond. "When you are spending a lot of money, it's very reassuring to know that 20 or 30 other people have used this company," says Dawn Friedman of Deerfield, Ill. She joined when she was commissioning a number of improvements, including new siding, windows, and electrical work. Every company she selected using Angie's List lived up to its rating. Jeff Dlott of Reston, Va., a member since 1999, says the service works because of accountability: Contractors know they'll be publicly judged. "It gives you some leverage to say you got their name from Angie's List."
Angie's List is adding new categories next year, including child care and mold remediation. It's also expanding into new markets.
Brenda Cude, a consumer economist at the University of Georgia, says homeowners shouldn't forget other services, especially the BBB. "The Better Business Bureau is more powerful than it once was because of the Internet." Hicks doesn't disagree. "We work as a complementary service. It's important to [use the BBB to] rule out who not to use; ours is who you should use."
This story appears in the December 25, 2006 print edition of U.S. News & World Report.