Hiring Contractors Through HomeAdvisor—Pros and Cons

Male architect and tradesman discussing plan on laptop at construction site

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HomeAdvisor, formerly ServiceMagic, is a Golden, CO-based contractor-matching service that connects homeowners with professionals who can help with home-related matters, such as carpentry, electrical work, and plumbing repairs, as well as maid services and lawn care.

How Contractor Matching Services Work

The Internet is a wasteland of failed contractor matching services; they come and go with the wind. But HomeAdvisor has been in business since 1999 and is going strong. As an example of how fast and thoroughly these things change, the second most popular contractor matching service in the 2000s, Calfinder.com, has gone out of business entirely.

HomeAdvisor makes its money primarily by charging participating contractors fees for each qualified "lead" they receive through HomeAdvisor. In other words, if a contractor gets a good lead about a homeowner in the area who needs windows replaced, he or she pays HomeAdvisor a small fee. Lead generation for a fee is a standard arrangement in the home improvement industry.

How ServiceMagic Became HomeAdvisor

In 2004, ServiceMagic was acquired by IAC/InterActiveCorp. Afterward, the company changed its name—domain and all—to HomeAdvisor. For a company that does all of its business online, a domain change is quite a dramatic step.

Brooke Gabbert, Director of Public Relations and Social Media at HomeAdvisor said in an interview that both "service" and "magic" no longer reflected the company's aims. It was implicit that ServiceMagic's professionals would provide "service," so there was no need to include this term. "Magic" was an entirely different matter. Based on a year of market research, the company concluded that homeowners didn't want magic performed on their homes; they wanted solid, real work. At the time, Microsoft owned the HomeAdvisor.com domain name but kept it parked. ServiceMagic acquired the new domain name for "well under six figures," according to DenverPost.com.

In 2017, HomeAdvisor merged with the well-known contractor referral site Angie's List. This merger resulted in the formation of ANGI Homeservices Inc.

ServiceMagic's Problems, HomeAdvisor's Changes

ServiceMagic had experienced problems on both sides of the consumer/professional business structure. Home service professionals complained that they were handed weak leads, while homeowners complained that they were handed incapable professionals. At the time of the name change, ServiceMagic was already instituting some practices to make it easier for pros to return bad leads. For homeowners, ServiceMagic set up better screens and filters to make sure that the homeowner got the right professional for the project.

With the fresh start created by the HomeAdvisor name change and IAC acquisition, even more, major overhauls on the contractor side were instituted. On the homeowner side, one important change was the TrueCost Guide that spans over 300 different types of projects. This feature offers homeowners a genuine research tool and helped make HomeAdvisor a destination website.

The TrueCost guide offered a new and highly accurate way for homeowners to calculate the costs of various home repairs and improvements. What's the cost to remodel a kitchen? If you use a tool such as Remodeling Magazine's well-known Cost vs. Value Report, you get solid numbers from over 150,000 people. But these numbers typically come from people such as real estate appraisers, sales agents, and brokers.

HomeAdvisor's cost estimates, on the other hand, are "derived from surveys based on actual project costs as reported by HomeAdvisor members." In other words, as soon as the project is completed, the cost is entered and instantly is added to the Cost Guide. Not only that, these are actual project costs, not estimates. With the Hanley Wood data used in Remodeling Magazine's Cost vs. Value Report, you have to wait a whole year for new costs to be tabulated, and the data comes from the real estate professionals, not actual building trade professionals. As a result, HomeAdvisor's TrueCost Guide offers a real-time estimating tool that is always up-to-date, and always based on actual costs.

  • Easy interface allows you to solicit bids within minutes.

  • HomeAdvisor is the largest and oldest contractor-matching service.

  • HomeAdvisor has a larger number of affiliated contractors than any other matching service.

  • The website offers a wealth of information, even if you are not ready to hire a contractor.

  • Call-backs from contractors can sometimes be spotty.

  • Some important sub-categories of work are entirely missing.

  • HomeAdvisor's pre-screens, which search for things like state-level trade license, liens, bankruptcy, etc, filter out only the worst of the worst. Homeowners may mistakenly interpret a clear pre-screen as a stamp of approval.

Bottom Line

HomeAdvisor is a cut above most other lead-generation programs and is well worth trying. It offers a good deal of valuable information through its reviews of trade professionals and its TrueCost Guide, which offers an effective way to evaluate cost bids from contractors against national and local averages. However, often the best way to hire a building trades contractor is through a recommendation from a close friend, relative, or neighbor who has had a good experience. If that is not possible, HomeAdvisor offers an excellent way to discover contractors for the work you need done. But make sure to check a contractor's customer reviews and references before hiring.