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How to Use Online Review

Trust? Maybe. Verify? Always.

It’s an old story and, unfortunately, still relevant today—in September 2011, Business Week reported on a Texas home improvement contractor who hired a writer to post 200 positive reviews on sites like Yelp and Google. The article went on to cite other examples and estimated the percentage of fake online reviews at close to 30 percent.

Such stories have been multiplying, with a Google search for “can you trust online reviews?” returning over 62 million hits. At the same time, multiple studies say online reviews are still trusted by most Americans—about two-thirds of them according to the Pew Research Center.

While fake reviews are blatantly unethical, 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 shortcut to making a decision.

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, does it make sense to choose or reject a builder for a half-million dollar house based solely on anonymous online comments?

Unfortunately, that’s often what happens. We know of at least one professional builder who asked every potential new customer what information sources they had consulted. Less than 10% had even gone to the builder’s website and of those who had, most never looked past the project photos. However, all of them had checked out the popular review sites.

We also know builders who received negative reviews from people they had never worked 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 are useful selection tools. We like that they empower buyers and that 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 builder reviews? When it comes to finding a builder for your dream home, review sites should be just one tool in the selection toolbox. You also want to read through the company’s website, paying particular attention to the places that describe its business process. Then use that information to develop questions for the builder and for the builder’s references.

Although this takes more time than scrolling through Yelp, due diligence pays big rewards. A new home is one of the most important financial and lifestyle decisions you will ever make, so it’s smart to do everything possible to identify a builder that’s a perfect fit for you and your project.