Marla Selko does her due diligence on remodelers: their licensing and insurance, their workmanship and expertise, their responsiveness to clients. She does her due diligence on homeowners: their project scope and budget, their expectations, location, and timeline. Then she plays matchmaker between the two groups, in a fast-growing and decidedly personal twist on the remodeling-referral business.
Selko is president of Urban Referrals ( www.urbanreferrals.com), a 2.5-year-old referral service in Washington, D.C., that connects homeowners with prescreened local contractors, remodelers in particular. Hers is one of 400 “home referral networks” (HRNs) in 45 states and elsewhere, up from 221 in 2003, according to Debra Cohen, who created the HRN business plan and sells it to entrepreneurs like Selko.
Urban Referrals and other HRNs differ from national referral services in several ways, says Cohen. Where bigger services make money by charging contractors listing and/or lead fees, contractors pay HRNs only for jobs they actually complete, based on a prenegotiated percentage of the job cost. The national services “could get one lead and send it to 20 contractors and still get their lead fee,” she says, regardless of whether the contractor gets or even wants the job.
HRNs are also “a very local, personal, concierge-type service,” Cohen explains. “If I'm in New York, why would I call a service based in Ohio to tell me about local contractors?” Looking good on paper — or not being polished in person, for that matter — has little bearing on the actual remodeling experience, she says. “I can tell a homeowner, ‘This guy is upstanding. He has hair down to his arm and one eye that wanders and he drives a beat-up truck, but there's no need to worry when he knocks on your door.'”
Selko knows each of the four dozen or so contractors currently listed with Urban Referrals. Besides checking their references, licensing, bonding, and insurance, she meets them all personally and follows up on every lead and every project. She then sends only leads remodelers are likely to want and prepares the homeowner to talk business. “I'll say, ‘This is what your average kitchen in D.C. will cost'” and suggest “things they should do before they talk to the contractor, to make best use of everyone's time.”
In another twist, Selko typically gives homeowners just one remodeler's name. “I think if you set up two, three, four meetings, it's confusing to the homeowner, and the contractor feels you might not be serious.” This laser-like focus gets results, she says. “Some of my remodelers have completed 50 jobs for my clients.”
To find an HRN in your area, visit Cohen's Web site, www.homereferralbiz.com.