The practical file

Recently I helped some bright young Internet-savvy clients buy their first home.  And, of course, throughout the home-buying process these buyers used the Internet to find likely-looking homes.  As far as I know, that's all they used the Internet for, which was probably for the best.  Because there's an amazing amount of misinformation about real estate on the 'net, something I've mentioned once or twice on this site.

The home they ended up buying was relatively inexpensive and, like all homes in their price range, has plenty of deferred maintenance, in this case thoroughly documented by five inspections.  By far the biggest, or at least most noticeable, maintenance item was a dip in the floor running the entire width of the house.  You felt it right after you walked through the front door, and I'm sure it scared off many an agent and homebuyer from this otherwise appealing home. 

Yes, aside from the dip, the house had lots going for it—it looked like Hurst Castle compared to what else we'd seen—and I suggested to my clients that they tie it up long enough to find out how serious a problem it was.  I cautioned that while I was no foundation expert, experience told me that seemingly scary but easily fixable foundation damage isn't at all uncommon, especially in homes built before World War II.  Experience also told me that roller-coaster floors make most buyers run away screaming, which worked to my clients' advantage.

Not to get technical, but during inspections we discovered that the dip was caused by a framing component called a "girder" that supports the joists that support the floor.  At some point in this home's long and checkered maintenance history someone had replaced a section of this particular girder with a piece that didn't match what remained of the old one, and the floor, unsupported at that point, had sagged.  The foundation itself had no cracks or other signs of distress, quite unusual for an eighty-year-old foundation in an area known for expansive soils.  The fix wasn't something a week-end warrior could tackle, but it wasn't a huge project either. 

So we were told. 

I encouraged the buyers to get an estimate for the work, they declined, we totaled the many known costs uncovered by those five inspections and proceeded to do some serious grinding on the seller, a bank.  Bank surprises everyone by giving buyers a generous credit toward closing costs, ecstatic buyers release contingencies and, a few weeks later, move into a home they could never have afforded even six months before, while agent rides off into the sunset with another heart-warming story under his belt.

So he thought.

Buyers immediately set about repairing their home on a limited budget, and one of the first things they address is, naturally, that dip in the floor.  Now, remember, these home owners are young, bright and Internet-savvy.  But they're also first-time homeowners without much experience finding and dealing with contractors.  So where do they look to find their contractor?  Right, online.  Just as I, twenty years ago when I was their age, would've looked in the Yellow Pages.  The glossy, credible-looking Web site of one foundation contractor stands out, just as twenty years ago a large, credible-looking Yellow Pages ad would have caught my eye.  My clients email a request for an estimate, then meet a company representative who seems extremely knowledgeable.  He sends them a detailed and, again, credible-looking "proposal and contract" with a price tag of...

$40,000.

$40,000? 

$40,000?!  As they told me, it was like getting kicked in the gut.

Naturally they call their agent.  I ask them to send me a copy, and when it arrives the first thing I notice is its length.  I'm used to getting proposals that, more often than not, are one step above something scrawled on the back of an envelope.  I'm a real estate agent, not a corporate facilities manager, and the vendors I deal with are usually fairly casual about this stuff.  This proposal, on the other hand, goes on and on, and much of it is legal boilerplate.  Here's a company that's big on minimizing its liability exposure.  Nothing wrong with that, of course—so is the real estate industry—but the real estate industry always learns the hard way.  Maybe this contractor did too?

I also notice that the job description doesn't mention any of the girders or supports the home inspector had said would do the job.  No, the scope of work of this proposal seems more appropriate to shoring up a medium-size dam than repairing a small single-family home...a small single-family home with what looks like a decent foundation...a small single-family home on level ground...a small single-family home in an area not known for unstable soils.  

I also notice that the contractor's sales rep claims the floor is buckling, not because of a mis-matched girder, but because poor drainage has supposedly eroded the soil around the house.  Furthermore, my clients tell me he claims that this erosion will seriously damage the home in a year or two.  Hey, no pressure!  Not only is this development new and shocking to my clients, it is to me too.  I know that poor drainage is common—almost every home inspection I've read mentions it—but I also know that, despite this, serious foundation problems are rare.  And I strongly suspect that every house in my buyers' neighborhood has had poor drainage for the past eighty-odd years without collapsing into a pile of rubble.

Not much adds up here.

Then I notice that the estimator, whom I'll call Earl, hasn't put his last name on the proposal.  Nor has he put any professional credentials—an engineer designation or contractor's license number, for example—on the proposal.  These omissions seem mighty casual on a proposal that otherwise looks like the latest in lawyerly thinking.  "Just call me Earl."  This suggests two things, neither encouraging.  First, Earl may have no credentials or license.  Second, Earl may have omitted his last name so that anyone wanting to check his credentials or license status on, say, the California State License Board Web site, can't.  I do a reverse look-up of his phone number and don't get any results, suggesting it's a cell. 

So what we seem to have here is a guy named Earl with a cell phone and maybe a pick-up truck. "Who sold you a $40k foundation?" "Oh, some guy named Earl."

At this point let me make a few wild guesses about what's going down here.  Earl isn't a contractor or engineer, just a "born salesman" who may have been selling blown-in insulation last year and Sears appliances the year before.  Earl is either a rep who works on straight commission, or he's bought a territory from the foundation contractor with the snappy Web site, which makes him either a franchisee or an independent contractor (using "contractor" not in the construction sense but in the sense that a temporary Google employee is an independent contractor).  His out-of-area phone number, not one but two area codes away, suggests that Earl's pick-up gets lots of miles put on it covering the entire Bay Area or even all of Northern California.  Training?  Maybe Earl got some, down at the contractor's headquarters hundreds of miles away, or maybe he just picked up the lingo on the job—much as I did when I started in real estate twenty years ago as an apartment maintenance supervisor who knew zip about maintenance.

And the snappy Web site that matched my clients with Earl?  Something about it strikes me as odd.  Then I realize:  it's all about the company's "method", which isn't novel—the construction techniques it touts are nothing new—and zero about the owner and crew.  Since the service the company sells is complex and far from cheap, you'd expect the site to tell us how courteous, experienced, well-trained, cheerful and obsequious the owner and crew are.  Which makes me wonder if this contractor doesn't sub-contract his work to local contractors (at least I hope they're contractors).  Which makes me wonder if there's anything more to this company than a snappy Web site. 

What about ol' no-last-names-please Earl?  At least Earl exists, right?  But if Earl doesn't have some kind of contractor credentials, you may never see him again once you sign on the dotted line.  And if he doesn't, you wouldn't want to anyway.

And what about the owner of the foundation company?  The CSLB site says he's licensed.  So what might we have here?  Maybe what we have is a Web site that turns old news into novelty, repackages ordinary ideas into leading edge, in other words, the worst sort of Web site.  Maybe what we have is one licensed general contractor, located hundreds of miles from the job site, represented locally by another guy virtually impossible to check out, who may or may not have credentials and who may or may not cost the owner one thin dime to employ—in fact, may be paying the owner a franchise fee for the right to prospect whatever leads the snappy Web site generates.  Maybe what we have is one guy with a cell phone and a pick-up truck who finds expensive foundation problems a competent home inspector—himself a licensed general contractor—doesn't.

What we might have here is someone who needs all the credibility the Internet can give him.  Which got me to thinking about the Internet.

Oh God no, you're thinking, not another rant against the 'net.  Honestly, folks, I like the Internet.  But I only like the Internet.  I don't love the Internet, unconditionally or otherwise.  I don't worship the Internet, unconsciously or otherwise.  And by now it's obvious that I don't much care for anyone who takes advantage of the bright people who check their skepticism at the door whenever they go online.

This willing suspension of disbelief, so similar to religious faith, happens whether consumers look online either for capital T truth or prosaic goods and services.  The Internet doesn't just give wacky ideas traction.  Products and service providers get a boost as well.  How?  Partly the credibility comes from the buzz of a still-new medium, partly from the halo effect of ten-plus years of unrelenting "this changes everything" salesmanship, partly from the real advantages the Internet offers both consumers and advertisers but mostly, I suspect, because the 'net has woven itself into the very fabric of the lives of a very large group of consumers.  The Internet is as natural to them as breathing, and as uncritically accepted.  It's always been there, by their side, an enviable place for any medium to be.

The perceived credibility of anything Internet reminds me of those bright red "As Advertised on TV" labels that used to appear on product packaging.  "As Advertised on TV" hitched a ride on the credibility of a then-new yet increasingly omnipresent, miraculous and mesmerizing medium, or at least on the premise that any business with enough marketing dollars to peddle its products on TV must be credible, which meant that whatever schlock it sold must be really good schlock.

There should be a monument, inscribed with a suitably heroic quote from Byron or Steve Jobs, to the journalist, academic or, most likely, early dot-com marketing type/pioneer Digital Age Guru who coined and sold the public the term "Internet Empowered Consumer", because it's a stroke of marketing genius that makes "As Advertised on TV" look positively amateurish.    While potentially just as self-serving, the Internet Empowered Consumer marketing blitz blew the loud-sports-coat hucksterism of "As Advertised on TV" out of its back-room cubicle, past the marketing dead-end of "As Advertised on the Internet" which, given the 'net's vaunted accessibility, would have only made everyone laugh, straight into the fancy corner office of bleeding-edge consumer revolution, feel-good social trend and self-congratulatory social phenomenon.

Not only did Internet Empowered Consumer give us consumers the affirmation we wanted—"hey, suddenly I feel smarter"—it also let the Internet award itself its own Good Housekeeping Seal of Approval.  Of course, there's absolutely no doubt that the Internet gives consumers access to a much broader range of ideas, goods and services.  But what very few consumers understand is that this empowerment machine runs just as well in reverse:  it gives idea-peddlers and goods- and service-providers access to a much broader range of consumers, and at a bargain price.

Take it from me, a Web site is dirt cheap compared to any other advertising medium with the same coverage.  You get a world-wide presence, whether you need one or not, for the price of a tiny ad in a three-city edition of the Yellow Pages.  That's a huge advantage for any advertiser, even one doing business in just a handful of cities.  For one working county-wide or in several counties or throughout a region or state or in several states or across the country or around the globe, a Web site is the original screaming deal.  The Internet delivers atomic bomb-like bang for the price of a party favor.

So for once, the Internet lives up to its "this changes everything" hype, although not in quite the way the consumer envisions.  

When I first got into real estate, back in the horse-and-buggy days before Internet empowerment, I quickly learned that the worst way to find a vendor was to look in the Yellow Pages.  Not that reliable vendors don't advertise there, but the Yellow Pages was a triumph of that relatively new, impersonal and constantly-evolving concept, mass marketing, over that older, interpersonal and relatively static concept, word of mouth.  Gradually I realized that a recommendation conveyed through the old-fashioned medium of speech, either by a consumer I knew or a real estate professional I trusted, was far more likely to have a successful outcome.

And, in fact, an old-fashioned referral from an agent got me hooked me up with another foundation contractor, one with a whole lot more on the ball than a cell phone and a pick-up, who took that dip out of the floor for $7500.  He even threw in a few freebies that weren't in the contract.  My clients think he's great.

Looks like the Internet may have replaced the Yellow Pages. 

At this point two thoughts may occur to you.  First, John, it's not the Internet's fault if everyone involved with that Web site turns out to be mildly sleazy.  After all, like you said, there's trouble lurking in the Yellow Pages too.

To which I would respond:  that's my point.  Strip the Internet of its mystical trappings and all you have is another advertising medium, open to good guys as well as bad, to saints, cranks and sinners alike.  (Besides, I don't remember the Yellow Pages claiming it created authentic community.)  And because the 'net's entry costs are so low, you risk finding even more cranks and sinners there than in other, more expensive media.  In fact, as you'll recall, keeping the riff-raff out was the implied endorsement behind "As Advertised On TV".

Your second thought might be:  John, when you claim that any crank or sinner is welcome on the Internet aren't you, uh, shooting yourself in the foot?  I notice you have a Web site too.  So which one are you?

To which I would respond:  Security! 

But before you're dragged from the building, let me tell you that the reason professional communication deceives so easily, in any medium, new or old, is because it's so carefully impersonal and selective.  The slick presentation, whether it's a TV spot or Web site, reveals of its subject only what skilled and mercenary professionals chose to reveal, which means that the more there is to reveal, the less likely it will be.  The amateur's Web site or blog, on the other hand, not cranked out by disciplined copywriters and lawyers but slapped together by the terribly earnest and obsessed, is communication at its most transparent—whether it wants to be or not. 

In other words, it's hard for us amateurs to fake this stuff, especially week after week.

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