Blog > Sawbuck Business

"It's 106 miles to Chicago, we’ve got a full tank of gas, half a pack of cigarrettes, it’s dark and we’re wearing shades."

We’ve been looking forward to our arrival in Chicago for some time now. Truthfully, we thought it would have happened much sooner—December isn’t really the hottest month for real estate in the Windy City. But here we are, live in Chicago tonight!

More than most markets, Chicago’s MLS gave our data team fits. Around every corner lurked a new, uh, challenge—an Opportunity to Excel, as my father would say. But our team hung in there, improved our technology, and patched the potholes in the MLS data/tools—once again, they’ve done a great job. We’ve added 638,000 new Chicagoland homes to our database, including 80,000 active listings and millions of photos.

Compared to other areas where Sawbuck operates and monitors market conditions, the Chicago market is somewhat sluggish. As a whole, the metro area has about 11 months of inventory—meaning that at the current rate of sales, it would take 11 months to sell all the homes currently on the market. For reference, Dallas has 8.5 months of inventory, Washington DC has 5 months and San Diego has just 4 months.

Some of this difference reflects the fact that the Chicago market has been nowhere near as volatile as those on the coasts (more like Dallas). Prices haven’t dropped here the way they have in Southern California, so buyers aren’t rushing in to pick up bargains. The inventory level is also partly caused by the time of year—in normal real estate markets in the US, inventory tends to build up toward the end of the year before being drawn down during the spring market.

In Chicago itself, some of the healthiest neighborhoods are: Auburn Gresham (5.4 months), Chicago Lawn (5.7) and Edgewater (6.5). Some of the least healthy: Kenwood (25.1), Avondale (18.3) and Grand Boulevard (15.7).

Outside the city, some of the healthiest markets: Romeoville (7.3 months), Schaumburg (7.4) and Oak Forest (6.7). Some of the least: Downers Grove (16.9 months), Prospect Heights (24.0) and Highland Park (24.1).

We’re excited to offer Chicago buyers and sellers access to the same data, tools and service we’ve become known for, starting with detailed market stats and real-time updates on every new listing, price change, contract and sale. Our Advisors and local agent partners are standing by, ready to help Chicagoans find the right home, a great agent and the best mortgage deal—guaranteed.

Our team is working hard to bring our site and benefits to more cities in the weeks ahead, including the Bay Area, Boston, Providence, Phoenix and Philly.

Tonight, we launched Sawbuck in San Diego.

For the past month, our developers have been overhauling the system we use to configure, download, store and reconcile data from so many different sources. As we’ve said before, every MLS has different data and different rules, and we try to make them all work together seamlessly. San Diego is our first new market since this overhaul, and has served as sort of a guinea pig. But these changes should allow us to add new markets more quickly—and stay current with data changes in existing markets more easily—as we move forward.

We’ve added approximately 130,000 San Diego area homes to our database, including 8,500 active listings and over a million photos. The second of these numbers is pretty remarkable. There are only 8,500 homes for sale in the entire San Diego metro area—and only 3,800 listed under $500,000. While prices have dropped considerably in the last two years, the market—especially for lower priced homes and condos—is incredibly tight.

As in other markets, we’re here to give buyers and sellers access to tons of useful data including detailed market stats and real-time updates on every new listing, price change, contract and sale. Our Advisors and local agent partners are standing by, ready to help San Diegoans find the right home, a great agent and the best mortgage deal—guaranteed.

We’re excited to extend our coverage in Southern California all the way to the border, and look forward to continued expansion in the fourth quarter—to the Bay Area, Chicago, Philadelphia and Boston.

Thanks to everyone on our hard-working team for another successful launch.

Dallas' own JR Ewing (AP Photo)

As the saying goes, everything is bigger in Texas...and now, so is Sawbuck!

Today, we launched our site and service in the Dallas-Fort Worth Metro Area.

For the last few weeks, we've been downloading, processing and storing millions of DFW data points. We've added 335,000 new homes to our database, including 47,000 active listings and 1,500,000 new pictures. Dallas users and customers can now take advantage of our real-time updates, including new listings, price changes, contracts and sales.

On the business side, we're ready to help Dallas buyers and sellers find great agents and get great deals on their mortgage and settlement. Every time we come to a new market, it is a real learning experience. Each state, each city and each MLS have their own unique rules and customs that combine to make real estate so very local.

We decided long ago to rely on the local expertise of top real estate agents and teams, rather than try to become expert--everywhere--ourselves. So far, this strategy has worked out well for Sawbuck and our customers alike, and we're excited to bring it to Dallas for the first time.

Last month, we launched in L.A.; today, we're live in Dallas. And we have major expansion plans for the remainder of 2009. If we aren't in your area now, you might be next. Stay tuned!

Last month, Sawbuck was named a finalist for an Inman Innovator Award for Most Innovative Brokerage. Inman News is the leading voice in real estate news, and the awards are given out annually at their Inman Connect conference in San Francisco. In 2006 and 2007, the winners in our category were gigantic brokers Remax and Coldwell Banker.

As you would think, we were really excited to be nominated. We're just getting started in this business, having launched only five months ago, and serving just one market so far (our home market of Washington, DC). Though we have big plans, and feel great about our consumer-friendly model of making buying or selling easier and less expensive, we didn't expect to really be on Inman's radar at this stage of the game.

But on Friday, a strange thing happened...we won!

The awards are the last order of business on the last day of the conference, and Most Innovative Brokerage is the very first category. I was sitting in a special little section at the front with the other finalists and stood up when they read our company names. When they announced the winner, to my surprise, our logo popped onto the giant screens and our name was called. I hopped up a few steps, shook Brad Inman's hand and walked away with a petite, but very nice (and dense) trophy of crystal and marble.

I was quite sure we were not going to win, so it was a most pleasant surprise. The representatives of the other finalists were super-gracious, and many people came up afterwards to congratulate me/us. Afterwards, I made sure to thank the folks from Inman, and let them know we would work hard over the next year to make sure they didn't regret their choice.

Hopefully, this unexpected award will help us as we grow, move into new markets and attract new agents and customers. While we're just getting started, we're onto something.

Yesterday, Sawbuck was named as one of five finalists for the Inman News 2008 Innovator Awards in the category of Most Innovative Brokerage. We thought we had a shot at being nominated, but were really excited to see it in print.

Inman is the real estate industry’s leading news organization; the awards will be presented at next month's Real Estate Connect conference in San Francisco. I'll be out there (I'm a speaker on a panel titled "Building a Brokerage Brand in a Web 2.0 World") to see who wins. My advanced statistical analysis tells me we have a 20% chance of winning, and the competition is stiff (especially from "alternative broker" poster-boy Redfin), so this probably as far as we go. But, as they say at the Oscars (usually with pursed lips), "it's an honor just to be nominated".

If nothing else, this is great validation for what we are doing. We are really trying to do something new, combining the Real Estate 2.0 ethos of free information, powerful online tools, transparency and savings through efficiency with the best of "traditional" real estate -- top local agents who know the neighborhoods and offer great, personal service. It is certainly gratifying to have our industry recognize us; but it's even better when regular people become Sawbuck devotees.

The five year dispute between the Justice Department and the National Association of Realtors is finally, mercifully, over. Predictably, both sides claimed victory, even though it’s hard to remember just what they were fighting about. But while one might assume that the market has moved beyond talk of “opt-outs” and “virtual office web sites,” this week’s settlement will shape the industry for years to come.
 
Real estate has crossed the Rubicon, never to go back.  Now all parties, with the court’s blessing, have sanctioned the rights of innovators and entrepreneurs to create new ways of doing business and accessing MLS listings. In the world of listings ("IDX" to real estate technology insiders), all brokers are now in the same boat -- traditional and alternative, online and bricks-and-mortar. For a given MLS, everyone can display the same listings, with the same level of detail, on their public web site. (Whether they choose to do so is another matter.)

The bigger change comes in new, uniform support for VOWs (Virtual Office Websites, the parts available to registered users). Innovative brokers are now free to provide buyers and sellers online tools and information that match (or exceed) those available to traditional agents at their desk. And now MLSs must make their data available to brokers who want to build a better mousetrap. Ultimately, this is good for everyone -- brokers, agents, buyers and sellers -- even if they don’t yet realize it.

In its news release, the Justice Department predicted that commissions would fall as a result of the settlement.  This assumes that the only new models our industry can create are “discount” models -- more do-it-yourself, less commission. But maybe what consumers want is more for their money, not less for less money? Maybe they like “traditional” local agents and just want to find a new way to work with them? Innovation, on a level playing field, will answer these questions.

At Sawbuck, we created an “alternative” model that preserves commissions and uses traditional local agents (only the best ones), yet gives buyers the information, tools and control they want, plus the financial incentive they require. We did this by attacking the “ancillary services” that have become brokers’ cash cow: mortgage and title.

This model has saved homebuyers thousands of dollars through our negotiated below-market mortgages (with no closing costs) plus our unique no-fee settlement. Our Realtor partners earn full commission, get high-quality buyers and happily pay our referral fee. Yet this consumer-friendly, agent-friendly model was disallowed by NAR’s original VOW policy. That’s why the Justice Department asked us to testify at the planned trial.

Now, we no longer have to put an asterisk in our business plan (*note: business model may become moot at any time). And I’ll bet the surety that comes from this settlement, and the level playing field it establishes, will launch a hundred new business plans.

We're excited to report that Sawbuck co-founder Guy Wolcott has been asked to participate as a speaker at the Real Estate Connect conference in San Francisco this summer.  He will participate in a session entitled "Building a Brokerage Brand in a Web 2.0 World."

This conference is the most prominent event in our industry.  Real Estate Connect has been described as "a gathering of the brightest minds in real estate and technology, who get together to tackle some of the most pressing issues facing the real estate industry."  Pretty lofty company.  Guy should fit right in!

Seriously, we're very honored to be participating and grateful that industry "insiders" are taking note of the unique Sawbuck business model.

It's finally here. For months, we have been working towards launching our business and site at the end of January, and we made it. It is a strange feeling to switch from keeping things under wraps to trying to tell everyone at once—a complete 180 in a single day.

Yesterday, we sent a preview link out to select members of the media, focusing on real estate, technology and DC-area business news outlets. We got a very good response to both the site and the business model, which was really gratifying. When you work on something new for the better part of a year, it is hard to keep perspective on it, despite constant attempts to challenge your own assumptions and previous thinking. So it is nice to see that after being in the bunker for a long time, our business makes sense to some real people who are seeing it for the first time.

Last night, one real estate technology blog got a little ahead of us and sent our press preview link out to the world. We'll forgive them since it was in the course of a pretty nice review of what we're doing. So last night, instead of the few dozen reporters, hundreds of visitors started showing up. Rather than one last decent night of sleep, we stayed up to be sure everything worked as planned. And to satisfy our curiosity about what people would do once they got there.

As expected, the big draw was our map-based home search. Some people used other pieces of functionality, or checked out the more texty bits of the site. But most people spent their time on the map—several for over an hour!

Today we will open the doors for real, and hope to see an even larger audience. It's a big shift to go from a secret to a real business in one day. We'll see how it goes.