Sawbuck Realty’s website states that the company is managed by it’s founders: Steve Barnes and Guy Wolcott.  Guy Wolcott commented on Title-opoly last night after a lively day of readers’ remarks about his company’s unusual business model.  It turns out that Barnes and Wolcott own a mortgage company, but direct orders to a national lender that can offer a broad range of benefits to consumers.   It appears that I was incorrect when assuming that Sawbuck is a lead generator for an affiliated mortgage company.   In his comment, Wolcott was emphatic about avoiding any appearance of impropriety.

Sawbuck is in the business of earning commission referrals by providing qualified buyers (leads) to a network of trusted real estate agents. 

Sawbuck recommends local title companies that share a vision of creating new opportunities for consumers demanding transparency.

Networked business derived from shared values among services providers isn’t the same thing as affiliated business even though the model is dependent upon directed orders.  The difference lies in the fact that consumers knowingly make choices.  Many of you were concerned that Sawbuck’s preferred title companies were undercharging for their services.  The model is geo-specific and works due to a combination of high property values and favorable title insurance premiums in the DC, VA, MD area.  The concept may not work in your specific market.

I stand firm in my resolve to expose title agents to the ingenious, and compliant, models that are starting to appear.  It’s my strong opinion that the title company of tomorrow will depend wholly on internet models that cast a wide net to produce local customers with highly defined opinions concerning settlement service providers.  Enter generation “x” and generation “y” as the baby boomers lose their dominance as the industry’s primary source of business.

Guy Wolcott’s comment on Title-opoly:

Ed, thanks for your thoughts on our new venture. It is always interesting to hear how people from each industry we touch (real estate, mortgage, title, technology) feel about what we are doing.

To be clear, even though the founders also own a mortgage company, Sawbuck does not refer business to it (both to enable us to scale up, and to avoid any misperceptions about how we make money). Instead, we partered with a national lender and work with their local retail operation. For our buyers, we’ve negotiated a below-market rate with no closing costs. In fact, we subsidize every loan (the opposite of making money).

On the settlement side, we work with local title companies who agree to our “rules” — no fees, no markups, default to standard coverage. We have no ownership interest in any title company, and have no ABAs. But since no one is used to a real estate company negotiating FOR the buyer, it takes a while for what we are doing to sink in.

Sawbuck ONLY makes money from real estate. After working with them during the early “search” phase, we refer our buyers to top local agents/teams we have identified in each community. We don’t charge agents to be our partner, and don’t charge for “leads”. We get paid our referral fee only when a qualified buyer meets a good agent and successfully buys a house. (Then we take a significant portion of that fee and plow it back into the mortgage subsidy.)

Our idea is that commissions are big enough to support a variety of benefits to buyers. Our goal is to turn the molehill of our referral fee into a mountain of savings for the buyer.

… interfaced order pipelines.

An excerpt from The future of order entry:

“What if you, as a lender, could take the existing platform you have and submit the order electronically to a Title Company … free of charge. Once that order is submitted, the information automatically imports into the Title Company’s system and the order is opened.”

Scott Perry, Pennsylvania abstractor and occasional commenter on this site, has launched an Active Rain blog titled Bossman’s Blog.  In a very short time, Scott has provided volumes of great advice to a growing number of regular readers.

Active Rain is an on-line community of real estate professionals who strive to educate and motive each other.  Currently the site has well over 69,000 members and is expanding at an explosive rate.  It’s a legitimate cultural phenomena and a significant marketing opportunity for title agents with initiative. 

Scott’s decision to participate in the forum as an abstractor is a remarkable development that can produce only positive results.   As an industry, we need to become completely transparent.  We need to take everything that we know and put it online as quickly as possible.  The industry has created many of its own problems by allowing itself to be misunderstood for so long.  While it could be said that very few people understand title insurance and the work-product of title companies, even fewer have a clue about abstracting.

Scott’s blog holds the potential to educate untold numbers of real estate agents, loan officers, and consumers.  As long as Scott continues to write consistently, readers, when feasible, will insist that he search the titles to the orders they refer.  People will come to know Scott and to trust him.  More importantly, sources of business everywhere will eventually insist on locally prepared abstracts due to Scott’s blogging efforts and the similar efforts of others who are certain to follow.

Blogging is the future of title company marketing!  It’s time to get started!

A title company can’t afford to take anything for granted in 2008.  Screw up the smallest detail of a single deal and one real estate agent or another will blog to destroy your credibility … possibly forever.  Everything matters and everybody is connected to each other.

Title companies with static websites, or worse still - no web presence at all, are doomed unless they quickly decide to evolve beyond the stone age.  Meaningful interaction is the key element of successful transaction management. I’m not talking about phone conversations.   Even the most localized title company, or law office that does closings, has regular contact with sophisticated lending sources or REO asset managers who expect and demand constant attention. 

The age of instant, effective communication presents a formidable challenge for an industry that’s selectively primitive, at at least among its rank and file, in its response to technology.

Being “wired” means that you know what’s going on.  Being “wired” means that others know that you know what’s going on.  Being “wired” means that relevant information is available 24/7 to those who need it.  Being “wired” means that you’re accountable.

Title insurers are “wired.”  The largest title companies are “wired.”  These guys use interactive technology to grab deals that would have been yours in the past.  It might be said that an elite class of “technological titleorate” has emerged leaving the vast majority of title companies behind to compete for the “long tail” of title orders.

The development of proprietary software for internet application is an expensive proposition, but there are inexpensive steps that you can take to begin the process of becoming truly engaged.  For starters, you need to upgrade to a “smart phone” if you haven’t already done so.  Some “smart phones” lend themselves more to recreational use than pure business application.  I suggest that you take a serious look at the Treo for a number of reasons.  The device offers direct integration with Microsoft products.   You can access your Word documents, Excel spreadsheets, PowerPoint presentations, or your emails at anytime.  Blackberry offers similar advantages with the purchase of third party software.  The phones can also be used as MP3 players and take decent photos.  We’re talking serious business application coupled with serious convenience and cost effectiveness.

You can no longer afford to lock your office door and leave your business unattended.  It’s likely that your connected in some way to someone working from a different time zone or even a different continent.  A “smart phone” gives you constant access to emails and the ability to respond as appropriate. 

Successful businesspeople, title people included, are fanatical about the connectedness that technology offers. 

Being “wired” means that you’re fanatical about engaging with consumers and other service providers. 

Being “wired” means that you’re fanatical about business.