The sales rep, who asked to remain anonymous because of a confidentiality agreement with The Dallas Morning News, decided to “pursue other options” after A.H. Belo announced it’s funding of an online real estate brokerage (Sawbuck Realty) from the dallasnews.com website.

“I feel they screwed over us — the account executives — because they screwed over our clients,” said the sales rep.

The source explained that while times had been tough for the past year — they hadn’t received a commission check since 2008 — bringing in and openly siding with an outside competitor like Sawbuck Realty would make it nearly impossible to sell real estate ads.

“All my clients are going to abandon ship soon,” said the sales rep.

Knowing this move wouldn’t sit well with their top real estate advertisers, in late June A.H. Belo sent a representative from Belo Interactive Media to their top five clients (Briggs-Freeman, Allie Beth Allman and Associates, Coldwell Banker, Dave-Perry Miller and Associates, and Ebby Halliday Realtors) to give them an idea of what was coming, according to the sales rep and an official at Belo Interactive Media.

These brokerages had bought at least $500,000 or more in advertising over the past year. The brokers didn’t exactly jump for joy when they heard the news from A.H. Belo, according to the sales rep,.

“A.H. Belo doesn’t care. They know there is going to be collateral damage and they are doing their best to keep the damage at a minimum,” said the sales rep.

A.H. Belo and The Morning News are banking on the future of the dallasnews.com website as a “life engine” and they see ad sales online and in print as something that can no longer carry the financial load, the sales rep said.

“Dallasnews.com is trying to make itself not just a news information site, but also a marketplace. A life engine where people can go and shop. This is the future,” said the sales rep.

The next logical question is can traffic to the “home center” portion of dallasnews.com make the $2 million investment in Sawbuck Realty worthwhile? We already know that Sawbuck Realty (and in turn A.H. Belo) gets 30 percent off the top of every commission (from the buying agent) that comes from a successful sales lead. The majority of those commissions will more than likely come from a pool of potential home buyers who visit the “home center” looking for a home.

When it comes to unique visitors, the “home center” gets an average of about 65,000 unique visitors a month, according to Chewy Redding, Belo Interactive Media’s product manager.

This represents about 4.3 percent of the total number of unique visitors who travel to the dallasnews.com home page each month looking for news (I was told they’ve been averaging somewhere in the ballpark of about 1.5 million unique visitors a month during the A.H. Belo/Sawbuck Realty conference call).

How does this all play out in the future? No one knows for sure, but it’s a safe bet that dallasnews.com will take more steps to head in the “life engine” direction as ad sales online and in print continue to diminish and consumers get more comfortable with making big transactions online.

Just to warn you the quality of the audio ain’t great. Due to some extenuating circumstances I was participating via my iPhone on speaker phone setting so my recorder could pick up the conversation. If it sounds like I’m shouting in your ears I sincerely apologize.

If you want the quick summary of the A.H. Belo/Sawbuck deal here it is:

- A.H. Belo has invested $2 million in Sawbuck Realty.

- Sawbuck’s site will become the new face of the “Home Center” portion of The Dallas Morning News Web site.

- Clients who contact Sawbuck Realty to enquire about a home for sale will eventually be put in touch with a local “partner” agent who will show them the home and represent them as the buyer’s agent.

- If a home is sold via a lead from Sawbuck, Sawbuck will take 30 percent off the top of the 3 percent buyer’s agent  commission.

- A.H. Belo will not directly receive proceeeds from these commissions, but they do have a stake in the company.

- Partner agents will be determined based on experience and other criteria set by Sawbuck. (I’ve heard five years experience and and at least 50 sales over the last five years.)

- A.H. Belo will continue to pursue traditional forms of ad revenue from real estate agents and brokerages. Good luck with that.

Click here to play the conference call

A.H. Belo Corporation, publisher of The Dallas Morning News, is investing in Sawbuck Realty, an online real estate broker that will bring its services this year into A.H. Belo’s territories in Southern California, Rhode Island and North Texas.

Sawbuck is expected to announce today that A.H. Belo has joined Sawbuck’s two co-founders, Guy Wolcott and Steve Barnes, in a $2 million round of investment in the young company. The individual contributions were not disclosed.

I’m in a conference call with A.H. Belo and Sawbuck Realty right now. As soon as it’s done we’ll get you audio from that call. Until then, jump for the interesting part of the DMN story:

As a real estate broker, Sawbuck will be able to list all Multiple Listing Service properties, [Chewy] Redding said. At present, visitors who go to dallasnews.com may see only 70 to 80 percent of the listings, he said.

He described the reaction from Dallas-Fort Worth area brokers briefed on the new arrangements as mixed.

Sawbuck refers any sales leads to agents or brokers locally in exchange for a 30 percent share of the commission. The Dallas Morning News will not share directly in that commission, although it would benefit indirectly from its investment in Sawbuck, Redding said.

The News will continue to sell advertising to local brokers and agents who want to enhance their listings with logos and contact information. In those cases, customers would contact that agent or broker directly, and Sawbuck would be bypassed.

“Our advertisers won’t see a lot of change when Sawbuck is on our site,” Redding said.

David R. Ellett, A.H. Belo senior vice president and president and general manager of Belo Interactive Media, said A.H. Belo’s investment is not huge, “but I think it is a strong signal that we believe that this is an enhancement to the real estate solution we bring to the market.”

In addition to search and referral, Sawbuck also touts lower mortgage rates and closing fees as part of its package of services.

Sawbuck’s business model serves consumers at the beginning of a transaction by offering an online, map-based search system for local listings — I mean all local listings, everything in the MLS — hence this new affiliation with The Dallas Morning News is, I suppose, going to take the MLS to the DMN website. Then Sawbuck refers the buyers to an agent in the company’s referral network, in our case, a Dallas agent. They take a referral fee of about 30% from every closed transaction. I guess, in this case, the DMN will take the fee. Looks like they are sending the agent a white hot lead: the company claims that 50% of leads become closings. And get this for drawing in consumers: Sawbuck is said to offer buyers a no-fee mortgage and settlement package, as well as all the property information online at the beginning of a search.  Sawbuck’s co-founder, Guy Woolcott, has said his company does a lot of work to qualify the buyers prior to sending that referral. Last year, here’s what he told Inman News:

“We’re actually contributing something to the deal,” Wolcott said. “We’re not just flipping (agents) a lead; we’re giving them a real buyer.”

The company offers live chat on its site so that consumers can ask questions without being connected to an agent and then choose to be connected when they are ready.

The agents that Sawbuck refers buyers to are hand-picked, and the company prefers to partner with experienced, top-producing agents who often are a part of a team, he said.”

My sources tell me they first heard about this Thursday when their giddy DMN ad reps paid them a visit, and they were shown a spiral notebook they had to return and keep very mum about the contents. The company launches Dallas August 1.

My head is swimming. This could be a brilliant partner$hip move on the part of the DMN – what is Belo’s stock symbol again? (Dialing broker now.)  They know that 95% of all real estate searches begin on line and online is where real estate is headed. Traditional brokerage models are antiquated — the cost of doing business never goes anywhere but up.

But gosh, how would you like to be a broker who has paid bazillions to advertise in the DMN all these years and now come to find them a competitor colleague?

I’ll bet there are going to be some meetings this week. Also, real estate laws vary from state to state. In Texas, brokers own the listings. I cannot see brokers paying the DMN 30% of their split. Many of the tip-top producers are pulling in close to 90% of that 3 per cent commission. And Sawbuck deals with first-time home buyers (the most high maintenance, to be honest) who are buying average-priced homes, say $150,000. The typical commision split is 6% — 3% to buyer’s agent, 3% to seller’s agent. Of that 3%, the newer agents are lucky to take home 1.5% — $4500 on a $150,000 home sale. Are you telling me that the DMN will get $1350 of that agent’s commission split?

On his company’s blog,  Sawbuck co-founder Guy Woolcott said that “79 out of every 100 adults in the USA is a real estate agent.”  Yet we know that a small percentage of those agents are making the really big bucks. (Most are making nothing at all.) He thinks one reason is the agents are paying more to outside sources for leads, presumably advertising. But at a recent social networking realtor seminar, agents were urged to dump direct-mail and newspaper advertising for the virtually free social networking. I also glean from my reading that Woolcott wants to attract the kind of high-producing agents who muscle the 90% split. Problem is, those agents are not selling to first-time, entry-level homebuyers.

Sharing MLS information usually goes over about as well as shaking someone’s hand and telling them oops, I have a staph infection. There are murmurs of uniting every state MLS into one giant entity. And as far as saving buyers money on title policies, title fees in Texas are set by Texas Department of Insurance. The free mortgage sounds neat — um, I’d like a definition of free — but I was with twenty North Dallas agents Friday for two hours and I heard horror story after horror story about the new pickiness of underwriters – requests for second appraisals at the last minute —  it’s all driving buyers crazy and killing many a deal.

But I’m intrigued. I’ve been waiting for this to happen in Dallas now for two years. There’s Redfin, Trulia, Zillow, ActiveRain, HomeGain (which I think is owned by a newspaper consortium that includes either Belo or A.H. Belo). The mission is to make listings and sales transactions as transparent as possible on line. Brokers here choose to share their information with the MLS — what if they decided not to share anymore? Where would Sawbuck get it’s listings? I’m sure the local brokers want to play nice, but will their agents like one more entity’s paws on their commissions? Fasten your seatbelts, folks, this is going to be a very interesting ride.

Update: Sawbuck would have testified at the Justice Dept vs. NAR/MLS lawsuit had it gone to trial.

Jones said he was inspired to create the contest in part because his friend owns the Austrian hotel. The other part would be the flood of homes on the market making it slightly harder than normal to find a buyer:

(It was) just something new and different. Typically the real estate community does wine and cheese parties and luncheons. I wanted to do something outside the norm…You just have to be creative in finding new ways to sell your product.

He’s hoping to get 20 to 30 agents to show up, but he admits the rain could hamper his efforts:

If it starts raining in real estate they don’t get out (of the car).

The buyer paired with the winning agent will also get the same package, however Jones said he expects a prospective buyer will want to pay for their own airfare rather than fly  for free in coach. Agents who show up today will also be included in a raffle for a $100 worth of NorthPark Gold. Contestants will have until May 1st to seal the deal, but my money is on Ben finding his winner sooner rather than later. Anyway, as soon as a winner is announced we’ll have the results posted here on DallasDirt.

Check out all these properties on Thursday, March 26 from 2 to 4 p.m, go find a buyer, and be a Bavarian king (or queen) for five lusty days:

3608 Lexington $8,950,000

3928 Centenary $3,395,000

4022 Shannon $3,495,000

4409 Arcady $4,195,000

4500 Lakeside (lot, former Bright home) $12,500,000

3932 Centenary $3,395,000

5027 Radbrook  $4,849,000

“It’s exhilarating to be back in sales,” says Missy. “I’m not a check collector.”

Since KW has offices across the country and even in Canada, Missy plans to have a referral part for Vail/Beaver Creek second home sales as well as her Dallas listings.

Have we?

Meantime, check out this letter to President Obama from Mortgages Unzipped: we need loans and we need them now.