Matthew Slutsky co-founder of real estate new site & resource BuzzBuzzHome shares with us their 2017 plans to allow buyers to purchase pre-construction condos online with their credit cards.
BuzzBuzzHome covers real estate and developments across many cities including Toronto, New York, Miami. Boston, Chicago, Los Angeles, San Francisco and more.
Davelle: On today’s episode we have Matthew Slutsky, co-founder and president of BuzzBuzzHome Corp. Welcome to the show Matthew, can you tell our listeners a little bit about BuzzBuzzHome?
Matthew Slutsky: Yeah, for sure, thanks for having me on the show. BuzzBuzzHome is North America’s largest on-line listing of all new residential developments. Basically, we’re like MLS but only for new construction so new condos, new town homes, new sub-divisions and essentially that’s what we do where BuzzBuzzHome is a listing of everything new in the marketplace.
Davelle: Cool, but you obviously have a cool news aspect of it as well too because that’s certainly that’s one of the reasons why I go to your site quite regularly is to read the interesting articles you’ve got about real estate.
Matthew Slutsky: Yep, so we’ve got a great new site it’s at news.buzzbuzzhome.com, we have a team of about eight reporters on it and their goal is to report not just on new construction but on real estate, on tech, what’s going on in the real estate world, and really to be a kind of a [all out 00:01:34] leader and a news provider of real estate and what’s happening, it’s a great resource, people love it.
Davelle: Cool and I mean one of the things I’ve noticed is you guys have certainly been expanding into a number of different cities. Which cities are you in now?
Matthew Slutsky: So, we started out in downtown Toronto, and my background’s land development and we kind of got our toes wet in downtown Toronto, that was about six years ago, we expanded across Ontario, we started getting calls from builders in Vancouver saying that what we’re doing is really lacking in the Vancouver marketplace so we opened up an office there and sort of take over the Vancouver market. Then we started filling in between Ontario and Vancouver and started going all the way down to both oceans and about three years ago we started expanding into the US, so we opened up an office in New York and we now are across all of Canada, New York, San Francisco, Seattle, Chicago, San Diego, Florida, Texas, I think we’re in about 10 major US regions.
Davelle: Geez, that’s amazing, it sounds like you’re about to take over the world, what’s next?
Matthew Slutsky: That’s our plan, world domination is our plan, you know the reality is that new construction has been kind of a forgotten aspect on-line worldwide. There are a few players in … Some in Russia, some in Australia but generally speaking that there really is no great … India actually has some really good ones as well, but there is no dominant global player listing all new residential construction.
Typically on the real estate side companies that try and enter the market go after where the commission is, so they go after the resale side first and from resale they might start looking into rental but very rarely do they actually enter on the new construction side. So it’s a niche that we found and have started to grow and ultimately we would like to be across the world, right now we’re pushing through the United States and we’re starting to launch a bunch of really cool new projects as well.
Davelle: Awesome, that sounds great. Now how did you get the idea to start BuzzBuzzHome?
Matthew Slutsky: I was in land development, my background is real estate and development, I did my undergraduate in urban studies at UofT, I did masters of science in University of Edinburgh both with a land development twist to them so obviously I wanted to be a builder. I worked for a company called Atria and worked my way up there then moved over to Diamante and worked my way up to VP of development at Diamante which is a luxury condo builder in the city and I just noticed this huge gap.
I noticed, you know, we were spending a fortune on print ads, signage, A-frames, yet we had a pretty awful website and the more I looked around most builders had an awful website yet I was starting to see the market change in that purchasers were starting their search on-line. Not only were they starting their search on-line but they really felt entitled to information and at the time most builders were reluctant to release any information. The kind of typical sales strategy was give them as little information as possible and try and lure them into the sales center.
Once they’re in the sales center, still don’t give them any information and listen to what their needs are and have the sales agent show them kind of one or two best plans that fit their needs. We were starting to see that the purchasers weren’t interested in that, they wanted to go on-line and they wanted to get all the information possible on-line.
So, I left Diamante and started what’s become BuzzBuzzHome, I started with my partner Cliff Peskin, he was running a company called Nutrition in Motion, which he ended up selling to a US company. He had a great kind of … Built a great technical background or he led the team that built a great technical background in that company, so we partnered up and launched what’s become BuzzBuzzHome.
Davelle: Cool, that sounds awesome. Where will you take your brand next, what’s next for BuzzBuzzHome?
Matthew Slutsky: So we’re working on … We’ve got quite a few projects on the go right now, our most interesting is what we call BuyNow and essentially BuzzBuzzHome currently in it’s current state is a discovery site so purchasers can come onto BuzzBuzzHome, they can either search a neighborhood or development name or by builder or by intersection, find the development they’re interested in and find out all the information on that development and contact the sales center directly through BuzzBuzzHome. Say I’m interested in the one bedroom south facing blah blah blah blah blah, so it’s pure discovery. What BuyNow does is it turns BuzzBuzzHome from a pure discovery site into an on-line marketplace so we feel that we’ll be the first really viable on-line marketplace for real estate in North America.
The reason it’s so exciting is everything has been turned into marketplaces, on-line marketplaces, whether you’re looking to buy shoes, you’re looking to buy groceries, you’re looking to buy anything you can buy it on-line. Real estate’s the one area that no one’s really been able to crack yet.
Matthew Slutsky: One of the key reasons that no one’s been able to crack it is because again these companies are typically dealing in resale and I think one day you will be able to sell resale on-line but currently if you’re buying resale, you can go to the house, you can bring your spouse to the house, you bring a contract to the house, you can feel it, you can touch it. With new construction and pre-construction nothing’s built yet. So you’re either going into a sales center and just getting a pure, hard sell or you’re doing your research on-line but there’s nothing real to feel. A sales center might have a model suite but that model suite isn’t the model that you’re getting most likely.
Matthew Slutsky: It’s probably upgraded beyond belief so what you’re feeling and touching isn’t even what you’d be getting so we feel that there’s a real opportunity to sell new construction on-line. So, we’re changing BuzzBuzzHome from a discovery into a marketplace and with that we’ve had to do, one of the most challenging parts is, we’ve actually had to build a huge inventory management system for builders to be able to power the BuyNow system.
For the past two years we’ve been working on this inventory management system because believe it or not builders still to this day are managing hundreds of millions of dollars worth of inventory using basic excel sheets. It’s true and you go into any sales center and you can see that their sales matrix is all based on excel sheets so building this cloud based inventory management system is kind of the foundation to be able to allow for the BuyNow system to work because it will actually connect BuzzBuzzHome to the inventory and allow the sale to happen.
Another really cool aspect of BuyNow is Daypack the information management system isn’t just an information management system but it’s also works as a POS. This actually powers their sales, so whether you’re on BuzzBuzzHome, on the builder’s website or in their own sales centers, the actually deal is being done on-line through the POS system, which is a huge time savings to the process. No longer does the sales agent need to be running from the sales floor to the backroom, printing out five copies of 600 page deals, getting them signed, returning them, mailing them around, it’s all going to be handled through our on-line system.
Davelle: So does that mean that people will literally plunk down, they’ll go on-line, research the information they need and then plunk down a credit card to purchase that particular condo?
Matthew Slutsky: Correct, they won’t be putting down obviously the full amount of the sale on the credit card, what they’ll be doing is putting down the initial $5000 dollar deposit on their credit card and that $5000 dollar deposit goes directly to the trust account for the builder because of the rescission period, you know in Ontario it’s a 10 day rescission and in BC it’s a seven day but during that rescission period you can cancel the deal at any time. So that initial $5000 dollars is what goes down through the on-line system and then after that, typical checks is required for the further deposits.
Davelle: Okay, it’s funny that was going to be my next question, does it continue just being charged to your credit card or it’s okay checks, for the deposit?
Matthew Slutsky: It would be amazing for points but most people’s credit cards can’t handle that balance.
Davelle: Wow, and so was it difficult to get builders on board with something like this or were they all open to it?
Matthew Slutsky: It’s pretty amazing, builders … We haven’t launched it yet but pretty much every builder that we talk to is super excited for it, one that they’re getting sick of the basic excel sheets that often contain a lot of errors and they actually end up losing money when there are errors on there.
Matthew Slutsky: Two, they’re excited … Sales centers right now are typically closed on Fridays, open from 10:00 a.m. until 6:00 p.m. on Saturday through Thursdays and that’s when deals happen but this allows for a 24 hour sales cycle. So BuzzBuzzHome can actually act as a 24 hour sales center for these developments so you could be … A builder could be waking up at 7:00 a.m. and have done three or four deals in the middle of the night. Everybody’s schedules these days are different and the typical 10 to 6 doesn’t work for most people.
Builders are really excited for that, they’re really excited to get rid of the inefficiencies in sales centers. The amount of time wasted, the amount of resources wasted on just getting these deals back and forth between themselves, the purchasers, their lawyers, there’s huge inefficiencies there, so they’re excited to alleviate that. It looks like the market’s really ready for it and builders are calling us almost daily asking when it’s going to be ready because they want to start using it.
Davelle: Of course because they want to let all those foreign buyers to be able to buy on-line. I bet you that’s really what they’re excited about I think is that the fact that they foreign buyers will have easier access to their inventory.
Matthew Slutsky: There’s no doubt that foreign buyers will have easier access to inventory, currently they’re able … On BuzzBuzzHome as it currently is, foreign investors are currently able to access that inventory they’re just not able to purchase it so there’s definitely that aspect but the whole process in general they’re excited for.
Davelle: Interesting and so how does the paperwork work then? So, I go on-line, I plunk down my $5000 dollar deposit for a condo, during that 10 day rescission period how does my lawyer get access to all the documents that they need to go through?
Matthew Slutsky: It’s all an automated process so really kind of the high level in a nutshell, you go onto BuzzBuzzHome or wherever the transaction happens, you get the purchase of sale, you sign in all the places that is required, we have to deal with the FINTRAC requirements so you have upload a copy of your driver’s license and all that information then you put in your credit card information for the deposit, all of that then gets sent to the developer, the developer needs to sign off on it. Once he signs off on it, or she signs off on it, the executed copies get sent back to the purchaser with the condominium docs and then they have to log back into the system to confirm that they received all the condo docs, then it’s in their possession to be able to send to their lawyer.
Davelle: Wow, that’s cool, that’s amazing and have you gotten any pushback from people at all?
Matthew Slutsky: No, the push back has been you know there’s some people who say the market’s not ready for it or this is going to allow for people to make just rash decisions when they’re purchasing, you know they’re purchasing a $500,000 dollar home, they’re just going to be doing it kind of on the fly without having done their research, but the opposite is really true and through BuzzBuzzHome from what we’ve seen is people are doing even more research than they’ve ever done because until now, until BuzzBuzzHome was launched, there was zero transparency in the market.
Matthew Slutsky: We allowed people to start to be able to compare from their home other projects, you know BuzzBuzzHome has a listing of every development with up-to-date information so purchasers now, they may have purchased the one spot not even knowing that a new condo was launching a few months later nextdoor. So purchasers now can compare pricing, they can compare floor plans, they can see what’s launching, they can read about it through our news site and they can ask questions about the development. We have builder reviews so that purchasers can actually read reviews on builders or submit their own reviews so they’re a lot more knowledgeable now than they ever have been through our system.
Davelle: Wow, that’s amazing, that’s pretty impressive. What else are you guys going to do next? Is there’s anything else that you can do next after that?
Matthew Slutsky: Well, the big one is the move to a marketplace, that’s our huge push right now, that plus expansion. We’re also working on a lot of really cool little things, one example is we’re working on turning every floor plan on BuzzBuzzHome into a 3D model or 3D dollhouse of the floor plan.
Matthew Slutsky: Yeah, so since for eternity when you’ve been buying new you get a 2D floor plan, we don’t believe that purchasers fully understand 2D floor plans. Realtors who are in the business understand the 2D floor plan, investors who purchase a lot of units they understand the 2D floor plan but a typical end-user sees a 2D floor plan and they’re not able to figure out how the unit works, how they can walk through the unit.
Matthew Slutsky: So what we’ve tried to do is figure out an algorithm that can take a pdf of a 2D floor plan and immediately turn it into a 3D version with furniture so that’s really exciting. We’re experimenting with it right now, Pinnacle’s been using it, Mintos’ been using it, Citizen’s been using it and they’ve had huge success with purchasers saying they actually understand how these floor plans work.
Davelle: Wow, that’s awesome.
Matthew Slutsky: Yeah, so it’s really exciting so we’ve figured out how to automate about 60 to 70% of it, the last kind of 30 to 40% still needs human intervention but with every new test case that we take on, we’re starting to get better and better and further automating it. So, BuzzBuzzHome has probably 600, 700 thousand floor plans listed on our site, it will be really exciting when all of those can continuously be converted into 3D.
Davelle: Absolutely, and so when will this program launch, the program of being able to purchase on-line of a pre-construction project?
Matthew Slutsky: We’re looking for 2017.
Davelle: Ah, okay, so still a ways to go but you’re very close to launching.
Matthew Slutsky: Yeah, we’re close to launching, we’re in the final phase of the inventory management system, we have a few builders starting to test it out and the actual BuyNow process is currently being developed.
Matthew Slutsky: So, we’re getting very close which is really exciting.
Davelle: Awesome and have you ever purchased a pre-construction condo yourself, is it part of an experience that you’ve had as well?
Matthew Slutsky: Yes, both as a residence and as an investment.
Davelle: Cool, and so is it obviously-
Matthew Slutsky: Yeah, so I know the pains of it, first hand.
Davelle: So where in the city do you live?
Matthew Slutsky: Bathurst and Eglinton.
Davelle: Okay, cool, and do you rent, or own, or what?
Matthew Slutsky: We own, we actually just purchased our new house, which is actually a hundred year old house and we moved from St. Clair and Christie which is an incredible neighborhood but we’ve kind of always owned and we started out with a condo moved to a semi-detached, now in a fully detached. My wife and I both really believe in the Toronto market and think it’s going to continue to grow so there’s kind of the investment angle but then there’s also the home ownership angle. I just believe in owning my home and my land and if I’m going to be putting money into something, I want it to be something that I own so I’m reaping the benefits.
Davelle: Perfect, that sounds awesome, I’m a keen believer myself. Thank you so much for speaking with us today Matthew. Matthew where can our listeners find you or find your BuzzBuzzHome site?
Matthew Slutsky: So they can find BuzzBuzzHome at buzzbuzzhome.com or on Twitter @buzzbuzzhome, on Facebook at facebook.com/buzzbuzzhome, pretty much anywhere where you can put a BuzzBuzzHome on the end, we can be found there and myself, you can find me on Twitter anytime @islutsky, “i” as in letter “i”.
Davelle: Awesome, thanks a lot for speaking with us today Matthew, it’s been great having you.
Matthew Slutsky: Than you very much for having me.
Davelle: Thanks everybody for listening and you can find me at email@example.com or at Twitter @davellemorrison or on Instagram @davellemorrision. Thanks everyone for listening, bye for now.