In 2021 the housing market experienced unprecedented demand as waves of home buyers looked to expand their square footage in the wake of COVID-19’s work-from-home orders, and take advantage of historically low interest rates. With increased demand came increased home values – which meant sellers were now paying a premium to sell their homes.
Despite the fact that the cost of listing a home hasn’t really changed – especially thanks to modern efficiencies and technologies – brokerages have comfortably padded their coffers with thousands of dollars in additional profit from each and every client they deal with. That’s money home sellers could be putting toward their next home, renovations, or even just a family vacation. And this is nothing new.
For decades, residential real estate brokerages have enjoyed enormous profits while providing a poor, inconsistent customer experience and little value, simply because consumers lacked options.
Houwzer, a modern real estate and mortgage brokerage, is offering consumers a better alternative by saving home sellers an average of $15,000 and providing home buyers a pressure-free experience with their full service, salaried agents.
Mike Maher, Houwzer’s Co-Founder and CEO, had grown tired of seeing the traditional brokerage model consistently fail home buyers and sellers.
“My wife and I started flipping houses and became frustrated by paying a 3% listing fee,” Maher says. “Websites like Zillow had greatly reduced the cost and time listing agents spent marketing properties, yet the industry hadn’t adjusted its pricing because it benefited them.”
“At the same time, my friends complained about the pressure they felt from their commission-based agents who were incentivized to quickly find them a home at the top of their budget. I realized that a 100% commissioned-based agent’s goals weren’t aligned with the home buyer’s goals of methodically finding the right home for them.”
It was time to change the real estate industry for the consumer.
In seven years, Houwzer’s team of salaried agents have guided clients on the east coast through over 4,000 real estate transactions, already saving home sellers $40 million in unnecessary listing commissions.
First, they slashed thousands off the cost of selling a home.
It’s no secret that selling a home in a heated market comes with additional challenges, and it’s in these conditions that Houwzer’s innovative model truly shines. The rising cost of homes may mean more profit, yet sellers have to fork over even more in commission fees when they work with a traditional brokerage.
In a typical real estate transaction, the seller pays a steep 6% of their home’s selling price in commissions – 3% to their listing agent and 3% to the buyer’s agent. When you sell with Houwzer, you only pay their full-service listing agents a flat $5,000 fee, plus 2.5% to the buyer’s agent at closing. That’s a savings of $16,000 on a $600,000 home.
Maher is adamant that Houwzer doesn’t skimp on the quality of their service to cut costs, a claim their clients heartily support.
“Candidly it boggles the mind why everyone isn’t listing with Houwzer – they will Uberize the brokerage business,” says Tom, a past listing client. “You have no concern of ‘getting less’ from their listing model. The money we saved with Houwzer is still hard to fathom.”
This begs the question: how can a real estate agency considerably cut the standard rate and still make money?
For one thing, the way people buy and sell homes today is drastically different than it was even a decade ago. Over 90% of people now start their home search online and that number is only increasing. The digital shift has enabled agents to streamline the process and get more eyes on their properties in less time, significantly reducing the cost of servicing a listing.
Sellers still get a lockbox, sign, virtual tour, HD pictures and video, open houses, access to Houwzer’s listing dashboard, and are listed on all major platforms including the MLS, Zillow, and Realtor.com. Rather than holding on to the steep traditional rate, Houwzer passes their savings on to the client.
Many of their sellers are so happy with Houwzer’s service that they decide to buy their next home with Houwzer or refer their friends. Clients who work with Houwzer again can save an extra $2,500 thanks to the Houwzer Rebate.
Next, they trained salaried agents to improve the customer experience.
“There’s a huge disconnect between what buyers and sellers care about and what a commission-based agent cares about,” Maher explains. “Trust is the most critical component of a client-agent relationship, and that starts with the paycheck.”
Unlike traditional agents, Houwzer Agents are full-time, salaried employees with benefits. This enables them to prioritize customer service over commissions.
Maher has painstakingly designed an elite team of highly specialized agents with the highest education requirements of any agents in the market.
Homeowner Chris MacDermaid spoke highly of his experience buying a home with them. “You know that feeling you get when you expect something to go wrong, because doing big life things often have hiccups, but at the end of it all, everything went perfect? Yeah. That’s what you get with Houwzer. Buying a house should be stressful, but the folks at Houwzer made it so easy that I’m actually paranoid that it was too easy.”
He praised the Houwzer team for their prompt communication, helpfulness, knowledge, competence, and trustworthiness which gave them confidence that they were in good hands.
“At no point did I feel pressured, or confused, or felt like I was being unfairly influenced,” MacDermaid said. “Overall the experience was what I think most people dream of for buying a home. I’m still baffled that it was indeed that easy. What more can be said? This is how home buying should be done.”
Maher says that this superior buying experience stems from their trained salaried agent model.
“As the National Association of Realtors’ commissioned DANGER Report revealed, ‘the real estate industry is saddled with a large number of part-time, untrained, unethical, and/or incompetent agents.’ Houwzer solves this problem by providing a salary and continuous training so our agents can focus on their clients, not commissions.”
Maher agrees with the DANGER Report’s suggestion that “the next winning model could be a technology-powered, agent-centric, flat fee, transaction-based fee, salaried, or auctioneering model.”
“We believe that highly trained, salaried agents is the answer consumers are looking for, and we’re constantly evaluating what else we can do to make the home buying and selling experiences better for our clients.”
Finally, they created specialized buying and listing teams.
Unlike other real estate agents, Houwzer’s agents focus on one side of the transaction.
“At Houwzer, we don’t want you to be a jack-of-all-trades. We want you to be extremely skilled at what you do. Buying and selling homes are two completely different processes that both carry massive financial implications. We opted to develop specialists so we could provide our clients with the most exceptional service at every stage.”
Many Houwzer clients rave about their agent’s responsiveness and are baffled by the amount of time, attention, and care they received. Maher credits this to the company’s “team” mentality and support staff who are working behind the scenes on everything from administrative tasks and accounting to marketing and operations.
“Giving our agents the freedom to be 100% focused on clients is really important to us,” Maher says. “We take care of our agents so that they can take care of you.”
Asked what the response has been to this new model, Maher quipped, “Our client reviews speak for themselves.”
He’s right. After serving over 4,000 clients, their average review is 4.9 out of 5 stars. You’ll be hard-pressed to find that level of client satisfaction anywhere else.
Today, they offer solutions for a heated real estate market.
Houwzer wants to help people buy and sell their homes – and sometimes that means going above and beyond to problem-solve major hurdles.
This spring, Houwzer launched the Convenience Offer™ for sellers.
In an overheated housing market, sellers don’t always have the upper hand – and that’s because home sellers are usually home buyers as well. While they might get top dollar when they go to sell, they’re hampered by the uncertainty of an unusually low-inventory market. Sellers who opt to take Houwzer’s Convenience Offer receive a cash offer from Houwzer as soon as they list. This offer allows them to pre-qualify for their home loan, remove home sale contingencies from their offer when they go to buy, and negotiate with leverage when it comes to buying their next home.
“We needed to create products to meet customers where they are in their journey,” explains Maher. “The Convenience Offer makes sure a seller’s offer is even more competitive in the open market, and frees up the equity in their homes so they can shop with confidence for their next home. It’s really giving our home sellers a convenience and allowing them to move with more confidence and more freedom.”