Houwzer, the real estate brokerage that saves consumers thousands on a better experience, today announced a $9.5 million investment led by Edison Partners, the Princeton, NJ-based growth capital firm.
Houwzer will use the new funds to expand into Greater Baltimore immediately and grow its existing presence across the Greater Philadelphia and Washington, D.C. regions. The growth financing will also support the expansion of services to include mortgage, title, and insurance divisions. Houwzer is creating a technology-enabled, unified home buying and selling experience with agents solely focused on the customer.
While the internet has greatly reduced the cost to advertise homes, antiquated real estate brokerages continue to push exorbitant commission rates as high as 6 percent of the final sales price of a home. In addition, clients struggle with commission-based agents that often lack the training, coaching, and resources required to consistently deliver exceptional service. This can lead to misaligned financial incentives.
“Consumers continue to prefer human advisors, especially for a transaction this significant; but they also believe that advances in technology should translate into savings and a better experience,” said Houwzer CEO and Co-Founder Mike Maher. “Our solution resonates because it puts the customer first – reducing chaos in the transaction without sacrificing service. We’re really excited to have found the right partner in Edison, who shares our vision and will help us bring a new real estate model to the masses.”
With salaried agents and an end-to-end home services technology platform, Houwzer provides a better customer experience and significant savings across all aspects of the home buying and selling process. Unlike a traditional 1099 agent, salaried agents at Houwzer don’t have to spend time on business generation, marketing, and other administrative work that can take time away from the customer. Instead, they’re supported by a specialized team and advanced technology allowing them to exclusively focus on the one thing that matters – the customer experience.
In contrast to the traditional 6% fee, Houwzer charges a flat $5,000 listing fee paid at closing plus 2.5% for the buyer’s broker. This saves their home sellers an average of $15,000 in commissions. Home buyers enjoy a pressure-free experience with Houwzer’s highly-trained buyer agents and loan officers who focus on buyer goals, not commissions. The company is also the first residential real estate brokerage in the country certified as a B Corporation leveraging a triple-bottom line approach to its business.
“We’re really excited about what Houwzer has built and where the company is headed. I’m incredibly impressed with CEO Mike Maher’s team, the company’s significant growth and strong customer reviews. I’m confident that Houwzer is positioned nicely to deliver on a differentiated customer service promise with its salaried labor model and tech-enabled platform,” said Michael Kopelman, General Partner at Edison Partners, who will join Houwzer’s board.
A top growth investor, Edison Partners has invested in more than 230 companies. Existing investors such as David Robinson’s Admiral Capital Group and real estate investor Ira Lubert also participated in the growth round. Additional new investors include GO Philly Fund and Chestnut Street Ventures.
Headquartered in Philadelphia, Houwzer plans to double its workforce over the next 12 months and enter the Greater Orlando market later this year.