Philadelphia-based flat-fee brokerage Houwzer has secured $9.5 million in Series A funding, bringing the brokerage’s total funding to $17 million since 2017.
Edison Partners led the funding round, which included contributions from existing investors Admiral Capital Group co-founder David Robinson and LLR Partners founder Ira Lubert and new investors GO Philly Fund and Chestnut Street Ventures.
The $9.5 million will be used to fuel Houwzer’s expansion plans that include strengthening its footprint in Washington D.C. and Philadelphia while adding two new markets, Baltimore, Maryland and Orlando, Florida.
“[There’s] great opportunity to augment the Philadelphia and D.C. markets as we contiguously expand within the Northeast Corridor,” Houwzer CEO Mike Maher told Inman. “Orlando is about proving our model in the sunbelt, hopping on an airplane (instead of a train), and more flattened seasonality.”
Beyond expanding Houwzer’s market share, the $9.5 million will be used to grow the company’s mortgage services and launch title and insurance divisions later this year — both of which are part of Maher’s vision of a technology-enabled, fully unified home buying and selling experience.
“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,” Maher said in a prepared statement. “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,” he added.
Launched in 2015, Houwzer started with a flat $995 listing fee, which rose to $2,500 in 2019 and most recently, to $5,000. The fee is paid at closing, plus a 2.5 percent commission for the buyer’s broker.
However, sellers can receive $2,500 back at closing with a “bundle rebate,” which is offered when sellers also buy a new home using Houwzer. The rebate never expires and can be transferred to a friend or family member who decides to use Houwzer’s services.
Maher said the flat-fee increase allows Houwzer to continue improving its agent and consumer experiences, and is offset by the bundle rebate.
“Price alone can’t win long term,” he explained. “At the new price point, we can deliver industry-best agent productivity, agent compensation, and customer experience.”
“Our $2,500 bundle helps offset for sellers who also buy,” Maher added. “We still differentiate with best price to experience ratio. And we’re not interested in a race to the bottom.”
Beyond a flat-fee model, Houwzer also offers its agents salaries and access to support and technology teams that handle business generation, marketing and other administrative tasks.
“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,” Edison Partners General Partner Michael Kopelman said in a prepared statement.
“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.”