Flat-fee, end-to-end real estate brokerage Houwzer Inc. is getting into the cash offer and “power buyer” game, thanks to a $118 million Series B fundraising round that includes a $100 million warehouse line of credit to fund the launch of cash offer and buy before you sell services.
Philadelphia-based Houwzer launched in 2015 and charges sellers a flat $5,000 listing fee paid at closing, plus a 2.5 percent commission paid to the buyer’s agent. In addition to real estate brokerage services, the company’s mortgage and title insurance subsidiaries allow it to provide end-to-end services.
Houwzer says its new Cash Advantage product for buyers and Convenience Offers product for sellers will be “first to market” in most of the six metro areas where the company is active. Houwzer currently provides services to buyers and sellers in the metro Philadelphia and Washington, D.C. markets, as well as greater Maryland and three Florida metros — Orlando, Jacksonville and Tampa, which launched last spring.
“Mortgage, appraisal, and sale and settlement contingencies can often kill deals in the current housing frenzy, so these products will give Houwzer buyers a material advantage with their cash offer,” said Houwzer CEO Mike Maher in a statement. “They’ll also give sellers the confidence to shop for their next home before selling their current home, thanks to a flexible, cash offer in-hand.”
Having raised $9.5 million in Series A funding in February 2020, Houwzer said equity funding raised to date now totals $35 million. Edison Partners led both the Series A and Series B rounds, with other follow-on investors including Admiral Capital Group, GOPhilly and Ben Franklin Technology Partners.
Edison Partners’ portfolio also includes Fund That Flip, an online platform for investing in short-term residential real estate debt that Edison invested in in 2019.
Houwzer’s net promoter score (or NPS, a measurement of customer loyalty) “is category-leading, and these new products will remove friction for consumers making them more competitive and confident in this fierce housing market,” said Edison Partners’ Dan Herscovici in a statement. Herscovici will join Edison Partners’ Michael Kopelman on Houwzer’s board of directors.
Houwzer and its subsidiaries, Houwzer Mortgage (Nations Home Loans, LLC) and Houwzer Title (Houwzer Settlement Services, LLC), have helped clients buy and sell 4,000 homes with a cumulative sales volume of nearly $2 billion, the company said.
Houwzer claims to be “the only real estate company operating on an all-W2 compensation model across all of its salaried agents and mortgage advisors.”
“This funding round further cements our innovative approach in creating a new model for residential real estate,” Maher said in announcing the Series B funding. “Our vision is to reimagine homeownership for good, making it affordable, fast, and fun so buyers and sellers can maximize their next chapter. We’re simply a better, smarter way for consumers to buy and sell homes, and people are starting to catch on.”
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