Compass Real Estate vs. Houwzer

Posted on Oct 18, 2021


Compass is now the third-largest brokerage in America by sales volume, and it’s currently operating in major cities including Philadelphia, Washington DC, Tampa, and plenty more across the country.

Both Compass and Houwzer promise to revolutionize the real estate industry using technology-backed solutions - and unsurprisingly, many homeowners have questions about how, exactly, the companies are similar - and perhaps more importantly, how they differentiate themselves. Here’s what you need to know.

What is Compass Real Estate?

Compass is a modern real estate platform that aims to use technology solutions to provide a seamless experience to clients. Compass also offers free market insights into zip code-specific real estate trends. Users can visit the website and find information about changes in median price, median days on market, and changes in transaction volume for their neighborhood. 

Similar to how a traditional brokerage operates, Compass agents work for a standard commission - but Compass gives agents access to marketing materials and Compass CRM, a management tool, to help streamline and simplify their job. Although much of the tech Compass used is more agent-focused, clients can make use of tools like "Compass Collections," a visual workspace where agents and clients can collaborate in real-time.

Compass also differentiates itself through its add-on services such as Compass Concierge, which can handle tasks like staging, painting, landscaping and cosmetic renovations (and the home seller only needs to pay for this once the home sells).

What is Houwzer?

Houwzer aims to bring the fees in real estate back in line with what it actually costs to sell a home by leveraging the internet and additional technology to make the process more efficient. 

Instead of charging 3% for listing services, Houwzer makes use of economies of scale and charges a $5,000 flat fee (plus 2.5% for the buyer’s agent). Houwzer also hires agents as full-time employees, rather than relying on the traditional 1099 contractor model other brokerages use (more on this below). 

Houwzer’s advantage over its competitors is that it offers an even better full-service experience despite huge cost savings. The discount brokerages that match Houwzer in price typically only offer a fraction of the services, while requiring homeowners to do the rest - which can add a lot of stress to the home selling process. Every Houwzer agent, by contrast, is backed by a team that works to make sure every detail is taken care of.

Houwzer also has extremely high ratings by clients on online review sites (4.9/5 stars, from thousands of reviews, across multiple platforms) compared to most competitors. 

How much money do you save with Compass?

Compass’s goal is to make the home buying/selling process easier, rather than less expensive. For this reason, Compass is not likely to save the average consumer money when compared to a traditional brokerage.

 Perhaps not surprisingly, Compass’s target audience is the luxury market, rather than low to middle-cost consumers - these clients are often willing to pay a premium for a smoother and less stressful experience. Home sellers can expect to pay the typical fee of approximately 3% to the listing agent, and 3% for the buyer’s agent.

As an example: for a $600,000 home, 3% would go to the listing agent, and 3% would go to the buyer’s agent, for a total of $36,000 before additional closing costs.

Compass:

  • 3% listing fee
  • 3% buyer’s agent fee

How much money do you save with Houwzer?

Houwzer’s major value proposition to home sellers is its $5,000 flat listing fee. This means that even if you’re selling a million-dollar home, the listing fee doesn’t change. There are no upfront fees – you’ll only pay at the closing table when the home sells. According to Houwzer, the average homeowner ends up saving $15,000 when they go to sell. 

As an example: for a $600,000 home, $5,000 would go to the listing agent, and $15,000 would go to the buyer’s agent, for a total of $20,000.

And if you sell and buy with Houwzer, Houwzer rebates you $2,500, or half the listing rate.

Houwzer:

  • Flat $5,000 listing fee
  • 2.5% buyer’s agent fee
  • Average savings of $15,000
  • Additional buy+sell savings: $2,500

How do Compass agents get paid? 

Compass hires agents to work on a commission basis for the company (in other words, they are 1099 contractors rather than direct employees of Compass). This means that a percentage of what every Compass agent makes from selling a home goes back to Compass. In turn, Compass provides the agent with marketing assistance and the use of their communication platform, and Compass agents benefit from the name recognition of Compass. 

As contractors, Compass agents are responsible for paying for many of their expenses (such as healthcare) out of pocket, which puts more pressure on agents to close deals as soon as possible - so they can get their commission check.

Compass only takes on a small percentage of applicants as agents. This ensures that the agents they do have working for them are experienced professionals.

How do Houwzer agents get paid? 

Houwzer has changed things up by hiring agents as employees who receive a full competitive salary with benefits.

Because their salary isn’t tied to selling homes at a particular price point, Houwzer agents can focus on client satisfaction, rather than commission bonuses. This encourages true transparency during the buy/sell process. Agents also receive extensive training so that clients have a consistently great experience regardless of which agent they are paired with.

Compass Real Estate reviews

Because Compass and Houwzer are composed of individual brokerages around the country, their reviews are spread out across a range of platforms and cities.

In Washington, DC for example, Compass Real Estate DC has a 4.6 out of 5 star rating in Google reviews, based on 14 reviews. These reviews include:

  • “[My agent] is responsive, responsible and best of all he helped me sell and buy my last 3 houses. I highly recommend him and his team.  Great work!” -Tricia M
  • “[My agent] was only motivated to make as much money as possible by recommending homes above my budget and pushing me to rush through all steps of the contract, inspection, financing (he even asked that I use a different bank that could close sooner). If I hadn’t been so far into this purchase and really wanted this home I wouldn’t have exited that contract to start over and work with a different agent.” -Donovan A. 

Houwzer reviews

In Washington, DC Houwzer has a 5 out of 5-star rating in Google reviews, based on 94 reviews. These reviews include: 

  • "Listing and selling with Houwzer was extremely efficient and professional.  I was a little concerned with using a non-traditional real estate process but now that I have I can imagine ever doing anything different.  My only wish is that Houwzer was nationwide so I could recommend them to all my friends and family." -Christopher J.
  • "We chose Houwzer for our recent home sale in Maryland. We've sold homes previously using the traditional real estate method. We saved over $15,000 on the sale. And the experience was outstanding. Their process is simple, and the online tools are helpful in seeing progress...Thank you Houwzer for all that you do!" -Paul S.

Overall, reviews for both companies were positive. The reviews seem to emphasize that Compass acts more like a traditional brokerage and might be the best fit for those in the luxury housing market, while Houwzer continues to receive positive feedback for helping clients increase their bottom line without sacrificing on great service.

Is Compass or Houwzer better?

If you have a million-dollar house and need to move quickly while minimizing stress, Compass might be the right brokerage for you. But if you want to maximize profits on your home sale while still benefiting from using a full-service listing agent, then Houwzer might be the better fit for your needs. 

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