How Does Houwzer Make Money?

Posted on Oct 02, 2017


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A lot of things in life are too good to be true. As hundreds of our customer reviews show, Houwzer is not one of them. Understandably, our potential clients frequently ask us "how does Houwzer make money?" Answering this question starts with explaining how the commission in real estate works.

In most cases, a buyer and seller are each represented by real estate agents, both of whom make their money on commission. But where does that commission come from? The sales price of the home. Each real estate agent receives a 3% commission on the sales price of the home, but more importantly both of these fees come out of the seller’s profit. To put that into perspective, for a $400k home a seller will shell out $24,000.

For buyers, this is problematic. It creates an incentive for the buyer agent to promote homes above their customers’ budgets in order to increase their own commission.

For sellers, it’s downright unfair. With the rise of social media and websites like Zillow, 98% of home buyers start their search online. As a result, homes have become much easier to market and it no longer costs 6% of a home’s value to sell it. To be honest, it probably never did.

So as it seems, brokerages are pretty broken. To create trust with our buyers, Houwzer opted to salary all of our employees. When agents work for clients instead of commissions, you’d be amazed at the level of customer service you receive.

To address the second issue, we did something that made many people raise an eyebrow — we got rid of the 3% listing commission in favor of a flat $995 listing fee collected at settlement. Many home sellers are so pleased with our service they decide to buy their next home with our expert buyer agents. Houwzer collects 3% commission when their customers buy a home and that is how we make money. Selling your home and not buying another one? No worries — we just ask that you share Houwzer with your friends and refer them our way.

So there you have it. Houwzer makes money by providing home sellers with the highest level of service and helping buyers find a new home. It's not a discount — just a fairer way of doing business.


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