Daily Local: Realtor offers Chester County homeowners $1K for listing

Posted on Oct 26, 2017

The rest of the residential real estate industry still operates the way it did pre-internet. 

Houwzer is out to change that. Read the full story in the Daily Local

Realtor offers Chester County homeowners $1K for listing

Houwzer real estate CEO Mike Maher and Michael Cresta of Walnut Street Labs in West Chester.

By: Brian McCullough

October 24, 2017

Mike Maher is out to change the residential real estate market and he’s willing to pay some Chester County residents $1,000 each to do it.

The CEO of Philadelphia-based Houwzer is offering county residents the incentive to list their houses with his company as it attempts to make inroads into the Pennsylvania suburbs.

Maher, a former Navy officer, said in a recent interview the residential real estate business is stuck in the pre-computer-technology world. He’s out to disrupt that.

“We thought, it no longer costs 6 percent to sell a home,” said Maher from Houwzer offices in the Walnut Street Labs building in the 300 block of West Gay Street.

Traditionally, the cost of selling a home has been split, with sellers and buyers each paying a 3 percent commission to agents.

That arrangement was in place before online sites like Zillow, Trulia, Realtor.com and others were in place for all to see.

“Your listing is incredibly important to a real estate agent,” Maher said. “While most industries have advanced their business models alongside technology and the Internet, the real estate industry has lagged behind.”

That’s why Houwzer normally only charges a $495 listing fee and 3 percent for the buyer’s agent to sell a home, which the company says saves its clients an average of $11,000.

“We’re confident our model works,” the company declares on its website. “In fact, we’re so confident in our ability to sell your home and the value of a listing that we’re waiving the $495 fee and paying you $1,000 to list your home.”

The company is also different from other real estate companies in that it pays agents a higher base salary with benefits. It now has 25 agents in the region, 25 support staff and a 92 percent retention rate, far above the national average, Maher said.

Not surprisingly, traditional real estate salespersons are skeptical Houwzer will be able to succeed with its business model. Transactions are more complicated than ever and sellers need more personalized service to protect their interests, the skeptics argue.

“I wish them luck,” said Larry Flick, chairman and CEO of Berkshire Hathaway HomeServices Fox & Roach Realtors. “It’s not a problem at all (for traditional sellers). We’ve seen a lot of discounters come and go. In business, somebody will always try to do something for less. It hasn’t been a sustainable business model. Let’s have a conversation about this in three to five years.”

Kit Anstey, a realtor with the West Chester-based Kit Anstey Real Estate Team and part of Berkshire Hathaway, agreed.

“I would say that I am not threatened, nor is (Berkshire) by these discount brokers limited service real estate companies, but of course it is important that we pay attention and learn from their business models,” Anstey said. “Selling or buying a home today is more complicated than ever, I have been in the business 30 years and I can tell you from start to finish on the selling or the buying side of a transaction, it is very complicated and needs assistance from an experienced professional.”

Maher said Houwzer is different from discounters, however, because it does provide full service and hopes to make up for the money it gives up by representing sellers for $495 by representing them as a buyer in the other part of the transaction. It is not like an agency that tries to guide sellers to complete the sales themselves.

“We’re not looking to get rid of agents,” the CEO said. “Every transaction has its own complexities and its unique circumstances. You need a professional to guide you.”

The agency, he said, should be seen more as an industry disrupter such as an e-Trade to the brokerage business or an Expedia to travel agents.

So far, in about 2 1/2 years in business, the company has done more than 500 transactions worth more than $175 million, said Maher 35, of Center City Philadelphia.

A surface warfare officer, Maher spent 8½ years with three deployments in the U.S. Navy, leaving in 2013 as a lieutenant.

At around the same time he and his wife Jennifer founded Benjamin’s Desk, a co-working space company in Philadelphia. Maher reduced his role to a board member of that company in 2015 to start Houwzer with cofounder Kevin Baird.

(Earlier this month D.C.-based incubator 1776 and Benjamin’s Desk merged their businesses in a new company that will retain the 1776 name, Technical.ly/Philly reported.)

After building the Benjamin’s Desk business, the Mahers began flipping houses and became frustrated with how much profit they were losing to fees.

Thus, Houwzer was born.

Maher estimates his business model has already saved clients $3 million in commission charges, adding that a top goal for 2018 is to expand into a new metropolitan area.

“Why should they have to pay twice?” Maher asks of clients selling one house and buying another.

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