Startup Houwzer is new model real estate brokerage

Posted on Apr 09, 2015


You might know Mike Maher. He’s the guy who founded Center City co-working space Benjamin’s Desk.

A few months ago, he stepped down from his CEO role at Benjamin’s Desk (and handed control to his brother Anthony Maher) to run Houwzer, a startup real estate brokerage with a twist. He founded the company with Kevin Baird, a local real estate developer, attorney and entrepreneur.

Description of company: Houwzer is a startup residential real estate brokerage with a free seller listing model. Starting in Philadelphia, the company is looking to build a national brand focusing on residential sales.

Revenue model: Houwzer makes money by representing buyers with the traditional 3 percent commission model. By not charging the listing commission, Houwzer views its $345 administrative fee (paid at the closing table by the seller) as the customer acquisition cost (CAC) of generating enough buyer leads to close one buyer. On a $300,000 home, the CAC would return at least $9,000 when averaged out, Maher said. In the future, Houwzer will also generate revenue through title, mortgage, insurance and other vertical services.

Size of market and share it can gain: The residential real estate market, in terms of sales commissions alone, is a $70 billion market. Factor in the residential title, mortgage and insurance industries, Maher said, “and you’re pushing several hundred billion.” The “for sale by owner” market makes up 10 percent of the existing market. Houwzer is seeking to take that and much more. When the model is proven, the company’s goal is 10 to 15 cities in 18 to 24 months.

Competition: Traditional brokerages, such as Berkshire Hathaway, Keller Williams and Coldwell Banker. Startup brokerages such as Redfin, Compass and Open Listings are competitors too.

Disruptive technology, product or service: Houwzer is building proprietary technology to give it a competitive advantage, but it is 100 percent a brick-and-mortar company built with salaried real estate agents. Houwzer plans to introduce technology to increase brokerage efficiency and enhance consumer experience (think Zenefits or Hootsuite for sellers), but has no intent on being a product company. “We are a full stack startup attacking the core of the real estate market: listings and leads,” Maher said.

Funding sought: Houwzer is self-funded to date with $100,000. It plans on closing a seed round of $1 million in convertible debt soon.

CLOSER LOOK Houwzer CEO: Mike Maher Year founded: 2014 Number of employees: Four Location: Philadelphia Phone: 267-765-2080 Website: www.houwzer.com

Elevator Pitch is a snapshot of an area startup. The Business Journal does not endorse the companies featured, nor is this an invitation to invest.

Repost from Philadelphia Business Journal


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