{"id":3083,"date":"2022-05-05T11:00:00","date_gmt":"2022-05-05T11:00:00","guid":{"rendered":"https:\/\/preprod.realtrends.com\/blog\/2022\/05\/05\/houwzers-ceo-says-salaried-agent-model-is-future-of-real-estate-brokerage\/"},"modified":"2025-03-13T02:41:42","modified_gmt":"2025-03-13T02:41:42","slug":"houwzers-ceo-says-salaried-agent-model-is-future-of-real-estate-brokerage","status":"publish","type":"post","link":"https:\/\/preprod.realtrends.com\/blog\/2022\/05\/05\/houwzers-ceo-says-salaried-agent-model-is-future-of-real-estate-brokerage\/","title":{"rendered":"Houwzer’s CEO says salaried agent model is future of real estate brokerage"},"content":{"rendered":"\n

Salaried agents, fixed listing prices for sellers and high attach rates for ancillary services are three keys to Houwzer\u2019s brokerage model. \u201cWe are driving an end-to-end, one-stop shopping experience from a customer’s perspective,\u201d says Mike Maher, CEO of the Philadelphia-based company. \u201cWe are not trying to drive more revenue from our clients. Instead, we want to reduce friction in the transaction.\u201d<\/p>\n\n\n\n

Launched in 2015, Houwzer<\/strong> now operates in six Atlantic coastal states and the District of Columbia with approximately 75 agents and wholly owned mortgage and title affiliates. Earlier this year, the company generated $118 million through a Series B funding<\/a> that supports three new products, Cash Advantage\u2122, Convenience Offers\u2122 and Buy Before You Sell\u2122 for consumers. In March, Jonathan Zabusky, former president of GrubHub<\/strong>, joined Houwzer as executive chairman.<\/p>\n\n\n\n

Maher says that Houwzer is a certified B corporation, meaning that its decisions are aimed at benefiting all stakeholders, including its communities and employees as well as shareholders. Through the company\u2019s RiseUp Fund \u2013 led by former NBA star David Robinson \u2013$100 from every home sale goes into a not-for-profit to help the underserved achieve home ownership. \u201cI’m interested in building a long, enduring business model that makes a dent in the universe and realigns the incentives for all the stakeholders in this equation,\u201d he says.<\/p>\n\n\n\n

A salaried agent model<\/strong><\/p>\n\n\n\n

\n

Houwzer\u2019s model is based on aligning incentives for the brokerage, agents and consumers. About half of an agent\u2019s compensation comes from a base salary and half through bonuses based on specific transactions or overall performance, Maher says. “We have full-service local agents, but compensate them differently because we want their focus to be on customer service, not being a small business,\u201d he adds. \u201cWe provide about 90% of their leads and take care of everything except for the actual closing of the deals.\u201d<\/p>\n\n\n\n

Maher says Houwzer\u2019s model appeals to experienced agents looking for more financial stability, as well as newer agents who have found it difficult to generate enough leads to sustain their businesses. The firm also focuses on apprentice agents who can be trained to focus on buyers or sellers. \u201cWe\u2019ve seen every one of those profiles become top-producing agents at our company,\u201d he adds.<\/p>\n\n\n\n

Maher says there are multiple advantages to using salaried agents with company benefits and performance incentives, including a self reported 80% workforce retention rate. Logically, using salaried agents also improves the attach rates for mortgage and title insurance services.<\/p>\n\n\n\n

At Houwzer, listing agents only work with sellers, and buyer agents only work with buyers with dual agency only at the brokerage level. The company\u2019s transaction coordinators provide support to both sides. \u201cI want our clients to feel good about their agents, and benefit from a more streamlined and transparent transaction,\u201d he says. \u201cWe believe this model is only way to structure it to achieve those goals.”<\/p>\n\n\n\n

Serving consumers<\/strong><\/h4>\n\n\n\n

Maher says Houwzer\u2019s<\/a> model delivers a consistent end-to-end digital and offline experience for consumers throughout the transaction. \u201cOur W2 salaried agent approach helps us achieve an average 80 to 84% net promoter score (NPS), which is huge in residential real estate,\u201d he says.<\/p>\n\n\n\n

For sellers, Houwzer offers a flat $5,000 fee, regardless of listing price, while buyers pay a 2.5% broker fee. \u201cWe believe the portals have done a good job of connecting buyers to listings, so a home priced correctly and presented appropriately should sell based on the average days on market in that community,\u201d Maher says. \u201cIf you’re selling a home, the savings goes right back into your pocket,\u201d Maher says. \u201cBut if you’re buying a home, you know that the agent is salaried and has your interests fully in mind.\u201d<\/p>\n\n\n\n

Houwzer\u2019s market is typically the $200,000 to $1.5 million price range, where owners are concerned about saving money. For the luxury and second-home market, agents are selling a lifestyle and that typically requires a more intensive marketing approach, Maher says.<\/p>\n\n\n\n

Looking ahead<\/strong><\/h4>\n\n\n\n

With its ancillary services as well as new power-buyer services, Houwzer will continue to remove contingencies in the transaction, while boosting the company\u2019s revenue. \u201cBy the end of 2022, any consumer who goes through our technology platform will not see third-party services, as we plan to bring in homeowners insurance as well,\u201d Maher says. \u201cThen, we will be looking at home warranties and moving services.\u201d<\/p>\n\n\n\n

While the company\u2019s $5,000 listing fee doesn’t benefit from rapid appreciation in home values, Maher says that\u2019s actually a good thing as that means \u201cthere’s more hard-earned equity going back into consumers’ pockets.\u201d He says it also contributes to the sustainability of Houwzer\u2019s model in more challenging future markets.<\/p>\n\n\n\n

Right now, Houwzer will continue to expand in its current markets without necessarily entering new states. As Maher says, \u201cWe are laser-focused on maintaining our gross profit margin, attach rates on mortgage and title, and agent productivity.\u201d<\/p>\n\n\n\n

Miami-based freelance writer Richard Westlund contributed to this story.<\/em><\/p>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

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