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Houwzer, a flat-free and end-to-end real estate brokerage, announced this week that it is acquiring Trelora, a competing flat-fee brokerage.
Mike Maher
In an announcement Monday, Houwzer said that the acquisition will expand its footprint to a total of 14 states spread across the West, East Coast and South. Houwzer founder and CEO Mike Maher described the deal as an “inflection point” for his company.
“Next-gen brokerages are operating predominantly in one market or region, subscale, and without the benefit of shared learnings or insights,” Maher continued in the statement. “The Trelora acquisition provides meaningful scale and operating leverage driving powerful unit economics.”
Maher will continue on as the CEO of the combined company, while Trelora CEO Rod Ward will become the chief revenue officer and will lead a new enterprise division within the firm. Ward said in the statement that he is “thrilled to join forces with Houwzer.”
Rod Ward
“Like Trelora, Houwzer is a mission-oriented brokerage that shares our commitment to elevating the future of real estate by putting the consumer first,” Ward also said.
The companies did not publicly disclose financial details of the deal.
Houwzer is based in Pennsylvania and was founded in 2015. The company uses a salary model for agents, offers a flat-fee service for homesellers, and provides a variety of ancillary services such as mortgage and title. Earlier this year, Houwzer completed a successful funding round and branched out into power buying as well. The company completed an earlier funding round in 2020.
Monday’s statement notes that since its founding, “Houwzer has saved home sellers tens of millions along the East Coast and helped clients buy or sell thousands of homes worth more than $2 billion.”
Trelora was founded in 2011 and is based in Colorado. The company similarly offers a flat-fee model for consumers. In years past, the company has generated some angst in the real estate community for suggesting consumers ditch their agents.
The new statement on the acquisition notes that over the years “Trelora has closed over 8,000 transactions, saving clients tens of millions in commissions along the way.”
Both Houwzer and Trelora are part of a class of new and disruptive companies that aimed to shake up both how consumers engage with real estate, as well as how industry professionals are compensated. Many companies in the sector had a spectacular run in recent years, successfully raising millions of dollars and rapidly growing their footprints.
However, the market downturn of 2022 has proven challenging for many such companies. Reali, which began as a flat-fee brokerage before pivoting to other services, shut down in August and was sold off for parts in October. Homie, another flat-fee brokerage based in Utah, has carried out multiple rounds of layoffs this year and in October lost its CEO.
Power buyers such as Homeward and Orchard have also significantly reduced staff in recent months.
In that light, Houwzer’s acquisition of Trelora offers a rare example of a tech-focused real estate disruptor expanding its reach right now — albeit at a time when some observers have predicted an uptick in mergers an acquisitions as companies effectively go on sale.
Monday’s statement ultimately offered a bullish take on Houwzer’s future, arguing that “the consolidated company has a clear path to profitability with industry-leading metrics in agent productivity, gross profit margin, net promoter score (NPS), and attach rates for mortgage and title.”
“Houwzer remains open to additional opportunities to accelerate national expansion,” the statement added, “and believes its model is poised for growth as the market continues to shift.”
