Why I built Houzeo — The most advanced For Sale By Owner (FSBO) platform
Executive Summary: It’s shocking how many home buyers and sellers face unpleasant surprises sitting down to close on their home, their American dream. I am a real estate investor with an ivy-league MBA and a strong finance background, but even someone with my savvy isn’t immune to previously undisclosed, and often unwarranted, charges. I built Houzeo as a FSBO platform to break through the inefficiencies inherent in current real estate transaction processes and deliver a streamlined, transparent, and inexpensive experience to home buyers and sellers.
Disclaimer: Read this not as a criticism of any particular stakeholder. The agents, brokers, mortgage brokers, lenders, and so on are all attempting to do the best they can with the tools available. There’s a systemic problem of transparency however that allows undisclosed charges to creep up in the Closing Disclosure/HUD, often too late in the process for consumers to take remedial action.
Surprises as a First Time Home Buyer: My agent & her broker represented both me (buyer) and the seller in this transaction. This was 2009, a buyer’s market. The escrow company and mortgage brokerage were in-house, with the latter offered to me at no charge. The HUD still came with a total of $1,700 of charges that weren’t previously disclosed. Many didn’t make sense either.
The Big Shock: Another HUD/lender summary came with a $7,175 mortgage broker compensation when the agreement (luckily recorded) was no mortgage broker fee at all if I used that real estate brokerage. The mortgage broker claimed the lender was directly paying them and these monies weren’t indirectly coming from my loan proceeds.
Déjà vu: Smaller surprises are in practically every closing. An attorney might charge 30% more than another for a similar closing, a broker charges a processing fee although they got a full 3/6% commission, and so on — but you only find out about these charges in the HUD/Closing Disclosure, 3 days before closing and often too late to do anything about it.
Houzeo’s Closing Dashboard: Some of these charges are valid, many aren’t. Regardless, the current transaction process with weak/non-existent upfront fee disclosure requirements, makes the most exciting financial transaction in a consumer’s life rather nerve-racking. Houzeo changes that with it’s Closing Dashboard, the most advanced dashboard in consumer real estate, and it lets sellers know estimated closing costs upfront — on day 1. It also gets more intelligent the more transactions it sees in a particular area.
Visit www.houzeo.com to learn what makes Houzeo the most advanced For Sale By Owner (FSBO) platform. The platform breaks the process of selling a home into 6 linear steps and digitizes each one of them.
We’ve just launched v2.0. See the video of our v1.0 launch below.