By Tiana Baur
Chatbots and new tech are barreling towards the industry. Everything is moving to a cloud environment. And now, Compass is coming for your market share.
The CEO of Compass, Robert Reffkin, recently announced a 2020 by 2020 plan to the company. What does that mean, you ask? A plan to expand into 10 new markets in the U.S. by 2020, and to grab 20 percent of the market share in the 20 largest U.S. cities. Casual, right? The cities they’re expanding to are: Seattle, San Diego, Phoenix, Dallas, Austin, Houston, Atlanta, Charlotte, Philadelphia, and Chicago.
Compass has now raised a whopping $325 million in capital and their success feels imminent, especially since they’re already the #4 largest brokerage in NYC, #3 in DC, and #2 in Cambridge. Not only that, but their agent count is up 500% over the past two years, now at 2,000 agents and gaining more traction every day. They have the capital to buy agents with massive signing bonuses and the funds to invest in an entirely new CRM and targeted marketing tools designed just for their agents. By the end of this year, they are projected to do 16,000 transactions, $14 billion in sales volume and $350 million in revenue, annually.
An obvious question is: Will they have a durable and lasting impact? What happens to aggressive brokerages, such as Compass, when the value proposition of a big signing bonus isn’t attractive enough for agents to make the move? Meaning, what if their culture doesn’t align with what an agent wants out of their brokerage? Pockets are deep, but might never be deep enough for the many that love the brokerage they currently call home.
In the shadow of Compass’s other recent announcement that they’re also considering an IPO, lies a sad-looking Redfin, whose stock dropped over 5% that day. The waters are rough out there right now and it’s obvious many brokerages won’t make it out of the impending storm. The reality is, few are safe. Fewer are “too big to fail.” When tech and industry are changing at such a rapid rate, it’s impossible to predict the future of winners and losers. Whether Compass is successful or becomes another Redfin, remains to be seen.
Looking to future-proof your brokerage for these massive industry changes? This is a good starting point. An open platform allows your brokerage to combat the massive technology budget Compass has with your very own unique suite of tools, in an affordable way. 2018 is right around the corner – start it off on the right foot.