But Wall Street determined it was a real estate company worth less than $18 billion. But the richly valued Compass remains far behind Realogy, whose 300,000 agents closed 1.4 million transactions worth $505 billion in 2019. In a letter to its staff, Reffkin said he was expecting revenue to fall by 50% over the next six months. any liability in connection therewith. At times, it feels that the needs of the real estate agents (who are independent contractors in relation to the company), are prioritized over the needs of the employees.
Realogy and Re/Max and everybody else has a CRM, too.”Rather than impressing with technology, Micenko says that Compass recruits agents by offering more attractive splits on commissions. WeWork ultimately pulled its planned initial public offering and needed a rescue plan from SoftBank, which later took a $4.6 billion write-down on its WeWork investment. Cons. Every weekday evening we highlight the consequential market news of the day and explain what's likely to matter tomorrow. Airbnb and HomeAway are clever hotel room search sites. But its free-spending ways are rattling rivals and shaking up the industry.After a recent $450 million infusion from Japan’s SoftBank Group Corp., Compass has a war chest of $1.2 billion. That pile of cash has enabled the firm to woo high-profile agents with hefty marketing budgets, slick technology and stock options as it dangles the prospect of an initial public offering.The firm has lured top talent with some of the most generous commission splits in the business: Some agents received all the sales commission, with nothing going to Compass, on as many as eight of their first deals, according to offer letters.Other perks include fronting sellers money for staging and cosmetic work, so agents don’t have to dip into their own pockets. Compass maintained that its technology would make its agents Last year, Compass’ approximately 15,000 agents completed about 112,000 transactions worth $88 billion. They are catering to the real estate agent. Reffkin, 40, was inspired to start Compass in 2012 by his real estate agent mother, Ruth. Existing home sales could be down 40% to 50%, year over year, through the third quarter of 2020, Micenko warns, adding: “This is coming at the worst time of the year for a cyclical business.” Last summer, the SoftBank Vision Fund and other venture-capital investors put $370 million into Compass, a real estate firm promising to shake up the residential brokerage industry.Copyright ©2020 Dow Jones & Company, Inc. All Rights ReservedThis copy is for your personal, non-commercial use only.
But while they can design a better spoke, they are still making wheels.Uber and Lyft, for example, are fancy taxi companies, no matter what they claim. As an innovative residential real estate firm, we empower our agents so they have more time for advising their clients. Venture capital firm SoftBank pitched WeWork as the next Airbnb, claiming it was worth $47 billion. “The market had been, let’s say, 60% to 70% and then Compass came in and was hiring people for a contract period of two years at 85%, 90%, 95% splits,” he says. There is no set commission split at Compass. That's not being supportive. completeness or accuracy of descriptions or measurements (including square footage measurements The mobile apps are useful, intuitive and have some bells and whistles not found elsewhere.The key to success, though, is convincing agents to use the software. At the end of March, Compass laid off 15% of its employees, or about 375 people. But its free-spending ways are rattling rivals and shaking up the industry. Compass offers lower brokerage fees, potentially saving sellers money.The company was founded by Robert Reffkin, a former Goldman Sachs executive, and Ori Allon, a successful software engineer. “I’ve yet to see any evidence to support that Compass’ technology is making its agents more productive than the industry average,” he says. As a private company, Compass isn’t required to disclose financials, and it declined requests to make financial data available.
Employees work tirelessly to make agents successful, but it still does feel that the agents are valued more. A real estate company with a purpose. Illustration by Doug Chayka Compass is just a real estate firm with a good app.Tech can make our lives and businesses easier, but software is a tool not alchemy. Compass, WeWork’s stablemate in the SoftBank portfolio, also claims to be a technology firm.“Compass is building the first modern real estate platform, pairing the industry’s top talent with technology to make the search and sell experience intelligent and seamless,” the company claims on its website. “They are a residential real estate brokerage, just like everybody else,” Susquehanna analyst Jack Micenko says of Compass. and property condition), such should be independently verified, and Compass expressly disclaims Compass, a fast-growing residential real estate broker, is still trying to figure out the business. As We tries to regroup after its CEO’s abrupt departure, another real-estate tech company backed by SoftBank is facing an upper-ranks exodus: the seven-year old New York-based brokerage Compass.
Those plans are now in doubt. But is the company really a tech startup, or just another real estate brokerage using fancy software?Despite Compass’ claim to build “the first modern real estate platform,” big firms have spent billions developing software over the last 20 years.