On November 1, 2019 I joined Compass as a Broker Associate. This is only the third brokerage I have been affiliated with in nearly 17 years in business. I was with my first broker for ten years to the day, before I opened up my own brokerage in early 2013. For almost seven years, I operated as a Broker/Owner, Captain of my ship, with complete freedom to run my business as I see fit.
So why did I trade in my autonomy and throw my lot in with Compass? To answer that, I’ll begin by explaining what Compass is.
Compass is a real estate start-up company based in New York City. They’ve actually been around for seven years or so at this point, but they have really grown in the last couple of years, fueled by massive investments from a number of blue chip firms and private investors. You can see a list here.
Compass has a goal of achieving 20% market share in the top 20 U.S. markets by the end of 2020. As I understand it, they’re very nearly there already. Locally, they purchased a few high-performing northern California brokerages in 2018 and 2019 – Pacific Union International, Paragon, Alain Pinel Realtors, and Central Coast Realty Group. Their current agent count nationwide tops 12,000 with about 250 offices coast to coast and over 2,000 employees on staff.
Compass is not a franchise. Every Compass office is 100% owned by the company. They have a number of “organic” offices throughout the greater Bay Area in addition to those they purchased over the last couple of years (organic offices are ones they opened themselves, without acquiring another brokerage).
The Compass Mission
While 20/20/20 is a great short term goal for the company, for the long haul they are guided by their mission statement:
Our mission is to help everyone find their place in the world.
Compass wants to do for real estate what Amazon did for shopping. What AirBNB did for travel. What Tesla is doing for transportation. To simplify what can be an arcane and cumbersome process which is long overdue for modernization.
To accomplish this, Compass has a team of several hundred software engineers spread across the globe, building the “operating system for real estate.” They’re creating an end-to-end platform, increasingly powered by artificial intelligence (AI) that empowers consumers and their agents with tools, data, and services to simplify their lives so they can do a better job for their clients.
There is good reason to believe they’ll be successful in this endeavor. One of the co-founders of Compass is Ori Allon who is credited with building Google’s search engine. In 2018, Compass hired Joseph Sirosh, the former CTO of Artificial Intelligence at Microsoft, to spearhead their technology efforts.
For years, I have offered my clients what I called Concierge Services. I think I may have been a little ahead of the game in calling it that, because Compass has adopted that term, as have a number of competing brokerages like Redfin, Keller Williams, Sereno Group, and many more.
The guiding principal of my personal Concierge program is: whatever you need to make happen to get the home sold, I will take care of it. Whatever it takes, so long as it’s legal and ethical, I will see to it that it gets done. All so that the client has the best possible experience, with the least amount of hassle, risk, and uncertainty.
But there was a missing ingredient in my Concierge program: cash. While I would often front small-ish amounts of money to my clients, I didn’t feel comfortable investing tens of thousands of dollars to help clients tackle larger-scale projects. If you have a 2,000 square foot home that needs new paint inside and out, new flooring, plumbing and electrical fixtures, perhaps a roof or who knows what else – the cost of all that work can easily soar into five, or even six, figures.
Enter Compass Concierge. The Compass Concierge Program will lend home owners up to 5% of the list price of their home. At zero cost. No fees, no interest, no payments, nothing. It’s a short term loan, due at closing (or within 12 months of issuance or if you terminate your listing agreement). Borrow $50,000, pay back $50,000. That’s it.
This solves perhaps the single biggest problem most of my clients have when getting their home ready for sale. Many people have hundreds of thousands of equity in their property – but have little actual cash, and may not qualify for a Home Equity Line of Credit, for example (which will probably cost them thousands of dollars to obtain anyway) for reasons like insufficient income or credit.
Now, with Compass Concierge Capital, my clients will have the money they need to make the improvements they need to make so their homes sell quickly, easily, and for the very highest price possible. And I’m still there working with them and their contractors throughout the process to make sure that everything that gets done is performed with an eye towards quality and maximum return on investment.
The Operating System for Real Estate
There are many more things which impress me about Compass – their bridge loan program, for example, also solves a thorny problem for many of my clients. Their integrated marketing system, their “Coming Soon” platform, and so much else.
But what really strikes a chord for me, personally, is that they have the goal of creating the operating system for real estate. They are creating a seamless, end-to-end platform that will harmonize the sale and purchase process to make my job easier while at the same time removing so much of the hassle, stress, and inconvenience that buying and selling real estate is notorious for.
Compass is moving the real estate industry into the modern era, which is sorely needed and something I am totally on board with. Their ambitions are very closely aligned with my own goals, so in many ways Compass feels like a very natural fit. Through their impressive and growing collection of services and software, Compass delivers a level of value that, in my opinion, is currently unparalleled in the real estate industry.
I’m all about delivering superior value to my clients, and that’s what Compass is about, too. Real value. Value that means a better experience, and, ultimately, more money gained or saved on the sale or purchase of a home.
A New Beginning
So there I was, in late summer of this year, looking at what Compass (and other brokerages) brought to the table. It struck me like a lightning bolt that joining Compass was something I owed it to my clients to do. Closing my own brokerage was bittersweet, and there are many things I will miss about being a Broker/Owner of a tiny independent real estate firm.
But it’s not about me: it’s about my clients. I have always believed that by doing the right thing by my clients I will, in the end, do right by myself. I’ll let the Universe work out just precisely what that all looks like, but for now, it’s full speed ahead for me with Compass, helping everyone find their place in the world.