May 5, 2019 4 Comments

Word on the street is that Compass is on the cusp of closing on the purchase of several of the remaining independent brokerage firms in the East Coast wealth corridor — NY, NJ, CT, FL. They are also reportedly getting into the property management business in Manhattan through the purchase of at least two property management firms. The whisper is that the purchases of all the firms on the list would be ~$200M.

Control over the building documents in NY would allow them to roll out their discount brokerage portal matching buyers and sellers directly within 24 to 36 months. It would allow them to cut agents, clawing back some or all of their stock. All in all, would make the company much more profitable. It would also put more pressure on Realogy and NRT — possibly pushing many of their brokerages out of business, and giving Compass a dominant position.

The Manhattan market is important, because that market has so many wealthy people with multiple homes around the world. So if they lock that up this year, they could dominate that client base through consistent communication and service.

Does this sound accurate? Feasible technically / financially? Could Compass prove to be much bigger competition for Zillow than originally believed? It increasingly looks like a good investment.


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TOP 4 Comments
  • Compass RHIO67
    If you've heard the CEO speak enough, you'll realize that Compass will always be agent centered and never cut out agents. He is all about them. His mom is a real estate agent. Some people in Compass actually complain that he places agents above all else: above employees, above customers. So while acquisition of brokerages is plausible, cutting out agents would be unthinkable.
    May 23, 2019 1
    • Compass uuuuuuu
      Agreed. Right or wrong, Compass prioritising agents is the central idea that drives everything we do. Agents are prioritised over staff.
      Dec 15, 2019
  • This comment was deleted by original commenter.

    • OP
      So, absent any expertise or insight you are being rude and dismissive. Stick to substance or be silent.
      May 6, 2019
  • I am not sure about their model completely but it makes sense for path to leadership. Meaning, acquire agents trust and loyalty (incumbent distribution), own the market and when ready, revamp the entire distribution model including agents agreements/ commission splits, etc, because agents and buyers will be reliant upon compass and new infrastructure. Pretty smart!
    Dec 22, 2019 0


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