In May of 2021, I wrote an article about Compass. I was extremely complimentary of both Compass and their CEO Robert Reffkin, but I called into question their valuation which made absolutely no sense at all to me. To illustrate the point, I drew a comparison between Compass and Realogy. Although there are some differences between both companies (Realogy also operates a huge franchise business), a significant chunk of Realogy’s revenue comes from their company owned brokerage which shares the same traditional model as Compass’s core business (where agents typically work on splits ranging from 50% to 90% - depending on their sales volume). Below are the numbers based on the time of original article:
Interesting perspective Glenn. It is great to see some truly innovative companies. Looking back, there has not been much change in decades. Most have been simple tweaks or a fancy wrapper on the same models. The companies that are truly agent centric and allow the agent control over running their business, instead of just doing transactions should win in the long run. Discounters, though may seem beneficial to the consumer, can weaken the ability for professional agents to offer good service and protect their clients best interests. Thanks for sharing.
Interesting perspective Glenn. It is great to see some truly innovative companies. Looking back, there has not been much change in decades. Most have been simple tweaks or a fancy wrapper on the same models. The companies that are truly agent centric and allow the agent control over running their business, instead of just doing transactions should win in the long run. Discounters, though may seem beneficial to the consumer, can weaken the ability for professional agents to offer good service and protect their clients best interests. Thanks for sharing.