Robert Reffkin wants to make Compass the go-to site for real estate listings

The compassA plan for future success? Become a real estate listing agency. Brokerage founder and CEO Robert Reffkin outlined his company’s plans for the future during its third-quarter 2024 earnings call with investors and analysts on Wednesday.

“Inventory remains the backbone of the residential real estate market,” Reffkin said. “At Compass, we already have a wealth of assets in our local markets that are unmatched.”

One of the firm’s main goals is to achieve an average market share of 30% in its top 30 markets. Achieving this goal, Reffkin said, will improve the company’s competitive advantage by increasing the number of lists its agents have and the number of contacts in their customer relationship management (CRM) platforms.

“By growing our inventory, we believe more buyers will search Compass.com and use Compass agents, as it will be known that Compass has more inventory than any other website or brokerage,” Reffkin said.

“This innovation advantage includes not only our active inventory, but also leads from our Make Me Sell program, which allows Compass agent clients to provide a sale price for their home in our CRM.”

Reffkin believes that the Make Me Sell program, which will be fully launched in all markets by 2025, will help consumers by creating opportunities to find more items. It should also help Compass become a property and listings hub, attracting agents and buyers to the company looking for properties they can’t find anywhere else.

“Ultimately, our North Star is using our depth of innovation to create better results for sellers, buyers and our agents, which, as a business, translates to better results for Compass and our shareholders,” said Reffkin.

Although Reffkin’s vision for Compass may seem simple, there is one small roadblock: i The National Association of Realtors’ Clear Cooperation Policy (CCP). Under this policy, listing agents have one business day to list a property on the MLS once they begin to publicly market the property. No wonder Reffkin has become a critic of the CCP and is calling on the NAR to overturn the law.

According to Reffkin, CCP “infringes” on a seller’s choice of how they want to market their home.

“We don’t think this is right. Homeowners shouldn’t be forced to do anything they don’t want to do,” Reffkin said. “The future we are creating is that buyers will be able to search Compass.com, as it has become known as the place where homeowners list their homes early, with Compass Private Exclusives and Compass Coming Soon, which will protect them from exposure to the MLS. .

“For many homeowners, their home is their most valuable asset. It is suitable for the most important marketing. Eligible for hedging against MLS exposure. “

In Reffkin’s opinion, no homeowner wants the number of days their property has been listed, its history of price reductions, crime reports or weather-related risk data to show up with their listing.

“Powerful real estate websites use this information to power their sales model to third-party agents,” Reffkin said. “In the same way that tabloids use negative headlines to attract readers, real estate websites use negative information to attract buyers.”

Reffkin noted in his remarks that professional home builders and developers are not included in the CCP. He says repealing the CCP will “level the playing field” for existing landlords who want to compete with builders.

Industry experts who support CCP say repealing the policy will hurt buyers, make the home search process more challenging and work harder for buyers and their agents. Reffkin addressed these criticisms during the Q&A portion of the call with analysts, noting that many critics highlighted the challenges of buying a home in some states without an MLS.

“A lot of these other countries, it’s not as difficult as it was 10 or 15 years ago,” Reffkin said. “But look, I’d like to be able to search everything in one place. I would like to continue Netflix and see any show I want, but that’s not how a free and fair market world works. There is something called competition, and different companies come and make different offers.”

For now, time will tell if Reffkin’s big play to develop Compass’ internal listings platform will pay off. The NAR advisory committee recently refused to make a decision on the CCP, referring the matter to its leadership team.

Meanwhile, with CCP still active, Compass has managed to record another strong quarter of growth. In Q3 2024, the company’s revenue grew 11.7% year over year to $1.5 billion. The number of its transactions increased by 16.1% to 55,872 with a total sales value of 57.7 million dollars, which is an increase of 13.4% compared to the previous year.

Additionally, Compass increased its number of primary agents by 20% from last year to 17,542, while its national market share grew to 4.8%, from 4.31% in Q3 2023. It also posted cash flow free of charge of $32.8 million.

Compass management is sticking to its guidance that the company will have free cash flow through 2024, a first for the brokerage. But despite its growth, Compass still recorded a net loss of $1.7 million for the quarter, an improvement over the $39.4 million loss recorded in Q3 2023.

Related