20% over asking price
Some of the most admirable real estate agents I know are affiliated with Compass. Some of them love it, some are ambivalent, some are itching to move.
Same with managing brokers. The talent Compass has acquired here is significant.
The company no doubt employs many brilliant, passionate, well-meaning employees.
But I have, and continue to be, of the opinion that Compass is a cynical enterprise — an artful misdirection of epic proportions.
I see Compass as a traditional real estate brokerage. It builds lots of technology, and has invested in tons of top-shelf tech talent, but is not, in my view, anything like the transformative “tech company” story it continues to tell.
The company’s biggest competitive advantage is money, in and of itself.
Some Compass agents use the software the company builds. Some do not. I don’t believe it matters: the tech tools ultimately serve their purpose as set pieces in a very expensive theatrical production.
If you’ve been reading what we write for a while, you know that we rarely speak this way. We may not always like what big, powerful companies in our industry do, but we try, from the outside, to understand, and even appreciate, what they are after.
I admire Redfin immensely for their dogged pursuit of a mission to “redefine real estate in the consumer’s favor,” even though I don’t think their way of going after that is always on target.
I understand Zillow’s ambition to make it easier for people to “move to life’s next chapter,” even if I am uncomfortable with some of the industry impacts, because they are at least clear about what they are if you take the time to listen.
Both of these companies (and many others) are building something new, whether we like it or not.
Compass is furiously spit polishing something old.
The disconnect between story and action is not just about tech. It lives openly in the company’s “Compass Private Exclusives” strategy. Here we see a company whose stated mission is to “help everyone find their place in the world” literally hiding the ball with inventory.
I have Compass on my mind because of an article The Real Deal published this week (subscription required) about former and current Compass agents struggling with the consequences of contracts they willingly signed. One could certainly view this as a “hit piece” wherein a journalist corrals just enough disgruntled people to form an unflattering narrative about a company. And, sure, “haters gonna hate” on any big, successful business.
But it nonetheless illuminates so much about what has troubled me about Compass all along: that it depends, ultimately, on a combination of brute financial force and peoples’ willingness to buy into a story that too often has a happy ending only for those telling it.
Need to know (stuff I thought was interesting or important this week):
Redfin is buying RentPath, which owns Rent.com and ApartmentGuide.com, for $608 million. This is the strongest indicator yet of the convergence of Redfin and Zillow’s trajectories. Z has moved into the transaction; RDFN is going after audience growth among renters it can, over the long-term, flow into homeownership through its brokerage business. These two companies have never been friendly, but now they’re playing for keeps.
@properties announced its first franchise and Realogy’s Corcoran seems to be doing quite well out of the gate. The “indie” trend is a thing. Indies seeking the security of an established brand and tested systems is also a thing.
States Title has secured $150 million in debt to “wipe the slate clean” on the transaction experience. The company has raised a total of $380 million. This is yet another move/investment building upon the pandemic-boosted drive toward a more digital process. This is hard work, and not the sexiest on the surface, but may be the most significant thing happening in our space right now.
CoStar isn’t ready to let CoreLogic slip from its grasp. The company upped its offer price after CoreLogic’s board announced its intention to sell to a pair of private equity firms two weeks ago. Keep an eye on this. If CSGP prevails they’ll own Matrix, the leading MLS system software, at the same time Zillow owns Showingtime, the dominant property showing solution (which is tightly integrated with Matrix for many MLSs.) Yowza.
That’s it for now. Have a safe and peaceful weekend.
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