Today, Ryan Gorman, the CEO of NRT which owns Realogy (Coldwell Banker, Century 21, Corcoran, etc.) took a major shot at Compass.
He released this two-page ‘questionnaire’ for his agents to use when interviewing with Compass, but he sure comes off as desperate and paranoid:
Help-Agents-Avoid-Being-Thrown-Off-Course-by-a-Spinning-Compass-CB-NRT
Our CEO, Robert Reffkin, shrugged it off, which is fine and what he should do:
“What you talk about is a representation of what you are focused on,” Reffkin said. “We don’t tear down competitors, we don’t pay attention to the noise, what we focus on is empowering agents.”
But as a Compass guy, I’m going to address some of Ryan’s specific concerns for those consumers and agents who might be curious and want to know the truth:
1. Robert Reffkin told us that because we’re in the Top 20 markets, the company was going to concentrate on supporting and growing those already in play – which sounds great to us agents. I don’t know how you rate the Top 20, but here’s where we are: Atlanta, Boston, Chicago, Dallas, Denver, Houston, Los Angeles, Miami, New York City, Orange County, Philadelphia, San Francisco, San Diego, Seattle, and Washington D.C., plus nine other smaller cities – which makes 24 markets. Close enough.
2. Compass agents grow their business quickly after joining Compass? I don’t remember that claim specifically, but every agent knows your business usually takes a hit when you change companies. Ryan said York at MoxiWorks contradicted the claim, but that’s not true. York said that the Compass market share was lower than claimed, but he checked the Compass production only, when Compass said it was the agents’ cumulative total for the year. Agents count their annual sales volume, regardless of their brokerage, so the Compass and MoxiWorks measurements were apples and oranges – for Ryan to misconstrue what happened is disingenuous.
3. Ryan says Cigna isn’t our insurance company, but looks like they are to me:
We saved $4,000+ per year and have a lower deductible.
4. Ryan claims Compass is losing money and wants to know about the turn-around plan? There’s $1 billion in the bank, and Compass will likely do an IPO in the next 24 months. But agents are focused on selling homes – if we make any money on stocks or stock options, it will be icing on the cake.
5. Ryan said that Compass ‘strongly encourages’ agents to use the in-house tools. Nobody has ever asked or told me to use the Compass tools. Furthermore, the Compass agents I know are all seasoned professionals who used their own tools long before working at Compass.
After his release went public, Ryan said this:
“I believe competition raises the level of play, and I welcome it,” Gorman said. “But when a competitor fails to uphold the basic ethics and integrity that this industry has together worked so hard to build, and puts the people I care about in jeopardy, I cannot sit on my hands.”
“The ‘talk’ coming from Compass behind closed doors is disturbing, and yet even in public forums, such as this publication, the inconsistencies, exaggerations and flip-flops by Compass executives are deeply concerning.”
The NRT sales volume is around 5x what we sell at Compass, and this guy goes ballistic over half-truths and innuendo, most of which is wrong or inconsequential? Why?
You don’t have to post this Jim but they did raise about a billion in the last year or so and with their burn rate it can’t be anywhere near a billion anymore. The stock we were offered were merely stock options and they wouldn’t say what the exercise or strike price would be to convert to stock. The NRT guy is blowing smoke on several subjects but is on point with some as well. What turned us off is we signed a NDA and they promised not to recruit our agents when we were in negotiations yet they did anyway. We lost trust at that point but I do hope it works out for you and Donna.
Thanks Jim.
It was a good idea for Compass to slow things down this year and concentrate on supporting the existing people. You know me, I’m just a periphery guy so I’m observing as neutrally as can be for someone employed by Compass, and it’s not a surprise to hear your concern. The employees seem to all have their different roles without much cross-checking in place to know what others are doing, which can be seen as passionately committed or rambunctious.
It was obvious to us coming in that there were going to be growing pains – it’s a company full of non-realtors trying to support realtors, which must be like herding cats. It’s gone better than expected!
Agree on the stock options – it’s a private company with little to no guidance on what to expect from any stock benefits, so just icing on the cake (if any).
The NRT guy and his comments are not incidental, nor the last we’ll hear from him and others. The war is on now.
What could have been a battle between the superior full-service realtors vs. the scumbags will instead now turn into brokerages tearing into each other.
It’s not just a bad look, it is destructive to the consumer’s psyche and opinion.
So you know, I have been directing to Compass brass my clear and specific instructions on how we can win the war. Stand by – we’re just getting started! And keep that Compass invitation open!
P.S. When the billion runs out, then IPO!
Also, the Compass CV office at One Paseo is going to provide incredibly powerful exposure for the agents.