Compass realtors and staff volunteered today to help with the 36th Annual Holiday Baskets put on by the Community Resource Center of Encinitas. It is a fantastic event where families below the poverty line receive food, clothes, presents, and bikes:
Today we attended the soft opening of the new Compass office at 1953 San Elijo Ave., Suite 101 in Cardiff By-the-Sea (next door to Cicciotti’s). More than 100 Compass agents will occupy both floors eventually (63 now).
Other offices being built include a 22,000sf, ground-level office in One Paseo in Carmel Valley, which will be the central hub for San Diego. Compass will be the exclusive residential real estate office in One Paseo, and have the valet parking right in front, along with 100 parking spaces.
The downtown Encinitas office on Coast Highway 101 will probably be the next to open early next year, plus there is another 11,000sf office being built out at the Equinox center in La Costa, which will be the new HQ for the Klinge Realty Group.
Compass started in San Diego in January, and we joined in July when there was 160 agents. By the end of this week, there will be 320 Compass realtors in the San Diego area!
We attended the Compass REtreat in Los Angeles over the last day and a half.
It was a quick get-together to roll out the future plans, participate in four breakout sessions on the usual topics – social media, team-building, scripts, and risk management – and attend the thank-you party last night.
I appreciate the effort, because the party itself was pretty impressive. Gourmet-food stations, open bar, and a 12-piece live dance band for the 2,000 Compass agents who attended (out of 7,500).
But the thing I respected the most was that the CEO, Robert Reffkin, stood by himself at the entrance and personally greeted every agent as they arrived.
No assistant, no senior staffers or entourage – just Robert by himself, fully focused on expressing his appreciation to each of us. Nobody does that.
They will be investing a boatload of money into the business, primarily in support of the agents being more effective in the coming years.
But it is the human connection with the agents, and commitment to our future together that will make Compass the leader in the industry.
Compass offices, nationwide:
End of 2017: 30
End of 2018: 150
End of 2019: 300 (projected)
Six months ago the company goal of 20% market share in the Top 20 markets nationwide sounded far-fetched. Today it seems very real – we have offices in each of those Top 20 markets, and just need to grow further.
More tip-toeing around the Coming Soon topic in Realtor Magazine yesterday:
The surge in off-market “pocket listings”—those held off the MLS in favor of secret channels and networks between agents or within a brokerage—is a growing issue in the real estate industry.
In markets starved for inventory, real estate professionals are struggling with being kept out of these secret dealings for homes that their buyers could potentially want.
In markets such as Los Angeles, for example, reports say that up to 30 percent of sales are being withheld from the MLS for the sake of more private channels, according to some brokerage estimates.
In response, some brokerages—and even MLSs—are looking for ways to expose these listings to a larger audience. One of many recent launches in the past month came from the brokerage Compass, which allows its real estate agents to post their listings to Compass’ website days before sharing them with the local MLS and third-party portals, like realtor.com®. “Compass Coming Soon” is available nationwide in markets where the brokerage operates.
“This will help our agents get a head start on marketing while still getting the property ready for market,” Compass CEO Robert Reffkin reportedly shared with Compass real estate professionals in an email. “By harnessing the power of pre-marketing, [the listing] actually shows up twice in everyone’s alerts: once when it hits Compass.com, and again when it hits the open market, doubling potential exposure.”
Pacific Union International, which Compass acquired in late August, had launched its own solution to handling the disruption from the growing prevalence of pocket listings in May with “Private View,” debuting $400 million worth of exclusive property offerings. But its portal of off-MLS listings can be viewed by any registered users—real estate professionals from other brokerages as well as the general public. Registered users can see exclusively signed listings before they’re publicized on the MLS. The portal is currently available in northern and southern California.
“Our agent-to-agent portal allows our sales associates exclusive access to Long & Foster properties that are not yet in the MLS,” Barry Redler, chief marketing officer for The Long & Foster Companies, said in a statement announcing the portal. “Having this platform not only allows us to respond to certain seller requests but also gives our agents a leg up on the competition by helping their buyers more easily find a home in a tight inventory market.”
MLSs are searching for the answer to expose these homes listed for sale, which the seller may wish to keep secret. The Chicago area MLS, Midwest Real Estate Data, launched the Private Listing Network in 2016 as a separate feed to share information to registered brokers about “coming soon” listings. These are not displayed publicly. MRED officials cite it as a way for real estate professionals in their area to premarket listings that aren’t ready to show yet or that are in the process of being renovated, repaired, or staged prior to being marketed publicly. It’s also a way to test the price, as a range can be entered.
But some brokerages and MLSs are taking a firm stance against the practice of pocket listings or “coming soon” forms of premarketing. Since 2013, Northwest Multiple Listing Service—serving the Seattle area—has prohibited its members from promoting or advertising a property until it is listed in the MLS.
Off-MLS deals amplify concerns about limiting exposure of the property “to a select group of agents to the detriment of the seller and other MLS members,” Tom Hurdelbrink, president and CEO of NWMLS, told REALTOR® Magazine.
Nobody wants to project how this will play out, but it seems obvious. Every brokerage will operate a Coming Soon program, and the MLS will become the marketplace of last resort.
When we made the decision to join with Compass, it was the future of the business that was a primary concern. The I-news summed it up well in their profile of Nick Segal, the founder of one of the SF brokerages recently purchased, and we could relate to what he said:
“The independent brokerage is going to face a very, very difficult time in the next three to four years. They don’t have enough money to invest in the growth of the business, their key people are going to start to realize they need to sacrifice the relationship with the brokerage (and go to a bigger firm),” Segal said.
“In order to take our agents to the next level we needed more tools, tech and a greater reach. We had to align ourselves with a bigger player, that was the mindset. Selling our baby was emotional but we knew it was best for the company and for individuals who were facing stiffer competition.”
In the beginning, Donna worked for Proctor & Gamble, one of the best-run corporate-sales teams ever. She appreciates the benefits of working within a structured environment, and with staff who provide meaningful support.
We want to be supported in being on the forefront of the tech revolution in real estate.
People complain that Compass isn’t really a ‘tech’ company, but all we need is a platform where all of the latest technologies are packaged up and linked together – and that’s what Compass is doing for agents.
Donna had these thoughts on the decision:
Our industry and the world is so dependent on tech – it doesn’t replace the importance of the agent/person and our relationships – but it is critical to our success. Having access to the best technology available is something that Jim and I both valued and knew that to have it – it would mean paying for it or working for a brokerage that offered it to its brokers/agents. Finding the best tech platform was a factor.
In the two short months here, Compass has rolled out more tools and technology to assist us than I ever thought possible, and the staff (which is significant) is 100% committed to making the lives of agents better.
We have staff dedicated to design/marketing, product education, agent operations, concierge, IT, etc. – all full time staff employees who’s job is to assist, help, support, and do what they can – so we can go do what we do – sell houses. It’s impressive the commitment Compass has to supporting agents. You will hear the CEO say, ‘agent-centric company’, and so far it is very true.
The decision wasn’t an easy one for us to go work for someone else – but as we made the choice – it felt right, and it still does.
The disruptors/discounters in our industry is another reason. It’s easy for the consumer to assume that small brokerages must discount their service and fee to compete. We wanted to align ourselves with a company that was all about being a full-serviced brokerage which is what we’ve always been – we do a lot for our clients. Compass is all about being a full-service company and is saying this loud and clear publicly – we want to be on that side of the equation.
Last and not least, as we considered companies to work with, we noticed who Compass has hired in San Diego County and we were honestly impressed with the list of agents in our area – top notch listing agents with great reputations. We also heard that they were not taking everyone; they were vetting their prospective agents carefully; and were committed to maintaining the culture of their company. This is something that mattered to us. Jim started Klinge Realty after being frustrated with some of the agents we worked with and not being proud of their business practices and ethics.
Mentioned yesterday in our meeting was the likelihood of Amazon getting into the real-estate selling business. It’s the only major industry that they aren’t involved with, and it seems inevitable that they will be a player some day. No one is sure yet how they will participate, but it’s coming.
The Great Real Estate Consolidation is upon us, and the landscape will look very different in the next 2-3 years. Small and medium brokerages are finding it difficult to keep up, and their agents are leaving for greener pastures. We are glad to have made the move early on, and appreciate what has been a great system and group so far!
We met our CEO, Robert Reffkin, and we were thoroughly impressed.
We come from different backgrounds – I’m the scrappy street guy, and he is the Wall Street wunderkind – but we see the future of real estate the same way.
He mingled for longer-than-necessary during the breakfast warm-up, and then spoke for about an hour on his vision of Compass, and creating a platform for top-producing agents to best serve their clients. Then he hung around for another extended period during happy hour, shaking hands and making himself very available to agents and support staff alike. He exemplified leadership in the best way.
It is a contagious environment!
Since January, Compass has hired 210 top-producing agents in San Diego (when we signed two months ago, there were 160). Most importantly, there are also 54 full-time support staff, which is unheard of in typical real estate brokerages.
There will be some consolidation coming to the real estate industry, and eventually the consumers will have a choice between taking their chances with discount fees for minimal service or hiring top professionals to deliver superior service and results (Wal-Mart vs Nordstrom).
We’ll do a second post on this topic, which won’t include how old I feel. I was the only one wearing a tie, and black shoes. This is a younger crowd!
The most fascinating thing about working for Compass is how many people ask about Compass (especially other agents). I signed up primarily for the future potential, and where big money might lead us.
We got another sense of how big yesterday:
Compass, a real-estate marketplace startup, raised $400 million in an investment round that will bring the company closer to an eventual initial public offering.
After the investment, the New York-based company will have a $4.4 billion valuation, a person familiar with the matter said. The financing will help Compass expand its real-estate technology into more cities, including outside the U.S., the firm said in a statement.
The Softbank Vision Fund and Qatar Investment Authority are leading the round, Compass said. The company expects growth in 2018 to double to almost $1 billion in revenue, according to the person, who asked not to be identified because the information is confidential. Compass makes its money by taking a small cut of each transaction coordinated by its real-estate agents. The company said it’s on track to post more than $34 billion in sales volume this year.
“We will continue to capitalize on our momentum nationally and internationally,” said Ori Allon, the company’s co-founder and executive chairman.
The latest funding brings the total raised by Compass to $1.2 billion. Besides international expansion, Compass is seeking to enter related businesses beyond property listings, such as mortgage title transfer and moving, CEO Robert Reffkin said in a June interview.
“What books were for Amazon, the brokerage model is for us,” Reffkin said at the time.
On the same day, the same bank announced the same for OpenDoor:
Growing direct homebuyer Opendoor now has $3 billion in financial backing (yes, that’s “billion” with a “b”) thanks to a sizable new investment from Japanese technology company SoftBank Group.
Opendoor announced Thursday that it secured a $400 million investment from SoftBank Vision Fund, SoftBank’s investment arm.
That investment pushes Opendoor’s total equity capital raised above $1 billion – $1.045 billion, to be exact.
In addition, Opendoor said Thursday that it also recently secured $2 billion in debt financing from unnamed “top banks,” meaning the growing company now has more than $3 billion in total funding since it first began buying and selling houses in Phoenix and Dallas-Fort Worth in 2014.
Since then, Opendoor has been growing by leaps and bounds and raising money hand over fist.
Opendoor is now operating in nearly 20 markets, including Atlanta, Charlotte, Dallas-Fort Worth, Las Vegas, Nashville, Orlando, Phoenix, Raleigh-Durham, Tampa, and San Antonio, and has plans to into California, the Pacific Northwest, and several other areas over the next few months.
Opendoor’s next market expansions will be in Sacramento, California; Riverside, California; Denver, Colorado; Portland, Oregon; Austin, Texas; and Jacksonville, Florida.
And the company plans to be operating in 50 markets by 2020.
"Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community... more "
by Ann Romanello
"Jim educated us, helped us find the perfect house, and then negotiated us a great deal. I would hate to be sitting across the negotiating table from ... more "
"Jim is thorough and will be brutally honest about the homes he shows you. He provides great service and follows through until the very end and even ... more "
"I highly recommend Jim as a buyer’s agent. Working with Jim, we closed this week on a San Diego condo. Jim prepared a list of comparable sales to ... more "