A remarkable achievement considering that Compass has only been a nationwide company for 3-4 years.
It will matter more later too.
CoStar is going to change the search-portal landscape, and if they spend enough advertising money to get all the eyeballs, the buyer-agents will be cooked. Unlike Zillow and Redfin who encourage viewers to contact their own set of agents, CoStar will direct people back to the listing agent of each property.
You can imagine the advertising that could change everything:
“Would you rather be represented by a third-party who doesn’t know a thing about the house in question, or do you want to speak to the listing agent who knows everything about the property – including how to get you the best deal?”
CoStar got a head start when they bought homes.com, and are rolling out their first version this summer in New York City.
Buyer-agents will be forced to join realtor teams who have the listings, or just fade away.
Who has Compass been recruiting for the last four years? That’s right, the realtor teams.
After just missing the top spot in a 2021 brokerage ranking, Compass has come out as the largest in the United States in terms of closed sales volume.
Real Trends cited rapid growth in terms of agent count and rising home prices for the brokerage’s debut in the No. 1 spot based on 2021 earnings reports.
“In less than 10 years, we went from nothing — not existing — to #1,” CEO Robert Reffkin wrote in a company-wide email celebrating the ranking.
“You can now tell every past, present, and prospective client that you are part of the largest brokerage in the country. You can have confidence that your referral network is officially the best in the United States,” Reffkin wrote. “And you can take pride in the fact that your success is a vital part of something much, much bigger.”
Compass has 26,000 agents in 69 markets, according to its fourth quarter earnings. In 2021, the company added nearly 7,000 agents and launched 25 new markets.
Overall, Compass agents closed 225,272 total transactions in fiscal year 2021, up 56 percent from 2020. The gross transaction value reached $254.2 billion, an increase of 68 percent from the year prior.
The company was aided by rising home prices and increased migration, which defined 2021.
Real Trends noted the ranking does not reflect the company’s place in the overall 2022 RealTrends brokerage rankings, which will be released at the end of March.
I’ll be interested how those teams view their recent statement to cut agent splits. Stock price is one third the IPO and they need to stop losing money. I think the middle tier agents will accept the pay cut but the mega teams may not.
Any gains picked up from tweaking the commission splits will be offset by those teams leaving. I hope that occurs to them!
Compass’ distinction as the largest firm was made based on its 10-K annual report, which states that the firm’s total sales volume for 2021 was $254.2B. This data would have placed Compass in the No. 1 spot on the 2022 Power Broker Report, surpassing Realogy’s more than $246B reported sales volume for 2021. However, a representative of Compass confirmed to RISMedia that its 2021 total sales volume includes commercial real estate transactions, making the data inadmissible.
For 34 years, RISMedia’s Power Broker Report & Survey has ranked firms based on closed residential sales volume and transactions only. Compass declined to provide RISMedia with its residential-only sales volume and transaction data and, therefore, could not be included.
How much of Compass’ $254.2B sales volume represents commercial transactions?
According to a Compass representative, it’s a “very small amount” based on the fact that only about 1% of Compass agents are responsible for commercial transactions. Compass reported 26,257 agents in the Power Broker Survey, which would mean about 262 agents handling commercial transactions. Could that account for its $8B advantage over Realogy? Without the reporting of Compass’ exact residential sales volume, we’re unable to officially say.
(I doubt the Compass commercial volume was more than $1 billion, and it could be as much as $7 billion and we’d still be in first place. The author doesn’t include Compass and then advertises that Compass isn’t #1? Cheap shot)
* REALTRENDS just came out with brokerage rankings – the TOP 4 largest brokerages (by sales volume), COMPASS had the fewest agents BY FAR….about 26,000. All three others had an agent count of 45,000 or more.