The Rise of Compass Real Estate
The real estate company, Compass, is now valued at $4.4 Billion, which has doubled since its valuation last December. San Francisco was introduced to the company this year with its billboards, fancy For Sale signs, and acquisition of two real estate brokerages.
Where did it come from?
Founded in 2012, Compass was formerly known as Urban Compass.
It was a New York City startup providing a service that enables people to search for listings on its website and mobile app, book and arrange viewing times right on the site, schedule to meet with a rep at your designated viewing times, provide helpful advice about neighborhoods, and assist with dealings with landlords on your behalf. The reps were salaried-employees with no bonus incentives or commissions. The company’s business model in the early stages made money in two ways: by splitting fees with other brokers (where you pay 12.5 percent of the annual rent) and by adding a 7.5 percent charge to listings it manages on its own. Most NYC brokers typically charge around 15 percent of the annual rent, but when they work with Urban Compass, both sides take a 7.5-percent cut (Urban Compass also reduces its own side of the fee by half to drive the charge down to 12.5 percent). With every successful transaction raking in thousands, Urban Compass won’t need many customers to actually be successful.
Today, Compass as a company has evolved overtime.
It is building the first modern real estate platform, pairing the industry’s top agents with technology to make the search and selling experience intelligent and seamless. It has a platform that helps home buyers, sellers, and renters find properties across the U.S. It also provides data and analytics to agents and those who require insights into trends in local areas.
The company has acquired San Francisco-based Paragon Real Estate Group and Pacific Union this year which formed the city’s largest brokerage. With agents and teams serving communities coast to coast, the company has quickly rose up the ranks among the country’s largest owned luxury brokerages.
Founders Ori Allon and Robert Reffkin (below) has put together a team of the sharpest, most creative and experienced professionals and innovators across technology, real estate, marketing, and finance. And they are all working together to continually develop the company’s integrated platform and solve real estate’s many complex challenges.
“You might think of Compass as the equivalent of the launch of the first iPhone to the various other smartphones that preceded it” – TechCrunch.