During the Sept. 12, 2024, Walker Webcast, Walker & Dunlop President and CEO Willy Walker went in depth with Compass Inc. Founder and CEO Robert Reffkin about his company’s differentiators over other residential real estate companies. The hour-long event occurred live from the Zelman Housing Summit in Boston, MA.

After a brief discussion about Reffkin’s background (raised by a single mother and long-time real estate agent, graduated from Columbia University, and was a White House Fellow, among other careers), the talk turned to Compass’ founding in 2012.

At the time, Reffkin had envisioned the company as an apartment rental service, but that didn’t fly. He decided to move to a traditional residential real estate sales firm and immediately set out to determine the first differentiator—specifically, the target client.

In this case, the target client isn’t the buyer or seller.

“The buyer and seller don’t pay Compass directly,” he said. Contractually, the agreement signed is with the brokerage firm. However, the agent, as an independent contractor, is the one who generates income for Compass.

With the “agent as client” philosophy, Reffkin embarked on differentiator number two. A novice in the industry, he asked agents what they wanted from a brokerage company. “There’s a benefit of not knowing anything about the industry,” he said wryly. “There’s no preconceptions.”

In 2012, the top four things agents asked for were a positive corporate culture, marketing help, overall support and technology. More than ten years later, agents’ needs have changed. “Now it’s indisputably technology,” Reffkin said. “When I ask every principal agent why they come to Compass, 90% of the time, it’s technology.” Culture comes second.

This led to another differentiator: Compass’ technology platform. The company invested $1.6 billion to create the technology and spends $100 million annually to help it grow, with the agent (not buyer or seller) as the end user. The goal has been for the multiple tasks, platforms and software involved to be combined into one seamless platform.

Reffkin commented that an agent working with another agent needs to input their name, address and other information into a comparative market analysis (CMA) site, as well as listing sites, customer relationship management (CRM) software, a transaction management platform, and an open house app. And that’s just for starters.

“Imagine the time it takes to input that across many different areas,” Reffkin commented. “We’re not there yet, but we’re very close to being able to say that at Compass, you never have to write the same thing more than once. That’s the dream.”

Another goal is for agents to conduct business entirely on their mobile phones. Reffkin said that few options exist for this purpose, so “we’ve taken the real workflow of an agent and put it on their phones.”

With corporate culture, Walker pointed out that agents are 1099 workers—in other words, independent contractors. Reffkin responded that it didn’t matter. “These agents are salespeople,” he said. “They’re constantly training.” They also need to belong. To that end, Compass invests in coaching events, cultural activities and economic summits. Reffkin said he regularly hosts agents at his house for weekend barbecues and Shabbat dinners on Friday nights.

Compass also has a strict work-in-office mandate. Reffkin said, “You can’t build a great culture virtually.”

Walker also asked about the housing market’s current state—Reffkin said that the dip in mortgage rates has led to the sense that things are picking up—and the results of the settled broker commission lawsuit against the National Association of Realtors.

Reffkin said that when asked by a group of agents about the impact of commission changes, 10% said that their business would decline, 30% said that it would remain the same, and the remainder indicated that it would grow. The idea that buyer agents would have to negotiate commission rates with their clients did not bother Reffkin.

“They’re professional negotiators,” he said. “They’re extremely good at what they do, and negotiating is what they’re being paid for.” An agent willing to accept a discounted commission rate leads to questions about how well that agent will perform when negotiating the value of a home, Reffkin added.

Walker’s final question was where Reffkin sees Compass by 2032, 20 years after the company’s founding. Reffkin mentioned a 30-30 vision—30% market share in 30 top markets. Other goals include total integration of all services during and after a real estate transaction on a single platform so that no one has to input the same information more than once. Additionally, “no client would ever challenge the commission in a conversation because they get so much value from their agent, and with the full platform we offer, we’ve elevated the perception of agents in this country,” Reffkin commented.

On-demand replays of the Sept.12 Walker Webcast are available through the Walker Webcast channels on YouTube, Spotify and Apple. Subscribe to get invites, replays and articles for new Walker Webcast episodes every week.