Below is a letter from one CEO calling out Compass Real Estate on their exaggerated claims on how they brought the real estate industry into bringing in high tech tools for home buyers:
I have to call you out on your boastful approach to an industry that we all know and love. While we agree that there’s a great opportunity to employ technology in ways to make both the consumer and agent experience better, we don’t think you need to resort to the trash-talking and grandstanding that we’ve heard from you – you’re better than that, and frankly we don’t want you to tarnish a (real estate) industry that has funded the creation of the very technologies you now claim credit for.
You claim to have started the tech talk in real estate.
In your recent LinkedIn post titled Before Compass, Technology Was Barely Mentioned in Real Estate you said: “As it relates to technology, Compass truly revolutionized an industry that had become complacent and had fallen behind terribly.” In just a few words, you risk losing your credibility. The first wave of brokerage tech took place in the 1990’s. For instance, Windermere Real Estate, just one example of many, launched Windermere.com in 1995, creating the first known brokerage website, and added a complete suite of agent tools by 2000.
Since then, Windermere, Long & Foster and Howard Hanna have funded MoxiWorks, whose platform and tools now help make 60 brokerages and 110,000 agents better at what they do. Other obvious examples of innovative technology use in real estate include Zillow (founded in 2006), Redfin (2004), and the long list of startups that have been hard at work for decades, funded by hundreds of millions in capital that was invested prior to your founding.
And stated by your head of product Eytan Seidman in his recent Built In Chicago interview, Compass claims to be “the first and only company to bring engineers together with agents under one roof.” Yet Windermere, Long & Foster, Howard Hanna and countless other leading brokerages have had software engineers and agents working side-by-side in their brokerages to evolve real estate technology since the mid-1990s, developing the technologies, data exchange mechanisms, and standards you now rely on.
You claim to create all your own technology. And speaking of untruths, your CEO Robert Reffkin has publicly stated, “We build everything in house, and all the tools and support is in house.” But anyone can look at the websites you run and see that they’re licensed from MoPro, that you’ve licensed MailChimp as your email marketing tool, and that you licensed Honey for your internal social network. These are all fine choices, but you don’t “build everything in house,” so why the distortion?
Your CEO Robert Reffkin recently claimed in a live interview on CNBC that Compass “just launched Seattle five weeks ago and we already have 5% market share.” We took it upon ourselves to do a deep dive into the data – the Moxi Cloud Open Platform now contains the data for 90% of the home sale footprint of the United States, so like everyone out there with access to MLS data, we can calculate your actual market share in any of your markets. For example, that data shows that for the Seattle metro area, the best you could claim is 0.7% of transactions where Compass was either the listing or selling agent. That’s a far cry from the 5% you claimed. Your CEO Reffkin also said Compass “is the only company empowering agents.” That’s not credible, so why say it other than to antagonize the industry you’re clearly a part of, and in business with on the other side of many of your transactions?
You say that your goal is to “improve the lives of agents.” You pay six figure signing bonuses “to less than 10% of your agents” and claim 98% retention, yet notable agents flee to their former brokerage as soon as the contract is up. We did a deep dive into that data too. For agents that joined Compass any time after January 1, 2016 and have left Compass since, the average tenure was only 245 days.
Bottom line. The tech stack you tout is something every other brokerage can quite literally replicate on the open market – many already have. Compass may not be a brokerage that is great at building technology (that has yet to be seen), but you are a brokerage that is great at integrating the technology you buy, and you happen to build some of your own tools too. That sounds like Windermere, Long & Foster and others before they recognized that choosing the best mix of tools from the vendors that use the $1B of capital invested annually into real estate technology was a better strategy.
Side note to all the brokerages out there: You are investing in tech. Keep your independence. If you haven’t already, choose a platform, whether that’s from MoxiWorks or from any one of our worthy competitors and mix the unique set of agent tools that match your brokerage value proposition and business style. That’s all that Compass has done, only their platform isn’t open, which means they don’t have the flexibility you’ll have.
Compass’ strength of integration is one MoxiWorks has already built and established – nothing new here. The Moxi Cloud has been available to our customers for exactly this purpose for three years and has over 40 partner companies whose products work with it, sharing and contributing to the broker and agent data in the platform for the benefit of all. And we’re not the only ones – many of our competitors have similar abilities, and brokerages are mixing their unique blend of technology to support their value propositions just like you are.
We set out to better the industry, not terrify it or antagonize it. Consider this open letter an invitation. Consider it an opportunity for you to set the record straight.
York Baur, CEO of MoxiWorks
I’ll have more Compass blog articles coming out in 2022.
Updated: Boston Real Estate Blog 2022