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Compass S-1

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Re: Compass S-1

#81

Post by benhoyt »

santa_boy wrote: post #77
benhoyt wrote: post #70

Earlier quoted context omitted.

Compass is partially funded by SoftBank, but the rest is not true -- there's a whole lot of tech behind it (source: I used to work there as a software engineer). It's mostly tools for agents, and some tools for consumers. They pull in dozens of real estate feeds, normalize and index them and make them searchable; they have a decent app for agents to keep track of listings and contacts; they have a marketing tool that…

I am working on a real estate product for agents. Wondering if you can critique / provide inputs on a SaaS model for agents. Could I email you? Thx!

Not sure if you were replying to me, but sure, go ahead -- my email is on my website (which is in my profile).

Re: Compass S-1

#82

Post by adeelk93 »

dillondoyle wrote: post #67
DevKoala wrote: post #24

Earlier quoted context omitted.

It looks a lot like Zillow. Do they also advertise mortgage rates? I couldn’t find that. That is one of my favorite Zillow features.

That's my guess at where real disruptive $ could be; actually vertically integrate and originate loans + sleeker/lower fee real estate transaction. If they corner enough inventory they could probably eliminate many human agents too

I said this elsewhere in this thread, and I’ll say it again here: what you’re describing is Redfin. They’ve been originating loans for a couple years now, and creating that efficient vertical integration.

Re: Compass S-1

#83

Post by bostonsre »

nrmitchi wrote: post #46
bostonsre wrote: post #37

Earlier quoted context omitted.

Why haven't commission percentages gone down over time? It seems like a massive margin that should be trimmed down by competition. I would think there would be more than enough room to under cut the standard rates, cover costs and still make a healthy profit. Is there a low supply of realtors that causes them to be in high demand and helps them keep up their commissions or something like that?

The National Association of Realtors controls a huge percentage of real estate transactions, and works to make sure it doesn't drop, to the point where there are multiple open anti-trust lawsuits. For example: https://www.justice.gov/opa/pr/justice-department-files-anti... Basically, if you don't play the Realtor game and agree to pay those commissions, it's difficult to participate in the market at large.

Ah, thanks.. that makes a lot more sense then. Hopefully the justice department stops that BS rent seeking crap.

Re: Compass S-1

#84

Post by dillondoyle »

adeelk93 wrote: post #82
dillondoyle wrote: post #67

Earlier quoted context omitted.

That's my guess at where real disruptive $ could be; actually vertically integrate and originate loans + sleeker/lower fee real estate transaction. If they corner enough inventory they could probably eliminate many human agents too

I said this elsewhere in this thread, and I’ll say it again here: what you’re describing is Redfin. They’ve been originating loans for a couple years now, and creating that efficient vertical integration.

sounds like a good business model!

though redfin doesnt seem to have online listings anymore though (maybe they never did but i thought they used too).

carvana's experience is pretty great. a house is not the same as a car, but still seems like there could be a lot of improvement still

Re: Compass S-1

#85

Post by boh »

bostonsre wrote: post #78
boh wrote: post #47

Earlier quoted context omitted.

This comment is in reference to the voting rights attached to common shares. This would have likely not been covered in your history classes.

> There's no case to be made that "super control" inherently leads to unethical behavior. You are saying it like it's been proven. What are companies where is gone well? I can't think of many examples whether inside or outside of the market where absolute control has gone well.

Voting rights don't give you "absolute control".

Re: Compass S-1

#86

Post by tamade »

jankassens wrote: post #38
rossdavidh wrote: post #23

Earlier quoted context omitted.

If you're making a purchase/sale of several hundred thousand dollars, having someone with you who has done this many times before is easily worth 5% or so. Is every agent good? Well certainly not. But it's a high-stakes transaction that most people have never done before, or have done only once before, so having a veteran of many such transactions walk you through it is easily worth a few percent of the total cost.

I'd love to see the typical breakdown of where those 5% go in a hot market like San Francisco. At a median price of $1.5mil, that's $75k in commission. I never bought a home, but that seems like it should buy a lot of services.

The typical 5% is split 50/50 between the buyer and seller brokers and paid by the seller. If the agent represents both sides, there's usually a discount, e.g. 4% total. Additional broker incentives, e.g. extra 0.5% to the buyer broker, may increase the commission

Re: Compass S-1

#87

Post by username2021 »

nyc_pizzadev wrote: post #28

I have been house hunting lately and my agent works for Compass. The website experience kind of sucks. Horrible mobile experience, lots of UX glitches, it’s just annoying to use. In fact, half the time we are using StreetEasy to look at listings (they are a local competitor). Other than that, your buying experience is completely based on the quality of your agent and how well he can navigate your market. Not sure how…

StreetEasy is owned by Zillow

Re: Compass S-1

#88

Post by username2021 »

RobLach wrote: post #44
Axsuul wrote: post #2

Compass is a real estate technology company that provides an online platform for buying, renting, and selling real estate assets. https://www.compass.com

What's the technology?

Keller Williams was the Compass of the 2000s, has more robust technology, more market power, and 10x more agents. They are closing 100s of billions in gross sales each year. Compass can’t touch them or their model.

Re: Compass S-1

#89

Post by username2021 »

benhoyt wrote: post #70
dvt wrote: post #63

Earlier quoted context omitted.

There's no technology, it's WeWork 2.0 (heck, it's even funded by SoftBank).

Compass is partially funded by SoftBank, but the rest is not true -- there's a whole lot of tech behind it (source: I used to work there as a software engineer). It's mostly tools for agents, and some tools for consumers. They pull in dozens of real estate feeds, normalize and index them and make them searchable; they have a decent app for agents to keep track of listings and contacts; they have a marketing tool that…

It’s a tech enabled brokerage but not a tech company. It’s a services company. The technology ingesting a bunch of IDX feeds and making them searchable is decades old functionality that literally every large brokerage in the country has. Redfin is far ahead in the agent technology space and operates far more effectively. If they classify as a technology company then so does every competing brokerage in the space (Keller Williams, Coldwell Banker, etc)

Re: Compass S-1

#90

Post by username2021 »

adeelk93 wrote: post #82
dillondoyle wrote: post #67

Earlier quoted context omitted.

That's my guess at where real disruptive $ could be; actually vertically integrate and originate loans + sleeker/lower fee real estate transaction. If they corner enough inventory they could probably eliminate many human agents too

I said this elsewhere in this thread, and I’ll say it again here: what you’re describing is Redfin. They’ve been originating loans for a couple years now, and creating that efficient vertical integration.

Zillow does this at greater scale than Redfin. Coldwell Banker also has an affiliated loan arm of their business (Princeton Capital). The difference is that Redfin is a broker whereas Zillow is not. Zillow has 20x the traffic and reach of Redfin plus the originate mortgages and provide instant offers. Because Redfin and Compass are brokers, they have more legal restrictions on how they offer these services to others that limits their reach
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