compassWhat are your plans for future success? It will be a hub for real estate properties. Robert Levkin, the brokerage’s founder and CEO, revealed the company’s future plans during a Q3 2024 earnings call with investors and analysts on Wednesday.
“Inventory listings continue to be the lifeblood of the residential real estate market,” Levkin said. “At Compass, we already have unparalleled inventory in many of our local markets.”
One of the company’s main goals is to achieve an average market share of 30% in the top 30 markets. Levkin said achieving this goal will increase the company’s competitive advantage by increasing the number of listings held by agents and the number of contacts on its customer relationship management (CRM) platform. .
“By increasing our listing inventory, more and more buyers will search Compass.com because it will be known that Compass has more inventory than any other website or brokerage. , will utilize Compass agents,” Levkin said.
“This inventory advantage includes not only our active inventory, but also latent inventory through our Make Me Sell program, which allows Compass agency clients to sell their homes in our CRM. We will be able to offer you a reasonable sales price.”
Mr. Levkin believes that the Make Me Sell program, which will fully launch in all markets in 2025, will help consumers by creating the potential for more inventory. It will also help Compass by making it a hub for inventory and listings, attracting agents and consumers who come to the company looking for properties they can’t find anywhere else.
“Ultimately, our North Star is to leverage our deep inventory to create better outcomes for sellers, buyers and agents, which in turn, in turn, translates into better outcomes for Compass and our shareholders.” said Levkin.
Reffkin’s vision for Compass may seem simple, but there’s one slight stumbling block. National Association of Realtors Clear cooperation policy (Communist Party of China). Under this policy, listing agents can list a property on the MLS within one business day after a property is put on public sale. Not surprisingly, Mr. Levkin has been a vocal critic of the Chinese Communist Party and has called on the NAR to repeal this rule.
Mr. Levkin said the Chinese Communist Party is “infringing” on sellers’ choices about how to market their homes.
“We don’t think this is right. Homeowners shouldn’t be forced to do anything they don’t want to do,” Levkin said. “The future we are creating is where homeowners will be known as the place to list their home early through Compass Private Exclusives and Compass Coming Soon, and where buyers will search Compass.com. The future is to be protected from the risks of MLS exposure.
“For most homeowners, their home is their most valuable asset. It deserves the most valuable marketing. It should be protected from MLS infection risks.”
In Refkin’s view, homeowners don’t want to be shown along with their properties things like how long their property has been listed, its history of price reductions, crime reports, and data related to climate risk.
“Powerful real estate websites are leveraging these insights to power their models of selling buyers to third-party agents,” Levkin said. “Just as tabloids use negative headlines to attract readers, real estate websites also use negative insights to attract buyers.”
In his remarks, Levkin pointed out that professional home builders and developers are excluded from the Chinese Communist Party. He argues that repealing the CCP would “level the playing field” for existing homeowners looking to compete with builders.
Industry experts who support CCP argue that repealing the policy will harm buyers and make the home search process more difficult and cumbersome for consumers and agents. Mr. Levkin addressed this criticism during a Q&A on a conference call with analysts, noting that many critics have highlighted the challenges of buying a home in other countries without an MLS.
“In many other countries, it’s not as difficult as it was 10, 15 years ago,” Levkin said. “But it would be nice to be able to find everything in one place. I would love to continue doing that. Netflix You can watch whatever show you want, but a free and fair market doesn’t work that way. There is something called competition, with different companies coming in and developing different products. ”
For now, only time will tell whether Mr. Levkin’s grand plan to strengthen Compass’ internal listing platform is successful. The NAR Advisory Board recently declined to make a decision on CCP, leaving the matter to the leadership team.
Meanwhile, with the CCP still in place, Compass was able to post even stronger quarterly growth. Q3 2024the company’s revenue increased 11.7% year over year to $1.5 billion. The number of transactions increased 16.1% to 55,872, with total sales of $57.7 million, an increase of 13.4% year over year.
Furthermore, the number of Compass’ major distributors increased by 20% year-on-year to 17,542, and its domestic market share increased to 4.8% from 4.31% in Q3 2023. Additionally, free cash flow was $32.8 million.
Compass executives stand by their guidance for the company to have positive free cash flow for the full year of 2024, a first for the brokerage firm. However, despite the growth, Compass still posted a net loss of $1.7 million in the quarter, which was an improvement from the $39.4 million loss it posted in Q3 2023.
