Hello, Compass. Thank you to everyone for flying across the country to be here in Denver together. I want to spend the entire speech talking about an incredible, groundbreaking concept: private exclusives. I may spend a little time on it. Today, I'm going to share where we are, where we're going, and how we're going to get there.
But first, there's a lot of noise in the background. Now, at Compass, we're no stranger to noise. We're no stranger to negative headlines. We have a long history of avoiding the noise. How many of you remember when Compass was coming into your market? Did you hear competitors say Compass is going to fail? Raise your hand. Right? Basically, everybody.
So, I thought I could bring you down memory lane. The goal is to show you these headlines are nothing new. Who here remembers when there was a national Real Deal cover story that said, 'My prediction is that they're going to go out of business in 5 years. Sorry, Robert Reffkin, Mauricio Umansky, The Agency.' And then in the same article, the CEO of Douglas Elliman said, 'I don't believe it's going to take that long.'
Or what about this one? Just a couple years ago, Business Insider, I wake up in the morning, national headlines: 'There is no fixing Compass. It's unfixable.' That was Jason Oppenheim. And in Bloomberg News: 'What they are doing doesn't make sense. The question is how is it sustainable?' That was Bess Freedman, Brown Harris Stevens. 'Nobody goes to Compass for a software solution.' That was an Inman piece. And my favorite of them all, particularly for this group: 'Compass's referral network is practically useless.' So, how many people here raise your hand if you got a referral from another Compass agent? All right.
Now, my mom told me a long time ago: don't focus on the headlines, focus on the trend lines. And so, that's what we did. We said, we're going to create the trend lines. We raised billions of dollars to invest in the future of the agent, to invest in things that would help you grow your business. And the result was we became the number one brokerage firm four years in a row.
Now, pretty good for a company that should have gone out of business. Now, the moment we're in, there's a different type of noise. This noise isn't just coming from competitor CEOs. This noise is also coming from organized real estate. Now, what is organized real estate? NAR, MLSs, Zillow: entities that create mandatory rules on how real estate agents must be organized, on how you must work with your clients. And if you do not follow these rules, you'll be fined or banned.
They create these rules because they need your listings. If they don't have your listings, it puts their business model at risk. Everything in this moment is about choice versus control. Who is going to be able to decide how homes are marketed in this country? Will it be controlled by organized real estate, dictated by them in fear of bans and fines? Or will the homeowner with their agent be able to decide how they market their home?
I have two goals. One for the home seller and one for the agent. For the home seller, I want them to be allowed to decide when, where, and how their home is marketed. For the agent, I want your name, your brand, and your full contact information back on your listings.
Now, this shouldn't be—just look at this for a moment. This should not be the fact that you have to fight for this. It shows how far we have fallen. How much organized real estate over 20 years has taken more control. 30 years ago you wouldn't have to fight for these things.
Now, people ask me all the time. They say, 'Robert, why are you fighting so hard every day, every weekend? Why are you thinking about us all the time? Why, why, why?' I will explain to you why. Two reasons. One, because this is simply right versus wrong. Organized real estate dictating how you work with your clients is wrong.
The second is that Compass only exists to help you grow your business. If we cannot help you grow your business, we have no reason to exist. You are my clients. I work for you, not the other way around. And it is my job to give you an advantage. It is my job to give you an edge with your clients. It is my job to help you grow, save time, and better serve your sphere of influence.
And so, when we come up with something that helps, I want to do more and more and more of it. And so, I'll ask you: raise your hand if the Compass three-phase marketing strategy helped you get a listing. Now, look around. Look around for a moment at all these hands raised. That's why I am fighting so hard, because it helps you, and that's my job: to invest in anything that can help you with your clients.
And the reason why organized real estate is fighting back is they do not want the three-phase marketing strategy to exist because three-phase marketing strategy means there are listings that are not on their platform. Period. That's all it is. They want all activity, all transactions in their platform.
I want to share a story. Five weeks ago, I go to an open house, and you know, I like to go with my wife and my family. I don't know if my family likes as much to go as I do, but every Sunday we put it on social media often and we want to support our agents. And so this is Esteban Gomez. It was a private listing, but it was his first private listing. And I asked him why the client wanted to do a private exclusive. I sat right on those red chairs and I remember saying, 'So tell me, why did the client want to do a private listing?'
He said the client wanted to test a record price and knew that if you test a record price on the open market with the portals, if you are wrong, you will have a public price drop that will make you look damaged. He said the client understood that there is no way to publicly test a record price without the risk of looking damaged if you don't get that price.
He then told me because there wasn't time pressure from days on market that he was only doing showings between 4:00 and 5:30 when the sunset was coming down in Tribeca. Smart, strategic. He then tells me that he emailed all the top agents using the Compass network tool across brokerage firms and also put it on social media and said reach out to him directly if anyone wants to bring a buyer across firms. He said the majority of showings were agents at other companies.
When I left, there were two agents from different companies. One was from Brown Harris Stevens, one was from Douglas Elliman. And they were standing outside with their clients. I heard one of the clients say, 'I can tell this is going to sell quick.' Because there was demand. 15-minute blocks for all the showings. Demand outside. Everything was strategic, thoughtful. It created exclusivity, tension, scarcity.
Ultimately, he got a record price. The client got everything that the client wanted and more. The buyer paid for the transfer tax. Now, why did the buyer pay for the transfer tax? Because he was able to say, given all the visible demand, that he said to the buyer's agent, 'My client is willing to sell this to you without going to the open market, without having you face the competition of an open market, if you pay for the transfer tax.' And then the buyer said, 'Okay, I'll pay for the transfer tax.'
In this scenario, everyone won. The seller got their record price and the transfer tax. The agent looked amazing. The buyer agent looked amazing to their client from a different brokerage firm—it came from The Agency. And of course the buyer was really happy because they found something that met their dreams.
I asked Esteban at the end. I said, 'What did your client say?' And I remember he looked at me. He said, 'What did my client say? What did my client think? He thought I was a magician.' Think about that. My job. That is the happiest thing I could ever say here. An agent saying, 'Robert, this thing that you're investing in made my client feel like I was a magician. It gave him the pride, the dignity to feel that way.' And this thing organized real estate wants to end. We cannot allow that to happen.
What he did also, you should know, is against both the MLS rules and Zillow rules. I want to be clear. His MLS, like many MLSs, will not allow you to put a private listing on social media. His MLS, like many MLSs, will not allow you to email agents at other companies about a private listing. Zillow's new rules will not allow you to email agents at other brokerage firms your private listing.
So this thing, this system that allowed him to look like a magician to his client and get a record price for his client, organized real estate will not allow him to do. That's just not right.
And at Compass, we have fought over and over again to create things to give you an edge and advantage with your clients. We invested in Compass Concierge. Over a billion dollars of our money we put alongside your sellers. We lost a lot of it, too. Not all your sellers paid us back. We put a billion dollars of our money with your sellers to make homes move-in ready: staging, deep cleaning, cosmetic repair, so they sell for more money in less time to help you get a listing. And that is an example of what we do.
We invested in technology like Compass Collections, yes, or Compass One Marketing Center, Reverse Prospecting, Business Tracker, Likely to Sell, Make Me Sell. Now the number one traffic traditional brokerage site. We have agent branding, Compass three-phase marketing, top referral network, Compass coaching, and events like this.
So now I want to let you go behind the scenes. Let's start with: what is NAR? NAR is the largest trade association in the country, both by number of members—1.5 million agents—and by dollars. NAR plus the state association, local association, and MLS are estimated to generate over $2 billion a year by charging you dues, annual dues. They have mandatory rules that are designed to keep it this way.
So, let's say there's the three-way agreement. That's one of the rules that says if you want to access the MLS or the state forms, you must pay your national, state, and local association. National is NAR. Then there's rules like clear cooperation, which are designed to make sure that there's never a competitor to the MLS. Because let's just imagine if you didn't need to use the MLS. Let's say there's a national listing service, not 500 local services. If you can get all of your listings and share with a national listing service, you didn't have to use your local MLS.
How many of you would stop paying NAR if you didn't have to? So that's why these mandatory rules exist. If you were the CEO of NAR, you'd do the same thing. They're trying to protect their business model.
Clear cooperation was not a rule against private listings. You must know that. Every headline will say it, but it's not true. Here's the proof. In your market, how long can you do a Compass private listing? How long can you publicly market outside the MLS? One day. So, clear cooperation is not a rule against private listings. It's a rule against publicly marketing outside the MLS. Because if we could, how long would it take for a national entity to come up and let us share all of our listings outside of the local regional MLS? The Bay Area has five MLSs. Who wants five MLSs in the Bay Area?
Now, how did this entity—how were they able, when they're not the government, they're not elected officials, to force every homeowner in the country to give them the listings? Well, it doesn't hurt that they're the biggest lobbying organization in the country. They spend more money lobbying government and elected officials than any other entity in the country. $86 million of your money. It's not their money, it's your money. That's three times big pharma. That's four or five times Amazon. Amazon's $19 million, and it's a $2 trillion company.
Ask yourself: for the $86 million of your money that they spent last year lobbying the government, what do you have that you didn't have a year ago? Other than lawsuits. Maybe wrong question. Let's slow it down. Well, look, what do you have in the last four years? Did they give you healthcare? What? Like, what did they give you in the last period of time? I know what they gave themselves. They gave themselves a new headquarters, launched four years ago with your money.
Your money paid for this. That's their boardroom. Three floors high. The chandelier probably costs a million dollars. This is the room where rules like the fines are approved. NAR approved the MLSs. Of the 500 MLSs, they own 80% of them. They're all interconnected. They allow their MLSs to fine you up to $15,000 per listing. They said that's them. They will let them fine you up to $15,000. The average agent makes $50,000. Under what world is this okay? What other trade association fines their own people? Just think of that. What other trade association would even consider fining their own people for something that the government wouldn't even think is unethical, like putting a sign in your yard?
These are not made-up fines. These are real for real people. This is an agent, one of our agents, who was fined $2,750 after tax money for putting a sign in her yard. And she didn't put it in the MLS for more than a day. It was $2,500 was the actual fine, but there was a $250 processing fee. See on the left where it says 'ethics fine'? If you put a sign in your yard breaking clear cooperation and you don't put it into the MLS in one day, that is considered an ethics fine. See on the bottom? 'Thank you for your patronage.'
If there's anything that shows you they are a monopoly—no company can get away with fining someone $25 and saying 'thank you for your patronage' if you had choice. This is the evidence you do not have choice.
And it's not just a one-off. This is the largest MLS in the country. CR stands for California Regional. California Regional MLS. They have over 100,000 agents in their MLS. This is their MLS citation policy. There are over 80 fines. These are just fines for agents. If you ask me, Robert, in 10 minutes make up 80 fines for agents—I don't think I could figure it out. I don't know how you could come up with 80 fines. Of these fines, 34 are $1,000. Of these fines, 10 are $2,500. This is about what's right or wrong. Choice versus control.
So, now I'm going to bring you deeper behind the scenes. I'm going to start by sharing with you a video of Rob Han, who's a real estate analyst, interviewing one of the top Wall Street analysts for real estate companies. And the point of what I'm trying to share with you is: all the real Wall Street analysts I know, when we talk about what's happening, they all know NAR and Zillow and MLS rules aren't designed to protect the consumer. They're designed to protect the listing supply chain, which is you. Here you go.
