Interview with Compass CEO Robert Reffkin | San Francisco Real Estate Podcast

Interview with Compass CEO Robert Reffkin | San Francisco Real Estate Podcast


hey hey hey and welcome to the San
Francisco real estate podcast with your host Matt Morgus alright that’s me
early podcast 7:00 a.m. Thursday morning September 20th 2018 we have a very
special guest today very very very special guest today before I jump in
with my very special guest I’d like to say you can download this podcast easily
just by going to iTunes and searching for San Francisco real estate podcast or
there is a podcast button on your smartphone you can just pick up your
smartphone open up the podcast application search San Francisco real
estate podcast and Wham you’ve got it go back and check out all the old
episodes and the archive and binge listen awesome so my very special guest
today without further ado is Robert Reffkin the CEO of Compass he’s also the
co-founder of Compass and we’re gonna talk about real estate here in San
Francisco Robert welcome to the show awesome thanks Robert
good morning so we have live a lot of questions for you and I think a lot of
people in San Francisco buyers and sellers of real estate consumers of real
estate here in San Francisco have a ton of questions first I want to say
congratulations on the recent acquisitions of Paragon and Pacific
Union you want of course yeah you once told a story to our San Francisco office
about your experience meeting with Softbank in Tokyo would you mind talking
about the recent acquisitions and how these deals came about at University
High School and so it has a very special place in my heart also you know one of
the reasons why we that’s watched around the country in the
world if things can happen successful they can they can work anywhere so
that’s really you know why I’ve been a big part of our focus you know I I met
with the heads in both cases if you can clear we’re all doing the exact same
thing we’re all trying to help our agents working so hard with them as the
primary client and really reinventing the wheel multiple times over and that
if we just come together we would be able to help invest more in building the
future for you know for our agents yeah I think there’s a feeling that there’s
not an agent or a brokerage firm that is created in the future of the brokerage
business that we operate every day but that coming together we would be able to
do sir yeah and at this point with the merger I guess it’s an acquisition what
percentage of market share does Compass now have in San Francisco and in the Bay
Area and how does that benefit buyers and sellers at this point do you think it helps buyers and sellers is the more
we can get great agents in one platform and one company the number one driver of
the experience for a buyer or seller is the quality of eregion period the seller
may do two or three the agents can do everything else they’re their adviser
into at Compass what we’re doing is we’re giving agents much more support
more marketing more technology to allow them in really more time to allow them
to better serve their clients okay gotcha gotcha yeah no that definitely
makes sense and I could feel it from an agent level there’s definitely been a
shift in the real estate community in the brokerage community and and I at
first a lot of a lot of agents and friends of mine were we’re really you
know skeptical to say the least you know there’s a new kid on the block and some
people feel that there is a tech bubble out there right now and some people feel
that maybe what am I trying to say I don’t know I guess I guess I’ve had I’ve
had friends in the past just say beware of of tech money right now coming into
the real estate market what would you say to that to people who are skeptical
of just having a bunch of cash and are in the company’s pocket willing to spend
it willing to invest it in real estate agents and and the brokerage community they have their clients buyers and
sellers so from my clients perspective the agent I think they should be
rallying behind compass because we have effectively a billion dollars of money
to invest in their future and nobody else is investing all the other money
that’s going out there is to discount agents devalue agents replace agents and
so there’s no reason to be cynical if you want to be single about compass it’s
almost like saying hey let’s just support you know let’s just give up unfortunately the brokerage firm model
just a financial model of a traditional brokerage firm doesn’t has names that
generate enough money to be able to invest in a meaningful way
and so if you were to dream if you’re an age and you’re gonna dream about the
future for your small business yeah because you’re a v8 it’s the CEO of
their own company if you want to dream about what what’s the best way world
that you can have the best kind of system where the best marketing the best
technology that’s culture of this community the best referral network the
best platform the best digital insights and you know and mobile tools if you
want to dream that out there is only one company that’s trying to create that
even trying but I think there’s never been anything great that’s happened in
anyone’s life that has been driven by fear it’s it’s yeah it’s driven by
positivity by big dreams every come in and your stunt
you know big or small every product that’s been created was someone’s dream
it wasn’t someone’s fear wasn’t someone skepticism and so I’m an entreprenuer
with my clients me not renewer and I try very hard to encourage our team and our
agents and plant employees to be big dreamers loved it
know I love it I think I think people need to hear that message especially a
lot of the agents out there who who are still in question about compass whether
it’s it’s here to stay or or if it’s if it’s gonna be gone tomorrow but I think
for me personally I agree with you 100% I think that you are spot-on when you
when you say that now compass is known for acquiring some of the top real
estate agents in the country I mean some of these agents been working for decades
in the business and maybe at the end of their career and some are just starting
out what is your pitch to agents to bring their clientele their talent and
their skill sets over to Compass how do you recruit some of the best agents what
what is your what’s your spiel some agents want and somebody just one-time
stunt agents want more marketing support I think the one more technology support
somebody just want more culture some it is want more want to be a part of
something bigger bigger in terms of like a national company where they can bring
buyers from other markets to their sellers some agents want to be part of
building the future they want to be part of the Apple for real estate in my entry
here we tried you know we’re working on many things and so we were launching
health care for all agents up to three percent off a lot of everything
shouldn’t want that everything definitely ones that is unless they’re
on a family with a spouse we launched interest-free loans for agents through
something called the eating betterment fund so they can invest more in their
business and offer clients staging upfront and reimbursed where we we
launched a data pledge so people know they can come here and they’re Dina’s
gonna be protected and so we’re in a way we’re not a company capital firm for the
best ideas of agents what an agents want and we want to use the money that we
have right now who’s doing that right now who else is doing that I don’t think
anyone’s doing that right there’s the firm which either doesn’t have the money
but the small companies don’t have the money but they have the passion it’s a
respect them but they don’t have the you know the money to put behind the ideas
the big companies arguably have the money but they don’t have the
entrepreneurial drive the brokerage firms have a great idea the big dream
who do you go to can you go to your MLS is it hey can you build this for me can
you go to the now Raiders hey can you build this for me can you go to red fins
they can build this for me can you can you go to your burgers firm what will
they build up for it’s like you know there’s no there’s no outlet
these wonderful ideas but you know every challenge is opportunity because you
know we want to be the outlet and I know that if you take all the best ideas from
agents in the country and you put that into one company that will be the
perfect experience for agents and their clients and that’s we’re trying to do
with me a long effort and industry but yeah that’s what we’re trying to do and
what do you think the future of Real Estate’s gonna look like in 10 20 years artificial intelligence machine learning
and predictive analytics and there’s only one question will agents be
powering that technology or that technology of empowering agents and so
right now we’re in a world where agents are making technology work
you take something these big you know technology companies you know its agents
the things that are making them great they’re feeding them enjoy working with
their clients on them almost like they’re an MLS and so they’re making
those companies strong compasses wants to be the opposite we want to build
technology to make the aina strong sorry I want to build artificial intelligence
machine learning predictive analytics to work for the agents while the other
model is let’s get agents to use our tools give us less teams you know the
more the disruptors and we’ll we’ll use please double give us data to make the
technology stronger so that’s 20 years now and 10 years now I think the
majority of the brokerage firms that we know the names of today in the country
will not exist they are not getting better fast enough and and so if you ask
the average agent what do you have today what is your brokerage firm giving you
today they can give you a year ago 99% of agents say it’s nothing’s the
same thing we are in an Apple driven world people expect everything here
things get better and you know the ecosystem around the brokerage firm is
getting better so much faster than the agents and that’s why you know
agents are now using aggregators and rent and more than use their own
brokerage truck it’s on average you know their board list teams that eat it
you’re putting in aggregators and they are in their own brokerage month and so
as a result ETA’s are not paying brokerage firms as
much they did in the past they’re paying 5% less so basically in the last five
years the profit margins and a program went down three massan’s and so in the
next downturn it’s gonna be really really challenging for a lot of purplish
rooms and so I think we’re gonna see consolidation a lot of brokerage firms
are selling right now and the majority of brokerage firms most markets we ran
are selling the world shift from the consumers your clients thinking of you
as an agent in a brokerage firm to client thinking of you as effectively a
small business yourself and you’re on a platform instead of compass will be
viewed I think more and more over time as a platform with the best small
business owners entrepreneurs on top of it that are agents that are running
their own business and it will be a world where you when you talk to your
seller it’s not as they you won’t say hey you should work with you know first
versus this other company you’re gonna say you short of a John or chain right
you’re gonna be advertising yourself which is more authentic and genuine
anyway as opposed to just a company you’re gonna talk about your experience
in the neighborhood even doing this for 20 years that all the other agents that
80% of buyers come from agents and you know you have a great rotation the agent
community so when you call agents they don’t bring their buyers and this is
also a real estate coaches have been telling the agents do for over two
decades telling you to sell yourself and not the company and so I think it will
be a paradigm shift on how the agent is viewed and how the brokerage firm is
here I mean that’s that’s huge and who what other CEO out there of any other
real estate broker just saying you know pitch yourself pitch pitch everything
you’re doing the company is kind of second it’s in the background I mean who
else – no one doesn’t seem like anyone’s really doing
right now I love I love that about you you’re just honest and real about things
and how things are going to be in the future and what you think of the future
and just having opinions on this in general and willing to say it out in
public is pretty special and so I have incredible respect for agents and then I
want to see every one of them realize their dreams
whether it’s the dream to spend more time with your family and I’m yeah
or the dream to make more money to provide more for a family ya know that’s
that’s fantastic I want to shift gears real quick last question for you
personal question I’ve read that you are a marathon runner
is that correct million dollars for nonprofits a number of problems that I
went through in San Francisco so you’re not running anymore great great company
and it’s a great experience and and I still run a little bit with my two
daughters I have one of those like jogger
you know those joggers maybe put them inside them Robert thank you so much for
joining the San Francisco real estate podcast this morning I know it’s it’s
early for everyone recording this and thank you thank you
thank you thanks for everything you’re doing for the real estate
community out here in San Francisco and all the brokerage communities across the
country is there anything else you want to plug or say to the people of the
world you’re positive you want to be your best self you want to be you know
impact community around you and so thank you perfect Robert thanks
again and I’ll see you probably later today at one of the the meetings we’re
having so see you later and there you have it I’d like to thank a special
guest Robert Reffkin the CEO and co-founder of Compass you can check out
more about Robert just by googling him of course but you can also just go to
compass.com and check out the website from there thank you guys for listening
to the San Francisco real estate podcast you can download these episodes just by
going to iTunes and searching for San Francisco real estate podcast you can
also pick up your phone and go to the podcast application and just search on
San Francisco as a podcast thank you guys for listening and we’ll be back
next week goodbye

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