NYC has always been, and hopefully will remain (if the powers that be continue to check each other against leaning too far in one direction) the epicenter of American business and innovation. Silicon Valley has tech, DC has the government, and Boston has…graduate degrees and healthcare? But these are all individual industries.
So it makes sense that NYC would be the birthplace of change in the real estate industry as well.
We have reached a point in Western society, capitalism, technology, whatever you want to call it, where single platforms are dominating entire industries. Google owns search. Amazon owns online retail. Airbnb owns short term stays. And then there are the other companies that came in “second” that have fallen by the wayside.
It’s like Sprite vs. Sierra Mist, Coke vs. Pepsi, Post-its and Band-aids versus…whatever the off-brand options are called. Second place means you aren’t the default. And being the default is important if you want to make the rules (for better or for worse).
Why am I writing about this? This week I’m focusing on Compass and its aim to become the single real estate platform. Because this movement is happening, and while there are many key competitors, Compass is the only one that keeps agents involved at the forefront.
Redfin, Zillow, and Opendoor are some of the other major players in real estate right now trying to transform the industry. Redfin, which I actually like, is a discount service for low-level transactions in markets that don’t see enough action to support a larger brokerage. Zillow aims to squeeze agents further and further for money, and has no plan for what to do when agents can’t afford to pay for their products anymore (which is why people are betting against their stock, HARD). And Opendoor wants to completely eliminate agents, which is fine in certain situations, but will never work in the luxury space or more complex transactions *cough*NYC*cough* and SHOULD NOT be the industry standard. Eliminating agents entirely across the board won’t happen, but that doesn’t mean that the “winner” of the platform race won’t be a company that discounts/discredits them.
Agents cannot be completely removed from the industry, but they can be screwed over. If the only options are the traditional brokerage (where we are viewed as employees and salespeople despite neither of those things being true), or the tech giant coming in and Zillowing all over us, lying to consumers and squeezing us with greater and greater fees to share our listings on their platform, then we will still exist, but we will have no power.
By contrast, if Compass “wins” this, agents will no longer have to pay Zillow or explain to their clients why we have value as people; we aren’t all sneaky gross scammers. So it seems kind of silly to watch other brokerages pile hate on us over and over again, waiting for the “fad” of technology to pass and rooting for us to fail. It’s not us versus you; it’s us versus the alternative: a world where agents have no power.
So I see the future of real estate, ideally, as a combination of Compass in luxury/major city markets, with Redfin on the ground employing a few agents on salary or for reduced commission. And I see services like Opendoor or other buyers available to the “always needing to get a bargain” type of seller who will fight and kick and scream over paying any commission whatsoever. 15% of people want to pay a premium for the BEST, 15% of people want to pay as little as possible no matter what, and the remaining 70% fall in the middle. Opendoor can take 15% of the market; I’m totally fine with that. And then there will be boutique, smaller brokerages. Even if I’m completely wrong about who will be left standing, I don’t think I’m alone assuming there will be major, major change over the next few years.
Real estate is a $217 TRILLION industry. It will be reformed, and it’s only a question of who is left standing. And I, for one, am betting on Compass (duh). Because #fuckzillowforever, and anyone who claims that “business as usual” will work isn’t looking at the amount of turmoil and turnover in the traditional brokerage community (70% of US agents work under a different CEO than they did 18 months ago). It may be easier to be angry at other agents, especially in a competitive market, but it’s better for all of us if we put our differences aside and bet on agents AND tech together, because neither is going anywhere.