The Compass deal to buy Anywhere draws applause and alarm

After over a decade in the industry, real estate brokerage Compass has amassed its fair share of critics and supporters. While industry leaders may have differing opinions on the Robert Reffkin-helmed firm, most seem to agree that Compass’s deal to acquire Anywhere Real Estate is impressive.

“Congrats to Robert Reffkin,” Anthony Lamacchia, the broker-owner of Lamacchia Realty, said in a video posted on Instagram. “Have to give credit where credit is due. I am impressed.” 

Keith Robertson, the co-CEO of NextHome, also weighed in, writing in his Crazy Uncle Keith newsletter that the move was a “bold swing.”

“Hats off to Robert Reffkin and the Compass crew,” he wrote. “The kind of move that takes guts when everyone else is playing it safe.”

But despite these feelings, many real estate professionals are concerned about what this merger, which brings together the nation’s top brokerage by sales volume and second-best brokerage by transaction side count to create a firm with over 300,000 agents worldwide, may mean for listing access. 

Compass’ exclusive listing inventory

Over the past year, despite industry pushback, Compass has worked to grow its network of exclusive listing inventory. In acquiring Anywhere’s owned brokerage operation, as well as its franchise network, Compass now has the ability to create a vast portfolio of exclusive listings in many of the nation’s largest housing markets. This has led many industry experts to believe that Compass is putting itself in a position to remake access to real estate data, potentially challenging the stronghold MLSs have over listing data.

MLS executives, including industry veteran and San Diego MLS CEO Saul Klein deemed this news a “big deal” for MLSs, associations and other brokerages.

Mike DelPrete, a real estate industry technology strategist shared a similar take on LinkedIn. 

“In 10 years time, what I think this deal will be known for — the leverage it now gives Compass in its ongoing push for exclusive inventory, but really its challenge to the existing MLS, National Association of Realtors (NAR), and Zillow hegemony. Game on,” DelPrete wrote.

As the managing broker of a small brokerage in Wellesley, Massachusetts, Chip Stella has some concerns as to how a larger book of Compass exclusive inventory could impact his business. 

“As a business owner it hurts me as I don’t have access to that inventory for my buyer clients,” Stella, the managing broker of Rutledge Properties, said. “It also hurts Compass’s sellers. My firm is the number two brokerage in Wellesley, and if my agents aren’t able to find these listings they aren’t bringing their buyers to see them. It will hurt consumers all around.” 

In order to compete with this, Steve Murray, the co-founder of RealTrends Consulting, postulates that small and medium-sized brokerages may begin to form networks in order to share exclusive listing among themselves. 

The resistance to Compass’s private exclusive model ‘is dead’

Despite this possible work-around for smaller independents, other industry players are not optimistic about what this deal means. 

“Anywhere spent years resisting Compass’s private exclusives model. That resistance is dead. Now the world’s largest brokerage can lock up inventory, shut out competition, and choke transparency,” Greg Sher, the managing director of NFM Lending, wrote on LinkedIn. “Consumers lose choice. Small firms get crushed. This isn’t a victory for innovation. It’s consolidation by survival. And in this business, when Wall Street wins, transparency dies…..and agents pay the price.”

Sher isn’t the only one who believes this deal will have negative consequences for agents. 

Mario Deniz, the broker-owner of Deniz Realty Partners, a Florida-based independent brokerage, says that fewer brokerages in the marketplace will give agents less leverage on splits and fees.

“The real question: Will this merger create opportunity for agents, or just make it easier to squeeze them?” Deniz wrote in a LinkedIn post.

But while the news may have taken many by surprise, Ryan Serhant, the founder and CEO of SERHANT., was not one of them. 

“​​This is another example of what happens in mature industries. When innovation slows, consolidation grows. That is a standard corporate strategy, right? But real estate brokerage isn’t a commodity marketplace,” Serhant said in an Instagram post. “Large scale roll-ups, can prioritize scale, cost synergy, quarterly narratives for Wall Street, those can be perfectly valid corporate goals, but for agents and clients, scale does not automatically equal better outcomes. Consolidation doesn’t automatically equal innovation.”