Compass is a real estate brokerage that utilizes technology to connect buyers and sellers with qualified agents.
The company, which is headquartered in New York City and initially started out as Urban Compass, was founded in 2012 by Mike Weiss, Ori Allon, Robert Reffkin, and Ugo Di Girolamo.
Despite being only a decade old, Compass has managed to become the leading real estate brokerage in the United States. In 2021, it managed to close $254 billion in real estate sales while closing over 225,000 deals.
So how did Compass rise to prominence this fast? Primarily by developing propriety software that assists agents in their work and thus improves the overall client experience.
For example, Compass Insights provides agents with a personalized dashboard and helps them assess how to properly target customers. Its Marketing Center features a library of readily available designs, which can be deployed to create marketing brochures in minutes.
The growth of Compass was, furthermore, aided by the billions in funding that it raised. Investors, primarily SoftBank, poured a combined $1.5 billion into the company. This enabled Compass to scoop up the country’s best and brightest agents and acquire more than a dozen brokerages (it has spent more than $300 million on acquisitions since 2018).
Instead of paying commissions, its agents were (and still are) compensated with salaries, bonuses, as well as stock options. Those stock options could finally be exercised when Compass went public in April 2021, raising another $450 million in the process.
The company now employs over 26,000 agents who are not only busy selling residential homes but work on real estate development projects and count celebrities and professional athletes as customers.
Compass itself operates in 69 markets across the United States. In 2021, the brokerage generated $6.42 billion in revenue, up 73 percent from the previous year. The company still loses money, though (close to $500 million, in fact).
The methodology with which competitors of Compass are ranked is based on publicly available information. Data points such as the revenue generated, transaction volumes, number of agent partners, and anything else in between will be considered.
This analysis, in order to ensure comparability, looks at competitors that operate their own in-house brokerage (i.e., they employ the agents) as well as the ones that work together with agents via the tools they provide.
Additionally, only competition within the United States will be taken into account since this is the only country Compass operates in.
Lastly, this analysis should not be seen as an endorsement of any company or service. It merely acts as a summary of all the competition that Compass faces as of today.
So, without further ado, let’s take a closer look at the top 8 competitors of Compass.
1. Realogy Brokerage Group
Headquarters: Madison, New Jersey, United States Founder(s): Cendant Corporation Year Founded: 2006
Realogy is the second-biggest brokerage by sales volume in the United States (~ $244 billion) and thus the biggest competitor to Compass. Before losing its top spot to Compass, it actually was the leading brokerage in the nation.
Apart from the United States, it provides services in 117 countries and serves 50 of the 100 largest metropolitan areas in the nation. However, you won’t recognize its brand for too long. In May 2022, Realogy announced that it would rebrand Anywhere Real Estate Inc., which is expected to be completed later in the year.
Ten years earlier, Realogy went public on the NYSE, raising $1.08 billion in the process. The company works together with nearly 200,000 independent agents in the United States and more than 130,000 abroad.
Realogy, furthermore, owns a plethora of other brokerages including Corcoran, Coldwell Banker, Century 21, and more. These companies are all organized under one big holding company. It also offers the opportunity for other brokerages to join the group via a franchising agreement (to take advantage of Realogy’s brand recognition).
In September 2018, Realogy also expanded into the iBuyer segment (i.e., it now purchases and sells homes itself) via a partnership with BlackRock and KKR. For the fiscal year 2021, the firm posted annual revenues of $8 billion, up $2 billion from the year prior.
Sources: Real Estate Almanac, Realogy
2. HomeServices of America
Headquarters: Minneapolis, Minnesota, United States Founder(s): Berkshire Hathaway Year Founded: 1998
HomeServices of America is a subsidiary of Berkshire Hathaway, the holding company helmed by legendary investor Warren Buffett.
Apart from being the third biggest real estate brokerage by sales volume (close to $200 billion in sales volume in 2021), it also offers a variety of other services such as mortgages, insurances, real estate franchising, relocation, and more.
Much like Compass, HomeServices of America has acquired various other brokerages, such as Hegg Realtors (December 2021), over the past few years. Acquisitions continue to be the firm’s greatest growth accelerant.
Around the mid-2010s, before the ascend of both Compass and Realogy, HomeServices of America was actually the nation’s leading real estate brokerage.
It now employs around 45,000 agents and has sold 388,000 homes in 2021 alone. Unfortunately, Berkshire does not disclose how much revenue the subsidiary generates.
Sources: HomeServices of America
3. eXp Realty
Headquarters: Bellingham, Washington, United States Founder(s): Brian Culhane, Glenn Sanford Year Founded: 2009
Next on this list is eXp Realty, which is simultaneously one of the fastest-growing brokerages in the real estate industry. Founder Glenn Sanford started the company after he discovered he could get a lot more sales by solely focusing on online lead generation.
To this date, eXp largely operates online, which has allowed the company to remain nimble. Much like Compass, it also provides agents with a variety of software tools, including transaction management platform Skyslope, among others.
Its very competitive commission splits, stock options, and revenue sharing programs have, furthermore, enabled it to welcome new hires like there’s no tomorrow. In 2021 alone, eXp Realty added 30,000 real estate agents and now works together with over 81,000. It aims to cross the inaugural mark of 100,000 hired agents by the end of 2022.
Its exponential growth has translated to $3.8 billion in revenue and $156 billion in transaction volume over the same time span.
Apart from the United States, eXp also operates in Canada, the United Kingdom, Australia, South Africa, India, and a dozen other countries across the globe. Its parent company, eXp World Holdings, went public back in May 2018.
Sources: eXp Realty, Inman
4. Redfin
Headquarters: Seattle, Washington, United States Founder(s): David Eraker, David Selinger, Michael Dougherty Year Founded: 2004
Redfin is the fifth leading real estate brokerages in the United States. It mostly employs the real estate agents it works together with (as opposed to some other brokerages, which work together with clients on a commission basis).
The company differentiates itself from other brokerages by offering substantially lower fees. For example, if one decided to purchase a home with Redfin, then the buyer commission is split between the company and the buyer of the home.
Redfin is able to offer lower commission rates because it is a) technology-enabled but b) also offers comparatively fewer services to minimize cost. Most of the process is being handled via its app and website.
Where Redfin shines, though, is its online presence. The Redfin platform itself is visited over 44 million times – each month. Many users visit the site to get an estimate for their homes or simply check the prices of homes in proximity.
Moreover, Redfin currently accounts for 1.15 percent of all real estate sales in the United States, which is equal to around $52 billion in overall transaction volume.
It has utilized its data and reach to expand into iBuying back in 2019. Interestingly, it launched its iBuyer division, dubbed RedfinNow, in partnership with another iBuyer called Opendoor.
However, unlike many of its competitors, Redfin takes a more measured approach to buying homes. RedfinNow is currently only available in around a dozen states. Consequently, the company only purchases and sells homes in the low four-digit range.
Redfin generated revenues of $1.9 billion in 2021 alone. A quarter of that can be attributed to its iBuyer division while the majority is still derived from its brokerage business. Lastly, Redfin employs close to 5,000 people (counting both agents and other types of staff).
Sources: Redfin
5. Douglas Elliman
Headquarters: New York City, United States Founder(s): Douglas L. Elliman Year Founded: 1911
Douglas Elliman started out in real estate in 1903 when he worked for his older brother, Lawrence, at the real estate firm Pease & Elliman. Eight years after, he started the company that wears his name to this date in his own basement.
In 1964, eight years before he died, Elliman sold the company to Peter Jay Sharp who he had personally picked as his successor. Over the coming decades, he and the firm’s successive leaders grew it to one of the nation’s biggest real estate brokerages.
In 2021, Douglas Elliman accounted for $51.2 billion in rental and sales transactions. The company generated $1.35 billion in revenue over the same timespan, up 75 percent from the year prior. In December, Douglas Elliman spun off from parent holding company Vector Group and went public on the New York Stock Exchange.
The IPO added another $200 million to its cash balances. Douglas Elliman is particularly popular in the New York area but has since expanded almost nationwide. It currently employs close to 7,000 agents.
Sources: Douglas Elliman, New York Times, The Real Deal
6. Keller Williams Realty
Headquarters: Austin, Texas, United States Founder(s): Gary Keller, Joe Williams Year Founded: 1983
Keller Williams is the world’s largest real estate franchise, which is the exact reason why it’s lower on this list. As a franchisee, it allows other brokerages to operate under the Keller Williams brand and thus offer the same products and services.
After becoming the largest brokerage in Texas, Keller Williams began to expand across the nation in the early 1990s. In 2012, now the second-biggest brokerage in the United States, Keller Williams opened its first international office in Vietnam under the Keller Williams Worldwide (KWW) brand. That same year, it also opened offices in Indonesia and South Africa, with dozens of other countries following in the years thereafter.
In 2021, its agents closed $532.2 billion in sales volume in the U.S. and Canada alone (another $12.1 billion could be attributed to KWW). The firm is home to 173,274 agents in the United States and Canada and 14,847 agents located abroad.
Its agents, much like Compass, are equipped with various tools vis-a-vis its Keller Cloud. The cloud includes a dedicated CRM, dashboards, and more. Customers can, furthermore, interact with Keller Williams’ agents via its own consumer-facing mobile app.
Sources: Keller Williams
7. RE/MAX
Headquarters: Denver, Colorado, United States Founder(s): Dave Liniger, Gail Liniger Year Founded: 1973
RE/MAX is another brokerage franchise. The company made a name for itself by allowing partnered agents to keep 100 percent of the sales commission while they’d only pay a so-called ‘desk fee.’ While the company has reversed its course slightly (it now charges a 5 percent fee), it remains one of the world’s leading franchises.
On the backbone of that model, RE/MAX grew to become one of the world’s leading franchises. The company expanded outside of North America in the mid-1990s. It went public back in 2013, raising $220 million in the process.
In 2021, RE/MAX generated $329.7 million in revenue, which represents an increase of around 24 percent from the year prior. The franchise works together with 85,471 agents in the United States and Canada. Meanwhile, its total worldwide agent count is equal to 141,998 agents.
Sources: RE/MAX
8. Zillow
Headquarters: Seattle, Washington, United States Founder(s): Lloyd Frink, Rich Barton Year Founded: 2005
Although Zillow only employs a few agents itself and is not a brokerage, it is nevertheless the leading real estate website in the United States – by a significant margin. In 2021, it recorded 234 unique visitors in July and attracted more than 10.2 billion site visits for the whole year.
Its Premier Agent solution provides real estate agents with a suite of useful tools. For example, subscribed agents can connect live by phone with active buyers, receive dedicated reports, and get access to various client management tools, among many other features.
The platform, furthermore, derives a significant portion of its revenue from those tools. More precisely, Zillow makes money selling advertising spots to real estate agents using Premier Agent. Zillow has some additional revenue streams, which you can read about here.
Zillow’s founder, who had co-founded travel site Expedia before, allegedly stole the idea from Redfin founder David Eraker but outgrew it fairly rapidly. Its rapid growth could be explained by one little feature: the Zestimate.
Now a frequent source of joy and desperation for many (upcoming) homeowners, it provides them an estimate of a home’s value. The number is comprised of public, MLS (multiple listing services), and user-submitted data (of which Zillow has plenty).
Over the coming years, Zillow grew into the real estate powerhouse that it is today. The company went public back in July 2011 and has since scooped up competitors such as Trulia ($3.5 billion in July 2014) or Naked Apartments along the way.
Zillow, to capture an even bigger slice of the real estate pie, entered the iBuyer industry back in 2019 (with a service called Zillow Offers). After scooping up tens of thousands of homes, it had to admit defeat, though.
In November 2021, Zillow announced the shutdown of its iBuyer division while laying off 25 percent of its workforce. Nevertheless, for the time being, it did become a significant player. In 2021 alone, Zillow Offers generated close to $6 billion in revenue. Over 18,000 purchased homes had to be sold by the company as a result of the shutdown.
Zillow, regardless of its problems in the iBuyer niche, remains one of Redfin’s biggest competitors. It offers options to purchase, rent, and sell on top of home loans and the ability to directly work together with an agent. It also sells software tools to agents, which helps them increase sales.
In 2021, Zillow generated $8.1 billion in annual revenue, an increase of 144 percent. However, Offers alone caused losses of $881 million.
Sources: Crunchbase, SEC Filing, Zillow
