How Compass Makes Money
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Compass is a tech-enabled real estate brokerage that claims to only hire the best agents out there.
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Its 25,000+ agents can handle everything from home purchases and sales all the way to property developments.
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Its tech-first approach has enabled the firm’s founders to raise $1.5 billion in funding while taking Compass public back in 2021.
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Today, Compass claims to be the leading real estate brokerage (as measured by transaction volume) in the United States.
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But how does Compass, which generated $6.42 billion in revenue during 2021, make money?
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Commission
The overwhelming majority of Compass’ revenue comes from the sales commission it charges for its services.
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Being tech-enabled and focusing on higher-value properties has allowed Compass to get away with charging comparatively lower fees (~ 3%).
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Referral Fees
Compass also works together with borrowers who originate loans. It receives a referral fee for every loan facilitated through its platform.
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