How Compass Makes Money

Compass is a tech-enabled real estate brokerage that claims to only hire the best agents out there. 

Its 25,000+ agents can handle everything from home purchases and sales all the way to property developments.

Its tech-first approach has enabled the firm’s founders to raise $1.5 billion in funding while taking Compass public back in 2021.

Today, Compass claims to be the leading real estate brokerage (as measured by transaction volume) in the United States.

But how does Compass, which generated $6.42 billion in revenue during 2021, make money? 

Commission

The overwhelming majority of Compass’ revenue comes from the sales commission it charges for its services.

Being tech-enabled and focusing on higher-value properties has allowed Compass to get away with charging comparatively lower fees (~ 3%).

Referral Fees

Compass also works together with borrowers who originate loans. It receives a referral fee for every loan facilitated through its platform.

Swipe up to read the full story