Having been in the real estate industry for over a decade, not just as the leader of one of Denver's highest producing real estate teams, but also as someone who was elected to represent fellow realtors on the Denver Metro Association of Realtors Board of Directors, I know the good, the bad, and the ugly of residential real estate. And one thing has always struck a nerve with me since I started doing this work:
Far too often consumers aren't getting the representation they deserve in real estate transactions.
It's something that makes absolutely no sense.
Consumers deserve someone who is not just competent--they deserve someone who is excellent. Their financial futures are depending on it. Homeownership is the #1 source of wealth for Americans. It's the most significant asset the average American owns, and real estate transactions are usually the most significant financial transactions of a person's lifetime. And yet the wealth gap between the richest and poorest Americans has gotten worse and worse—doubling between 1989 and 2016. The fact that any consumer would have to work with someone who is anything less than competent on real estate transactions should be completely unacceptable--and yet it happens every day.
Consumers need a trusted and experienced advocate to advocate for their interests in real estate transactions—someone who has proven that they have an ability to successfully advocate for their clients’ interests. Yet the laws in most states have minimal requirements to get a license. Here in Colorado, for example, you have to take a 168-hour course, pass a multiple-choice test (and just get a 70% or higher), and submit fingerprints for a criminal background check. You don’t need a college degree, you don’t need to apprentice under an experienced agent, you don’t even need to be able to prove you can write a grammatical sentence. How could that possibly be what is best for the consumer?
I would love to wave a magic wand and change the patchwork of laws in 50 different states to make it harder to get, use, and keep a real estate license, but the reality is that that isn't going to happen any time soon (trust me, I've tried). So, in the absence of passing laws forcing change on the industry, how do we, as a profession best ensure that consumers get the trusted advisor they deserve?
We need to bring together the best agents, empower them with the best technology, provide them the best support, and help those agents service as many clients as possible.
One of the most irritating aspects of real estate brokerage is that most brokerages will take anybody with a pulse and a real estate license. And while I believe in giving opportunities to people who are willing to work hard and learn an industry, because most brokerages don’t offer agents any meaningful oversight, training, technology, or support to run their businesses, consumers often suffer.
Brokerages don’t do these offer these resources to their agents for three reasons. First, state laws are usually extremely weak and don't require them to do so. Second, because it is far less risky to allow someone to join your brokerage, invest little in them, and let them go if they aren’t successful than it is to actually invest in them, provide them with world-class technology and support, and spend the time, energy, and money to help them to grow their businesses. And finally, they don’t because they can’t: to do so requires massive investment of funds, technology, and talent that most brokerages just don’t have.
Compass is prioritizing recruiting the best agents and empowering them with the best technology, services, and support. Others are focused primarily on agent headcount.
I’ve seen how many of the nation’s largest brokerages operate because, like most successful agents, I get recruiting calls regularly from them. They are eager to tell me what they have to offer. Many love to highlight their low splits. Some offer pyramid-like recruiting schemes/incentives. The primary pitch of one that reached out to me recently was that its founder and another one of its agents are on a reality TV show.
Only one brokerage, though, has recruited the most productive agents in the largest American cities and brought them together to collaborate with each other and with some of the world’s best programmers, innovators, and businesspeople to build a technology platform, support, and systems that help the best agents become even better and service even more clients. That brokerage is Compass.
Compass is the kind of brokerage America needs right now.
In a country where it is far too easy to get and keep a real estate license, America needs brokerages to voluntarily raise their own bar. Compass sets minimum production levels and requires recommendations from other agents in order for agents to join. I am surrounded by top-producers who motivate me to be better, and I can lean on them for support as needed.
At a time when technology is changing everything at warp speed, America needs a brokerage that invests in technology and harnesses it to improve the real estate experience from contract to close. Compass has invested hundreds of millions of dollars into building the first complete end-to-end technology platform an agent can use to run all of the major aspects of their business. As someone who uses it every day I know that it is a game-changer for helping agents like me be more effective at servicing our clients’ needs, while freeing up more time for us to help more people. That’s a win for agents and a win for consumers.
And at a time when tearing each other down is often celebrated, America needs positivity, passion, progress, and leadership. Two of the Compass Entrepreneurship Principles that I see embodied most at Compass are “Dream Big” and “Collaborate Without Ego.” Compass’ leadership, employees, and agents are positive, solutions-oriented, and focused on progress. Compass celebrates diversity and inclusivity--and happens to be the first company ever to make the Fortune 500 list with a Black founder. That founder, Robert Reffkin, didn’t make the Fortune 500 List by chance—he’s a skilled leader who is willing to make the difficult business decisions necessary in this challenging environment to weather the economic storm.
Is Compass perfect? Of course not. Are there other brokerages out there that are doing great work? Absolutely.
Compass, though, is leading the real estate industry. Not just as the #1 producing brokerage in America, but rather by its example. Compass is showing the industry that by recruiting the best real estate agents and empowering them with the best technology, services, and support, agents and consumers can truly get the experience that they deserve. I hope that more brokerages follow its lead.
David Schlichter leads the award-winning Schlichter Team at Compass in Denver, Colorado and recently completed a two-year term representing Denver area Realtors on the Denver Metro Association of Realtors Board of Directors. He can be found on Instagram @thegoodlifedenver and his team can be found at @schlichterteam.