Rory Golod on why Compass is taking a stand against Zillow

HousingWire

Today on RealTrending, Tracey Velt sits down with Rory Golod, President of Growth and Communications at Compass, to discuss their lawsuit against Zillow and what Compass is doing to reshape the agent and consumer experience in real estate.   Rory unpacks the motivations behind the lawsuit and also shares Compass’s three-pronged marketing strategy. He also talks about how agent feedback drives tech development across platforms like Compass One and their other AI integrations.   Here’s a glimpse of what you’ll learn:   Why Compass is taking a stand against Zillow’s marketing policies   How pre-marketing creates demand and higher sale prices   Compass’s agent-first tech development model   Why consumer value is the key to brokerage profitability   How AI is accelerating innovation and agent efficiency   The secret to high agent adoption of brokerage tools   Related to this episode:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠   ⁠Rory Golod | LinkedIn⁠  https://www.linkedin.com/in/rory-golod-29b47413/   ⁠Compass Real Estate⁠  https://www.compass.com/   ⁠Brooklee Han on the Compass lawsuit against Zillow | HousingWire⁠  https://www.housingwire.com/podcast/brooklee-han-on-the-compass-lawsuit-against-zillow-over-private-listings/   ⁠The juiciest details in Compass's lawsuit against Zillow | HousingWire⁠  https://www.housingwire.com/articles/the-juiciest-details-in-compasss-lawsuit-against-zillow/   ⁠⁠⁠⁠⁠HousingWire | YouTube ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠  https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q   ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠More info about HousingWire⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠  https://lnk.bio/housingwire   The RealTrending podcast features conversations with the brightest minds in real estate. Every Monday, brokerage leaders, top agents, team leaders, and industry experts join us to share their secrets to success, trends, and the lessons they’ve learned. Hosted by Tracey Velt and produced by the HousingWire Content Studio.

Transcript

00:00There's been an ongoing conversation between Compass and Zillow over clear cooperation and

00:06some of the marketing of listings. And today I spoke with Rory Gallaud. He is the president

00:12of growth and communications for Compass. And he went into all of that, the lawsuit,

00:18their three-pronged marketing, and also some of the new tech that Compass is developing for

00:23its agents and consumers. So enjoy the podcast. Welcome to the Real Trending Podcast, Rory.

00:30Thanks for being here. Thank you for having me. Yeah. So we are talking on the day that breaking

00:37news came out that Compass is suing Zillow over their private listings policy. So let's just start

00:44with that. Tell me a little bit about that and what you hope to accomplish with it. Yeah. Well,

00:50I think first thing, most important is to clarify, this is nothing to do with private listings. What

00:56this is about is the public marketing of listings that are not on Zillow. Effectively, what it says

01:05is that Zillow is saying, if there is a listing that is not on Zillow, then we are banning that

01:11listing. And so what Compass is fighting for is Compass is fighting for the ability for homeowners

01:16to have the choice to be able to market homes however they see fit. And if they want to publicly

01:22market a listing in any other way, if they want to put it on Instagram, if they want to put it in an

01:28email newsletter, if they want to put it on a different website, if they want to put it on the

01:33internet, they should be able to do that. And they should not be subject to rules from a company that

01:41are anti-competitive, monopolistic, and quite frankly, a company that's not party to the transaction

01:46and has no business trying to step into the transaction. Ultimately, this lawsuit is about

01:53protecting consumer choice. No one company should have the power to ban agents, listings, simply because

02:01they don't follow that company's business model. That's not competition. That's coercion. Imagine if

02:09any company tried to do something like this. Imagine if Amazon said, hey, we're going to ban a seller

02:13for offering a product on their website first, right? That's what Zillow's doing in real estate.

02:19And so ultimately, we believe consumers should have the right to choose how they sell homes.

02:24Compass does not have policies and rules around listings. We don't ban people from choosing to work

02:32with someone else. We don't find them. We don't do that. We don't believe that Zillow should be doing

02:37that. It ultimately should be up to the consumer. Yeah. And I know Robert has been very vocal on

02:42social media. I see it every day. But also, I want to talk about your three-pronged marketing plan

02:49because I understand it. And the argument I think that people have or the criticism is that, well,

02:57sellers don't know what they're getting into. So I want you to have the ability to answer that question

03:02and really clarify with people what it actually is. You know, maybe we can hold off some of the

03:13criticism. Yeah. Well, I appreciate that. Yeah. I've heard a lot of the criticism. It's all very

03:19head-scratching, right? For someone who's contending that sellers don't know what they're getting into,

03:24it makes it sound like sellers are uninformed or sellers are unintelligent. And I think that's unfair

03:30to say that. Who are those companies to say that they know better than the owner of the home? The

03:36owner of the home was able to buy the home. They are able to sell the home. And they should be able

03:41to make the decision to sell it however they want. The Compass three-phase marketing strategy is very

03:45simple. It harnesses the power of pre-marketing to build interest and anticipation to help create a

03:51better outcome for the client. Ultimately, a higher price, sell the home faster with less hassle.

03:57It is no different than what every industry does when it comes to marketing highly valuable or luxury

04:04products, goods, and services, right? Hollywood, when they put out movies, don't just put them out.

04:09They use trailers. They build up marketing campaigns to get interest and anticipation.

04:14High-end fashion companies don't just release collections. They have runway shows. They trickle

04:18out products. They send some products to some stores, some products to other stores, and they release

04:23their collection, right? Tesla sold tens of thousands of Cybertrucks before they even had

04:29one built. And ultimately, the best example of all of this is our own industry, right? Home builders and

04:37developers have been pre-marketing homes for decades. They've been selling homes off of floor plans for

04:43decades. And so all we're doing is taking the exact structure that developers and home builders have

04:51used in our industry for decades. They sell hundreds of thousands of homes every year. NAR, the MLSs have

04:57all said they can continue to do this. And all we're trying to do is give agents, individual homeowners,

05:03the power of a mega developer. And it's quite simple when you think of it that way. And the stats bear

05:11the actual results. They tell the full story. So what do the stats say? One, first one, 94%

05:19of listings that entered the Compass three-phase marketing strategy that started as a private

05:24exclusive ended up on the market. So this is not about double-ending deals. This is not about

05:29withholding inventory. I know that most of the people that say that it's about that know that it's not

05:34about that, but they're contending anyway. And it's not. We know it's not because one, 94% of those

05:40listings end up on the market. Of those 6% that don't, agents at other firms were in the majority

05:47of those deals. So that means the majority of those 6% are being co-brooked with agents at other

05:51companies. And to further prove the point, we put out this book, this listing book that we put into

05:58every one of our offices for the sole purpose of just allowing agents at other firms access to the

06:04listings. Now we had to do a book because that's what NAR's rules say. The NAR, the MLSs,

06:10and Zillow, their rules say you can't publicly market these things. You can't share them one

06:14to many. So fine. If your rules say we can only do it in a book, we'll do it in a book.

06:19Number two, we saw that homes that went through the Compass three-phase marketing strategy sold for

06:26approximately 2.9% more than those that didn't and sold faster with fewer days on market. So homes are

06:32getting a better financial outcome and selling faster. So ultimately, the numbers don't lie. The

06:39numbers tell the full story. And the full story here is that this is an effective strategy for a

06:43lot of people, but ultimately, it's their choice. If someone doesn't want to use this strategy,

06:47they don't have to.

06:48Do you find a certain property lends itself better, like a luxury property to this strategy? And I want

06:55to clarify, for anyone listening, it's not mandatory that agents have their sellers on this

07:02three-phase marketing plan, correct? That it's really consumer choice.

07:08It is fully elective. It is their choice 100%, which ultimately tells the full story. Because

07:15the fact that close to 50%, we on our last earnings call said close to 50% of our listings chose to

07:22leverage the Compass three-phase marketing strategy. That means tens of thousands of sellers have chosen to

07:29do this. It's not mandatory. It's their choice. We are agnostic to their choice. It's ultimately up

07:35to them. If they think it's best for them, they will do it. Some people decide it's not best for

07:39them, and others do. To answer your question on the type of property, it really is quite universal.

07:46We've seen properties successfully leverage three-phase marketing strategy that are incredibly expensive,

07:51that are very high value or marquee homes. But I can give you dozens and dozens, in fact,

07:58hundreds of examples of people who were selling properties that were probably a lot closer to the

08:03median price of a home in the United States who leveraged the strategy and was successful for.

08:08So it really is universal in the impact. And that's why you see so many people choosing to do it.

08:15Great. So I want to talk a little bit about the brokerage in general. And you've always been a

08:21tech-focused, like agent-centric brokerage. How are you evolving that value proposition to stay

08:29competitive? And has your strategy changed at all?

08:34I think our strategy is actually quite consistent, right? As you mentioned,

08:39from the founding of the company, wow, we're coming up on 15 years pretty soon. But from the

08:45founding of the company to where we are today, the entire focus has always been working backwards

08:49from agents. Agents are our client. The way we obsess over our agents as a client is how

08:56our agents obsess over their clients, their buyers and their sellers. And we work backwards from them.

09:01So everything that they need, we create. Every great idea we've ever had, every successful product,

09:07concept, initiative, all of it has come from agents. And even now, well over a decade into the history

09:13of the company, every single thing we do today still comes from our agents. Our agents vote on

09:18the technology they want us to build. They give us feedback on the initiatives we're doing. The

09:22entire compass three-phase marketing strategy has literally been crafted by agents. The words,

09:28the content, the strategy, how it's articulated, the concept itself. We did not invent it. This has

09:35existed for a long time in our industry. So I like to think of us as the most agent-centric company.

09:41We work for our agents, not the other way around. Every single thing we do is to help them. And if

09:46we are not helping them grow their business, save time and be more successful, then we have no reason

09:51to exist. And what has been the underpinning of our ability to create value for them, to deliver value

09:57throughout our history has been technology. Technology gives all of us superpowers to do things far

10:04faster than we could manually, to connect with people at far greater scale, and to remove a lot

10:11of the menial non-core administrative tasks that burden us. And so for the whole entire history of

10:16the company, we looked at the business and said, how can we build technology that can help agents solve

10:22problems that, candidly, our industry was not and is currently still not building? So that hasn't

10:29changed. Everything works backwards from that, as I said. So if you think about the Compass three-phase

10:34marketing strategy, that's a strategy to help agents grow their business, be more successful,

10:38create better outcomes for clients. Technology, events. You think about the Compass National Referral

10:44Network. 17% of the transactions we did last year were Compass-to-Compass agents, referring deals to

10:51each other, the highest in the industry. All of these things, Compass concierge, all of it works

10:56backwards from agents. And so that actually hasn't changed. Maybe the only thing that's changed is now

11:01the pace at which we can do this. Because now technology, what used to take you a year to build,

11:06you can build in a lot less time. And obviously AI, which I'm sure we'll talk about, is a real

11:11accelerant there. Yeah. And do you feel like there's, you know, obviously your focus is on the agents,

11:18but with the settlements and kind of things going on in the industry right now, I feel like brokers have to

11:24think more about consumers as well. Or, you know, do you find that is more of a conversation now than

11:33it used to be? For sure. And we started to see that happening actually a few years ago before

11:40lawsuits and things like that. A couple of years ago, we actually had one of our all company meetings

11:47at one of our annual retreats announced this idea of what became Compass One, which is the dashboard

11:53that our agents give to their buyers and sellers when they're working with them on a transaction.

11:58It's the only dashboard of its kind that exists in our industry, which is kind of crazy when you think

12:03about it, right? We're in a business where people come to us and they ask us to help them buy a home

12:10or sell a home, spend hundreds of thousands to millions to tens of millions of dollars on these

12:16homes, either when they're buying it or obviously getting that when they sell it.

12:20And we as an industry just gave them an email with a PDF to sign and that was it.

12:28And so and that runs very counter to how it works in a lot of other advisory businesses. When you work

12:33with a private wealth manager, you get a tremendous amount of technology, tools and resources, dashboards

12:38and things like that, because that's what your expectation is if you're going to give them a lot of

12:42money and be in charge of this important aspect of your life. No different for our business. And so

12:47the thing about Compass One, we built Compass One to be an interactive dashboard where an agent can go to

12:54their buyer and seller and give them technology that they can work with them on. They don't need

12:58to use other tools. They can use one tool, one log and one system to follow along and engage on the

13:04entire transaction. It's where all their documents live, all the timelines, checklists, tasks, the things

13:09that the client's responsible for, the things that the agent is responsible for, all the updates

13:13automatically flowing in there. So the client has the peace of mind to know what their agent is doing,

13:17all the content they've created, if they've done tours, if they've created a collection,

13:22if there's a CMA in there, all of that in one place. We started working on that a while ago,

13:28because we started to see agents come to us and say, I need more tools I can use with my client.

13:33If you think about the first call a decade of Compass, it was really building tools to help

13:38the agent and their workflow. But consumers don't really care about that. And what I mean is no

13:45client is going to their agent saying, wow, I'm so happy you have a great CRM. That makes me really,

13:51I'm really happy that that piece of marketing collateral that you put on Instagram about my

13:55home, you were able to create in Compass's marketing center in 10 seconds. That doesn't benefit

13:59them. So we started to see a shift to where now we're building more and more software where agents

14:06use with consumers. And I think the outcome of that, that we're starting to see in the early days

14:12is two things. One, when consumers can see and touch and feel technology and tools, they can

14:21actually ascribe more value to it. Part of the problem I think that a lot of really successful

14:26agents have is that they're too good at what they do. And so clients almost think that what we do is

14:31easy. And when people think things are easy, they're less likely to want to pay for them.

14:36But actually, in fact, transactions are not easy. They're really complicated. They're hard. There

14:40are hundreds and hundreds of steps that go into them. And so if you can give a client a window into

14:47that and they can see the actual work that you're doing, it will make it a lot more clear to them

14:52how much value you're creating. And just in many cases, just the sheer amount of work that's being

14:57done. The second thing that it's doing is it's allowing agents to now engage with clients and create

15:02a better experience for longer. Just because a transaction ends doesn't mean that the interaction

15:07with the client has to end. In fact, that interaction should be in perpetuity, right?

15:12No different than an attorney, an accountant, a wealth manager who worked with clients for many

15:17decades. And so these tools are now giving them the ability to stay in touch with their clients and

15:21engage with them, even if they're not in the middle of the transaction. And I think that's where

15:25we're going to continue to go, which is more and more tools that agents and clients use to work

15:31together on. Well, it makes sense. I mean, everyone buying a home, selling a home wants to know where

15:37they are in the transaction, what's going on. They want that communication. And if you offer a way

15:43for them to get it on demand, I mean, you've just performed a miracle, basically.

15:49Yeah, exactly. And look, I was talking to a friend of mine who's not in our industry. They're showing

15:55Compass One to them. And they almost said, it's kind of surprising that this doesn't exist. I'm

16:02like, I know it is surprising. And they said, I would have expected that something like this would

16:07have existed because this looks incredible. And sort of to your miracle point, it's kind of wild that

16:14that is what's considered a miracle. When in fact, in a number of other industries, that's just

16:19considered good client service and client support. And so we're really excited about continuing to

16:25build upon that. It started with collections. It evolved to Compass One, and then we'll continue

16:31to evolve. And I want to jump on the AI conversation. Do you think it's a bunch of hype? And if not,

16:38how are you kind of incorporating that into your technology platform moving forward?

16:43So I don't think it's a bunch of hype when it comes to AI as a technology and the impact it'll have

16:51on businesses, transaction-based businesses, every business, every aspect of our life. That is not

16:58hype at all. What is hype, though, is what I'm seeing in our industry, which is all sorts of hype

17:05around AI is going to do this for you, and it's doing that for you. And all sorts of third-party

17:10companies that are trying to use AI in the transaction, none of which is particularly

17:16clear on how it's actually going to help an agent and a client. The business application of it has

17:23not been made clear, because I don't think anyone really knows what that is. What we have focused on

17:29is how do you actually use this technology to create practical outcomes for agents and their clients

17:35that are tangible, that are real, that are not just hype. And that's not going on to ChatGPT

17:42and asking it to write something. That's table stakes, right? We're at a point now where almost

17:48not having that as a problem. What we're looking at is how do you actually use AI to do real things

17:55for agents that will help them? So what are those examples? Well, one, save time, right? Transactions

18:00have multiple steps, multiple parts of the process, all sorts of documents, things like that. You can

18:04use AI to streamline all of that so that an agent can go from spending X number of hours per transaction

18:12that, let's call it 50 hours, down to five. And with that excess time, they can use that to actually

18:18spend more time with the client. You can use AI to help them do more deals, to find more clients to work

18:24with. You can help that they can use AI to stay in touch with more clients and in an authentic,

18:29real way, not just in a, oh, here's a reminder, call someone on their birthday. Again, that's table

18:34stake. And you can also use it to glean insights. Now, what you need for AI to be successful in a

18:43real estate, residential real estate context is you need three things. One, you need a tremendous amount

18:48of data. You need enough data to power. Data is the fuel for AI applications. Luckily for us,

18:56for well over a decade, the Compass platform has gathered billions upon billions of data points

19:03of all of these agents who've been using it, interacting with listings, closing transactions,

19:09interacting with clients. So there's so much unique rich data. No brokerage has a platform,

19:15so therefore they can't actually collect data. And if you're just using data from the world,

19:20then it's not differentiated. The second thing you need is you need the engineering talent,

19:26right? You need the individuals who can build these tools. We're really lucky that we have a team of

19:31well over 500 of the best software engineers in the country who can then take that data, build AI

19:37applications on top of it, and then deliver those products to agents. And then three, you need everything

19:45integrated on a platform. AI can't make you more efficient if the efficiency isn't there. Meaning

19:52if you have 15 logins to do your job, AI can't go between 15 different systems, 15 different companies

19:59effectively and connect everything. But if it's all on one platform, it can do that. And that's what you

20:06saw in the demo that Robert did at our Compass all-agent meeting at the last retreat in Denver,

20:13is AI effectively taking a client through the whole life cycle because all those tools are already in

20:20the platform. Yeah, I think it's just very confusing to agents right now what they can do with it other

20:27than write a marketing description or a listing description. And they're exploring it. But there

20:34are so many options out there, so many products offering some sort of AI technology that you don't

20:42even know what is what at this point. Well, I think in many ways, it's actually the same problem they had

20:5110 years ago. It's being perpetuated. The problem 10 years ago was that, and this still is a problem

20:57for traditional brokerages, or actually all brokerages outside of Compass, is that the average

21:04agent needs to log into 15 to 20 systems a day to do their job. If they're even using technology,

21:09there are a lot of really good agents who are like, this is just too much work too hard, I'm just going to

21:14not even use it. And obviously, they would probably choose not to do that, but they're almost forced

21:19to. If you have to log into 15 to 20 systems to do your job, you're never going to have ease,

21:25simplicity, insights. You're never going to find that technology is effective. Now you take AI and

21:31you add it on top of that. It just makes what was already massively disintegrated and complicated

21:36that much more complicated. And so if I'm an agent, I'm probably saying, well, what AI tools do I need?

21:42Should I use this? Should I use that? Which is the right tool? Oh, you know what? I can't really use

21:46that tool because it doesn't really talk to my email. I need to be integrated in my email.

21:49Oh, but it doesn't integrate to the listings because that third-party technology company

21:54doesn't have real estate listing data because they're not a brokerage. It's so complex. And

21:59ultimately, what a lot of agents have said to us is they said, we just want to be able to do our job.

22:05We're not using technology for technology's sake. We want to just be able to do our job better. If

22:10technology happens to do that, great. Build it, give it to us. Here are the things we needed to do.

22:15And that's what we've been focused on. And do you have, I mean, you can't really

22:20require independent contractors to use your platform, but is there some sort of,

22:27I don't know, incentive training, whatever you do to get such a high rate of users?

22:35Yeah, we spend a lot of time and energy and effort helping agents take advantage of the tools we have,

22:44because you're absolutely right. What you see a lot in our industry is one, most companies will buy

22:52third-party technology, throw their logo on it and just give it to their agents. And that always fails

22:59because those tools are not integrated. They don't perform at the level agents need. And there's

23:05no one sitting there to really show them how to use it. And there's no one there troubleshooting to

23:09say, hey, it does this, but if it could do that, it would be a lot better, right? It's just, here it is,

23:15figure it out. And then I've seen a few companies who have sort of kind of built technology,

23:23but there's, it's not really as expansive as an agent needs. And there isn't enough in terms of

23:29actual training, coaching guidance on how to use it. And therefore you find that some of those tools

23:34they've built, they demo really well. They look good when you see them, but they don't actually

23:38work in practice and it's hard to apply it to your business. And agents are busy. They don't want to

23:43sit down and spend hours learning how to use technology. Nobody does. And so what we've found over the

23:49last number of years is that we've been able to help agents leverage our tools by doing a couple

23:54of things. First is everything we build, we build, as I said, based on their feedback. So we're already

24:00going into it, knowing that the things we're building are what they want down to the most

24:05nitty gritty details, you know, down to the placement of a button, to the color, to the wording,

24:10to the language. So we know that we're giving agents something that their colleagues have said,

24:15this is what we need. Then secondly, we have a really big team of people here whose job is to

24:21onboard and teach agents how to use our technology. So we have a team encompassed called the agent

24:25experience team. And there's hundreds of agent experience managers around the country. They are

24:29best in the world at sitting with agents, learning about their business. They know how the tools work

24:34top to bottom so they can sit with them in person, right? Because we're an in-person company,

24:39in person in their office and show them, here's how you can use the CRM to do this.

24:44Here's how you can use collections to share listings with your buyers like that. Here's

24:48how you can use marketing center to market your listings and physically show them. And then on

24:54top of that, we have an entire coaching team. And our coaching team, led by my colleague, Ashley

25:00Donay and my other colleague, Courtney Smith, what Courtney and Ashley do is they go a step further

25:06and they say, okay, now that you know how to use the tools, here's how you really optimize

25:10your business around it. Here are the real sort of advanced level things that you can do.

25:15And that's constantly evolving because tools get updated, things get built, things get consolidated.

25:21And so that needs to be happening over and over and over again. And so it's a lot of work,

25:26but if you want people to use the things you built, you need to do that.

25:30Yeah. I mean, I think that's a lot of brokers really struggle with adoption, you know, just

25:36getting agents to adopt their tech. And, um, it's, it's hard to build those teams and, you know,

25:42consistently be able to, to train and, and do all that. Um, especially when they're not the scale,

25:50obviously of a compass or, or some of the other larger companies.

25:53I, I, and I, that's why I, I recognize how much work it is. And so it is hard. It's not,

26:01I'm in no way saying, oh, it's easy. And we've been, we've been trying to do it for

26:05well over a decade. It's not easy. And, and we're fortunate that we've been able to build,

26:11I think the best technology that's ever existed for our industry. And we, we still need to make

26:15sure we provide all that. The one thing though, AI, I believe will do is it should make adoption

26:21even easier, because if you don't, if you think about the demo that Robert showed,

26:26right, if you can just pick up your phone and tell the compass platform to do something,

26:31yeah, you don't necessarily need to learn how to do it. You don't need to be an expert in it,

26:36but you, you know, the destination you want to get to, and it can just do it for you. I think what

26:41you'll see is adoption will, will grow even more. It's already incredibly high for us. So it's,

26:48there's a very, very small gap there of people that we would capture. But I think you will see

26:54some of those people who might be intimidated by technology, feel like they don't need it,

26:58are going to be able to, to really take advantage of it because you won't need to sit down and learn

27:02how to use it in the same way. Yeah. You'll be able to just dictate and tell. I mean, I've already

27:08seen that happening personally, you know, just being able to build a spreadsheet that I have

27:13no idea how to do. And I ask AI to do it for me. It's me, the lifesaver of spreadsheets has been AI,

27:23because it's like normally I, so I used to, what I would do, I'd either ask someone a compass who

27:30was really good with Excel or Google sheets, you know, particularly Google sheets. Cause we run on

27:36Google. And then if it was something I really felt like I wanted to figure out, I'd go on YouTube

27:41because YouTube actually has everything when it comes to formulas. And so I'd go on YouTube,

27:46I'd look it up because I was, I wanted to feel like I could do it. Like I knew how to create this

27:51complicated formula, even though no one cared. And I'd spend an hour messing around with it and

27:56I'd still get it wrong. And now I can just be like, Hey, Gemini create this table for me with

28:02these formulas. I want it to, this is the output. And I feel like I'm a whiz. So that's like the

28:09that it creates. It's great. I used to ask my son to do it all for me and now I could do it myself.

28:13So he's, he's happy. My, my cheapest staff asked his dad to help him. And I was like,

28:18hold on, hold on. We, we, we can't, we got to do this. We gotta, we can't share this outside.

28:24Yeah. Um, I, we only have a couple minutes left, so I want to just kind of go through some, um,

28:29quick, quick, uh, questions. So what is, what do you think is the biggest threat to brokerage

28:34profitability in the next 12 months? Well, look, the, the market, I mean, right rates,

28:41uh, you'll see what goes on with the geopolitical environment right now. Although you would think that if

28:46there's, you know, uh, more of an escalation of what's going on with Iran, that it should drive

28:52rates down actually, but things have been so upside down for a long time. So you just have the,

28:58the macroeconomic picture, right? If you, if you have any type of thing where rates elevate, um, or

29:04any type of real disruption of the equities market that could scare people that, that will have a real

29:10drag on profitability. So I think next 12 months, it's, it's going to be the market beyond that.

29:16I actually think not creating for a long time, we believed it was not creating value for agents.

29:24And if, if you were a brokerage and you weren't creating enough value for agents, agents would,

29:28would leave. Um, I think most people that's proven to be true that if firms are not creating enough

29:34value for agents, that agents are leaving and going to other companies. And we've seen that

29:38we've been the beneficiaries of that. Now I actually think it's going to shift a little to

29:42where it's going to be, as you said, more about the consumer. If consumers feel like they're not

29:47getting value from their agent, then there's going to be more pressure from consumers on agents.

29:53And we're already seeing that. You saw it with lawsuits, you're seeing with what's going on with

29:58listings and listing policies that are being created. And so I think firms need to be really

30:05thoughtful about what are you doing to give an agent real tangible tools, programs value,

30:14not things that they can just pitch and sell real things that create actual outcomes.

30:20They can go to their clients and say, these are the things I can give you to help you either

30:24sell your home or buy a home. And it's differentiated compared to others. And then clients will see that

30:31value, feel it, and be willing to pay for it. Yeah, absolutely.

30:36I mean, it's pretty basic. That's any business has to be able to do that. And if you don't,

30:43consumers will either go somewhere else or there'll be a new entrant that comes in that is able to do

30:48that. And that's what I think a lot of brokerages right now are struggling with.

30:51Yeah. There's always a new entrant. I mean, it was you. It was Keller Williams, you know,

30:57previous. So yeah, it just is constant evolution in real estate. All right. So my last question is,

31:06the most exciting Compass innovation that agents haven't fully taken advantage of yet?

31:11Well, look, it would be the AI, Compass AI that we demoed about two weeks ago. Now they

31:19haven't been able to take advantage of it because we haven't released it yet. But that's far and away

31:24has to be it. Because, you know, as I said, we built over the last decade this amazing platform,

31:31the only one of its kind, where an agent can go from the day they meet a client all the way till

31:37closing, funds being transferred, and everything in between in one place, easy to use, consolidated,

31:44simple, integrated. And to think about now, that all being effectively automated,

31:51and now with AI, you can just pick up your phone, tell it what to do while you're thinking about the

31:57example of driving in your car, you just finished in with a buyer, you're going to another appointment,

32:03traditionally, you'd have to get back in front of your computer, maybe call your assistant.

32:06Now you can literally be in the car and just talk to your phone and tell it what to do

32:10is pretty remarkable. And then you add on top of it the things that we haven't fully released yet

32:17that we're working on. Being able to go to Compass AI and say, give me insights that I never would have

32:26been able to glean any other way, I think will be the game changer. So I'll give you an example. I use

32:31this example often because it's, it's so powerful and pretty straightforward. I'm an agent, I work with

32:38you as a buyer, you buy a home with me, we buy today. So your mortgage rate is called 6.8%.

32:44And I set you up on Compass One, you know, your dashboard. And we don't talk every day because

32:51the transaction is completed. And let's say we did the deal two years ago. So it's been two years.

32:56But throughout those two years, via Compass One, Compass AI has encouraged me to reach out and share

33:02certain things. Hey, your neighbor's home just sold for this. Hey, I don't know if you saw that,

33:07different updates and insights. So we're nurturing the relationship. And I'm actually giving you value,

33:12not just checking in and see how you're doing. Which is valuable too, but you want it to be more

33:17tangible. And one day you wake up in the morning, it's early, you wake up and you look at your phone,

33:24and Compass AI has said, Hey, Tracy, this morning, I pulled together, Rory, your former client,

33:34he bought with you two years ago, he his mortgage rate was 6.8%. Well, today, his rate if he were to

33:42refinance would be 5%. And based on his mortgage and everything he will save if he refinances,

33:48let's call it $4,000 a month. And so I went ahead and I wrote a short email to Rory, I put in a graph

33:56that shows the declining mortgage rate, and the amount of money he would save with with the refinance.

34:01And I just put in there, I CC the loan officer from origin point our mortgage company and put his

34:07contact info in there. Oh, and I also had an email go to him to let him know I'd be sending this.

34:11And I'm gonna send it to the client. And you're sitting there on your phone, you look at it,

34:14you're like, yeah, that looks good, send. Then the client who hasn't really engaged with you in a

34:18long time gets that email, the client wakes up, they're not thinking of you necessarily. And all

34:23of a sudden, they read this email. And they're like, Oh, my God, this is amazing. My agent woke

34:27up this morning was thinking to me at 7am, I could refinance right now, say $4,000 a month,

34:32they already set up the conversation with the loan officer. Oh, and by the way, because it's all through

34:38a platform, they have all my information, they have all my loan docs from the first time. So I won't have

34:44to start from scratch. In fact, because the AI, this will take the paperwork from here to here.

34:50Yeah, that client that consumer is going to think you're a magician. Yeah. And they're also going to

34:56be like, Wow, I can't believe they were thinking about me, even though you weren't. That's one of 100

35:00examples I could give you which will make it so that agents one never lose a client have clients for life

35:06to clients feel so much value from their agent that transcends just the transaction. And ultimately,

35:13I think that means agents economically will do better, but also just optically will be seen

35:19as more advanced and more special advisors than just people who just do deals. So that's that's

35:26what I think people will have the ability to take advantage of that will be truly differentiated.

35:30Well, let's hope that they can start sending those lower rate emails soon.

35:35So I you know, I've been using an example for quite some time. It's like a year ago, you know,

35:40okay, so your rates at 7.2. And in a year, it's going to be 575. And it's like, okay, I,

35:47I have to keep adjusting this out. Fingers crossed we get to that point.

35:53Well, Rory, thanks so much for joining the podcast. We really appreciate having you on.

35:57Thank you for having me on. And I hope to see you soon.

36:13Yeah.

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