Experts analyze the growth strategy of Kompas, Exp -Realty

When evaluating five-year-old movers (2021-2025), Exp Realty leads in volume growth, with $ 80.46 billion for a total of $ 152.66 billion. Compass followed closely with an increase of $ 79.04 billion, a total of $ 231.04 billion.

In the past five years, in terms of transactions, Exp Realty saw the most important increase, with 111,138 parties to reach a total of 350,119. Compass followed with an increase of 84.001 sides, a total of 228,785.

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“The top 10 movers per volume in the past five years divided into two camps,” Murray explained. “Half are flat or cheap, organic growth players such as EXP, United” Fiddle” SamsonAnd Location. The other half – compass, Hanna HoldingsAnd Sotheby’s – have mainly grown due to acquisitions. Then there are the Uitbijters like Jason Mitchell Group And Mark Spainthat depend on volume-heavy, lead generation tactics. They are main hen samples. It’s smart, and they are very good at it. “

Two roads divergen and meet again

At the surface level, the rise of Exp -Realty and Compass represents a fork in the way for brokerage models.

EXP has grown rapidly by a decentralized, low-overhead model powered by virtual offices and recruited recruitment by Agent. Compass has leaned heavily on a centralized strategy of mergers and acquisitions, the acquisition of brokers and the signing of top agents for lucrative contracts.

“Exp is very similar to the Keller Williams Model, “said McClelland.” They created the downline to create a profit share and refined that. It is a different model of winning part, but they share income and they have virtual offices, so they have crushed (operational costs) costs. “

Murray also quoted parallels between Exp and Keller Williams.

“They simulated Keller Williams with the cap, but added income and stock stimuli,” he said. “They had no offices who kept their overhead low. The big bending point came when they hired five or six former regional regional Keller – people who really knew how to build recruitment systems.”

That strategy worked – fast.

“(EXP) has just started,” said Murray. “Although their American growth has been delayed in recent years, it was enough to place them among the top movers on volume.”

In the meantime, Compass has received a more aggressive approach to recruitment, aimed at top producers with prior stimuli and multi -year agreements.

“They took the M&A model that was used in industry for many years and refined it for agent’s acquisition,” said McClelland. “It is a consideration; I will give you an income tax in advance, you stay with me.”

Remarkable acquisitions for Compass In the past year include Christie’s international real estate And @featuresluxury real estate company Washington Fine Propertiesand Gulf Coast-based brokerage LATER & BLUM.

Compass has also been the subject of rumors with regard to the possible acquisition of Berkshire Hathaway HomeServicesBut has not offered clarification about this.

In Q4, Compass reported a revenue increase of 26% on an annual basis, with $ 1.4 billion, along with an increase in transactions by 24%. For the entire year 2024, Compass achieved $ 5.6 billion in income and generated $ 122 million in operational cash flow.

Exp Realty reported $ 4.6 billion in sales for the entire 2024, an increase of 7% compared to the previous year, by $ 1.1 billion generated in Q4. The company closed $ 185.2 billion in transaction volume for the year, which marked an annual increase of 9%.

Despite any business model differences, both Kompas and EXs are carried out at a similar starting point, whereby agents are paid from the best turnover to feed the rapid expansion, McClelland said.

“EXP pays a piece of top-line income to bring in a different agent. Compass pays a piece of top-line income to generate your production,” he said. “They are best on each other.”

Shifting

McClelland acknowledged that the industrial landscape is rapidly shifting – especially in the aftermath of the National Association of Realtors’ Committee on the Regulations.

He sees large implications for business models that depend on large numbers of lower -producing agents.

“Many new and hobbyist agents do not have the negotiation skills to articulate the value of their committees,” said McClelland. “They step away from the company. When that happens, companies based on volume [may] have problems. “

The committee’s ruling could shake the basis of the buy-side-heavy “cap” model, he added.

“The great shift is not only that buyer broker agreements are signed,” said McClelland. “It is that listing agents no longer have a reason to protect the buyer-brokerage committee for the buyer’s agent. That is a seismic change.”

Murray agreed that the industry is confronted with a moment of settlement.

He points to historic parallels, such as Century 21s Explosive rise in the 1980s, followed by a fall after a series of changes in company property.

“They dominated by franchising, which was a new model at the time,” said Murray. “But when they sold to a conglomerate, then to Metlife, it all started to slide.”

He sees similar risks for today’s companies that use a version of the EXP model – such as United of Fathom.

“They offer fixed costs, income share. It is now competitive,” said Murray. “The Edge EXP had disappeared.”

Back to basics

In a market full of complexity, Murray and McClelland corresponded to a simple approach; Relationships, reputation and a real understanding of what agents need.

“Glenn (Sanford, CEO of Exp) was brilliant,” said McClelland. “He built a better Keller Williams. And compass, they have also done a number of brilliant things. Both models have validity.”

But long -term survival, they claim, will depend less on disruption and more discipline.

“More of the noise will be lost,” said McClelland. “We go back on what works. Real support. Real relationships. Real production.”

Murray actually summarized it; “The names can change, the technology can change. But in the end it’s still about people.”