Robert Reffkin is the Founder & CEO of Compass and before starting the company, he worked at Goldman Sachs as Chief of Staff to the President & COO following five years working in the firm’s private equity arm. Prior to Goldman Sachs, he worked at Lazard and McKinsey & Company. In 2005, he was appointed as a White House Fellow to serve as special assistant to the Secretary of the Treasury.
It’s not all business with Reffkin, however. He founded the most time-intensive career mentoring program in NYC, New York Needs You, and Bronx Success Academy 1 elementary school. He recently completed 50 marathons, one in each U.S. state, to raise $1 million for youth education and enrichment programs.
We recently met for a fascinating chat about technology, real estate and the future of the industry:
Omri Barzilay: I believe that we have to start our conversation with Zillow. Things have become very different in the industry since it launched in 2005. In your opinion, how did Zillow change the market for consumers?
Robert Reffkin: Zillow was the first company to provide aggregated information to the consumer. So for the first time, consumers felt empowered during the real estate transaction. Just the ability to search for property on their own gave consumers more control and more freedom throughout the process. Both buyers and sellers have more information at their fingertips and can be much more in charge of the transaction.
arzilay: Continuing the discussion on Zillow, how did it affect real estate agents?
Reffkin: It completely reshaped how agents grow their businesses, introducing the idea of bought-leads. To grow their business in the past, agents relied primarily on networking and creating relationships with other providers along the real estate value chain for leads as well as past clients or friends for referrals. Now, in addition to these channels, agents can purchase ad space or “premier” status on Zillow and other aggregators that give them preference when consumers are seeking an agent. For agents that have been able to convert these leads, Zillow is a lucrative growth channel – and significantly more effective broad-based advertising as it is specifically targeted at a captive, interested audience.
Barzilay: What is the role of the real estate agent in 2016?
Reffkin: Trusted advisor. With all of this information readily available, the agent’s role has evolved to more than just providing information to their clients, but more so, digesting, dissecting and translating information in the market for their clients. The agent needs to be able to take all of the data a client can find on their own and make sense of it. For example, a buyer can see the price at which transactions have closed recently or witness how crowded open houses are, but they likely do not know how that translates into negotiability in the current market or how these transactions trend as it relates to the market as a whole. The agent, or advisor, can look at these trends or anecdotes and synthesize this data into actionable recommendations for their clients.
Barzilay: What kind of technologies are changing the agent’s role and position?
Reffkin: The aggregators, the third-party product providers and the brokerages – each is addressing the shifting role differently. A modern-day brokerage needs to provide an environment which allows agents to save time, make smarter recommendations for their clients, and produce beautiful products to deliver to their clients.
Barzilay: What tech advantages do Compass agents have today that other agents don’t have?
Reffkin: One of the biggest frustrations from a tech perspective for agents at other companies is the lack of integrated and unified systems in the industry. There are over 250 outsourced tech products and tools for real estate agents out there but they don’t work cohesively together. One of the primary benefits of Compass’s platform is that it is all built in-house and therefore, all part of one unified platform. Additionally, having our own engineering and technology team means we can act quickly and respond to our agents’ feedback in real-time, so we can make sure the tools we are building are tools agents will use. One such example is our Compass markets app, which launched in New York last year. Compass Markets is a real-time research report, incorporating real-time data for the market, by neighborhood, property type, price point, property size, etc. Research reports are so important in this industry, but a typical brokerage’s research report goes stale the minute it hits the shelf, since it is a retrospective on the previous quarter and. as such, is on average 6 weeks old. In today’s market, with aggregators inundating consumers with information, agents need to be able to provide timely, relevant data to their clients, which is exactly what the app does, also allowing agents to send reports directly via text, email, or PDF.
The technologies we create are focused on saving agents time. The average agent can only spend 11% of their time with clients because 89% of the time they are burdened by non-core and administrative tasks. We are creating software to reduce the amount of time it takes to create buyer tours, to building listing presentations, to do comparative market analysis and more.
Barzilay: What should we expect from Compass in the near future?
**Article courtesy of Forbes.com and written by Omri Barzilay