Introduction

Factors Influencing Real Estate Industry Players to use Technology-Driven Platforms

•  Technology is shaping the real estate industry — more than 70% of today’s buyers search for homes online, and 85% of real estate agents use texting to get work done.
• The real estate tech sector itself will not be replaced by a single technological solution, but rather changes enabled by technology and leaders that embrace it; hardware acquisition does not replace the adoption of innovative solutions (software solutions, applications and platforms). Consequently, 93% of agents agree that real estate businesses must engage PropTech companies to stay relevant, with 30% of real estate companies currently investing or planning to invest in PropTech start-ups.
• As the industry is seeing more technology applications for VR, the cloud, and block chain, forward-thinking realtors are currently moving beyond photos and 360-degree video to offer clients 3D virtual property tours on their personal devices.

Why Agents, Brokers, and Buyers Choose Compass over Competitors

• The high-tech real estate startup's co-founder and CTO have extraordinarily strong tech backgrounds, and a full 5% of Compass non-agent workforce is devoted solely to tech. An infusion of $1.6 billion from SoftBank enabled Compass to continue to build a technology team of more than 300+ engineers to support agents by offering software on their platform that eliminates busy work, and enables agents to work with more clients and close more sales.
• A large percentage of annual revenue is paid directly to agents (70%–90%), with a smaller percentage retained by Compass as its gross profit. High producing agents command more favorable commission splits as high as 90/10 — and evidence, in some cases, shows that Compass offers 100% commission splits as a recruiting incentive, either for a certain amount of time or a fixed number of deals.

How Technology has Created Stronger Competition Across the Real Estate Industry

•  Artificial intelligence (AI) is revolutionizing the real estate industry, and the opportunities that accompany AI are helping agents and brokers better understand and dissect data to assist clients and secure sales. Consequently, Statistics show during a 12-month period (2018) Compass generated more revenue ($2.6+ billion) in San Francisco home sales representing buyers versus $250 million by Redfin.
• The use of modern technology during the home valuation process helps to eliminate human bias, automate routine tasks, makes home searching more sophisticated, and data determined by the intelligent algorithm helps agents and homeowners, get a better deal. In a recent survey, 92% of agents agreed that in the near future, computer vision technology will become a more important factor in their decisions about which companies to work with.
• The Internet of Things (IoT) is helping real estate professionals grow and manage businesses more efficiently than ever before. With the onset of huge volumes of data and millions of data points, terms such as big data, machine learning and artificial intelligence (AI) are becoming common place in the real estate industry, and the technology is, or will be, available to support data driven services- there is a strong appetite to consider using new technology-driven solutions, with 72% of agencies considering its use.

Research Strategy