NEW YORK — To hear Urban Compass CEO Robert Reffkin talk about his startup, you’d never know that the company once touted an unconventional compensation model as part of the answer to many consumers’ frustrations with the home-searching process.
While emphasizing the brokerage’s tech credentials, Reffkin, a former White House fellow and Goldman Sachs alum, repeatedly noted that its compensation model is “traditional” during a sit-down interview with Inman News Publisher Brad Inman at Real Estate Connect.
For those familiar with Urban Compass’ early-days value proposition, the notion that any aspect of Urban Compass might be described as “traditional” by its CEO might seem implausible.
The startup, which has raised $33 million less than a year into its launch, originally paid its agents salaries and bonuses based on customer satisfaction, not commissions. And its agents weren’t even called agents; they were called “neighborhood specialists.”
But that’s all changed over the last three months. Now, the firm pays many of its agents on commission, and it’s rebranded its “neighborhood specialists” as, well, “agents.”
Reffkin said the pivot, something of a concession to the traditional real estate model, was “really driven by our desire to move into sales.”
The startup originally focused exclusively on rentals. Responding to customer demand, Urban Compass expanded into home sales. In sales, “great sales agents” prefer to be paid on commission, Reffkin said.
“Our value proposition has always been focused on having the best agent and the best technology to work with,” he said.
Reffkin said the term “neighborhood specialists” was scrapped because it was too confusing for Urban Compass’ customers.
If Reffkin has his way, Urban Compass will attract legions of agents. He said at Connect that the startup’s vision is to be the “brokerage of choice” at a national and international level.
For its first phase of expansion, Urban Compass is eyeing major metropolitan areas including Miami, Philadelphia, Chicago and San Francisco, he said.
As Urban Compass continues to branch out, more and more agents may find themselves with the opportunity to join the firm.
But why would agents or consumers choose a startup over battle-tested players?
Reffkin said that Urban Compass’ tech tools set it apart from the pack. Developed by an all-star team of programmers culled from Google, Facebook and Foursquare, the startup’s techies have forged exceptional technology, he said.
According to Reffkin, the mobile app they offer to agents allows them to collaborate with their clients to search listings based not just on price, size and location, but also home features, and lets them schedule visits and even close transactions.
Urban Compass has also built a listing management dashboard for landlords that it believes will help it acquire exclusive listings, Reffkin said.
Editor’s note: An earlier version of this story misattributed the quote “took the old path” to Reffkin. In fact, Brad Inman asked Reffkin if Urban Compass “took the old path” and applied “heavy-duty technology.” Reffkin responded, “exactly.”