Compass is launching a new, no-interest loan program aimed at providing its own brokers with capital. Dubbed the “Agent Betterment Fund,” the program seeks to help agents hire staff, get coaching or training and further grow their business.
The program, which several sources described as unprecedented in real estate, will allow Compass agents of all income levels to pursue opportunities already dominating the individual housing markets where they operate. Terms of individual loans, repayment policies and borrowing rates were not immediately available as of Monday morning.
“As a company, we are continuing to focus on growth and expanding to new markets while working hard to build the world’s most agent centric company,” said Compass CEO Robert Reffkin, in a companywide email obtained by Inman on Sunday.
“That growth is helping us get closer to the dream of building the single platform that helps protect and grow our agent’s businesses and to eventually create a second source of income for our agents through referrals from ancillary services,” added Reffkin. “However, we want to also focus on how we can grow our existing agents businesses. We want to make sure we are pushing the company and each other to do everything we can to help you build your client base, sell more homes and make more money.”
Reffkin said the idea evolved after speaking to an agent in Seattle, who told him that she sought to invest more money into her business and use it for things like coaching and team building. In the company-wide email, Reffkin said he has since heard from other agents who say they would use the capital for coaching, education, team building, lead generating, staging and client engagement.
The fund could theoretically work in tandem with Compass’ Agent as a CEO program, its nascent leadership training platform.
“I often hear from agents that they need to wait until their business grows to afford to bring on additional people,” Reffkin wrote. “Unfortunately, not having those people is creating the barrier to that growth. It is my hope that this program will help alleviate the initial financial pressure that comes with looking to grow your teams.”
Compass last year raised $550 million in venture capital funding and, since that giant infusion, has rolled out smartphone-connected real estate signs, expanded rapidly and attempted to start licensing its technology platform.
Announced last year, the company’s 2020 vision plan, known internally as “2020 by 2020,” seeks to gain 20 percent market share in the top 20 metro markets by 2020, Compass currently operates in New York City; The Hamptons; Boston; Miami and Ft. Lauderdale, Florida; Washington, D.C.; Los Angeles and Orange County; Santa Barbara and Montecito, California; Aspen, Colorado; Chicago, Dallas, San Diego and the San Francisco Bay Area, among other markets nationwide.
While much of Compass’ expansion has been launching in new markets and making big-name acquisitions, Compass can also continue to expand organically by supporting the growth of teams, through the Agent Betterment Fund.
Compass did not immediately respond to a request for comment on the new program, or details on terms of individual funding, borrowing rates or defined re-payment plan. The story will be updated when more information becomes available.
A number of executives at brokerages of various sizes confirmed to Inman, on background, that they had never heard of such a program. Russ Cofano, the president and co-founder of the app-based brokerage Real and the former president and general counsel at eXp World Holdings also said he’s never heard of such a program, but thinks it’s brilliant for Compass.