URBAN COMPASS HAS HIT THE MARKET

http://www.theverge.com/2013/5/7/4304374/urban-compass

                This article is about a new a real estate site Urban Compass.  This site has made very aggressive moves and has hired a head broker to manage 30 hourly paid brokers in New Y ork City.  They are trying to take down the traditional method of listing apartments by making sure that their listings are updated in real time, accurate, and competitively priced.

                From reading this article this company seems well funded, aggressive, and ready to do more than just real estate.  A good thing, or a bad thing?  I think they have lofty goals and that may be a good thing.  Investors have confidence in the founders based on past successes and they have raised over $8 million of funding.  The value for this company seems to combine the value of CitiRents and what I currently do at AT&T.  They talk about creating an alternative to traditional broker relationships (like CitiRents).  They also tout the future ability to leverage the information they will have about their client base: age, address, credit verified info, etc (like AT&T).  It looks like they are trying to grow their client/vendor relationships as quickly as possible in order to grow markets and branch out to other sectors.

                Overall, their strategy is different enough that I don’t think this site is threat to CitiRents.  They are similar enough to the traditional method of renting an apartment but it doesn’t seem like they are using the Lean Startup Method.  They are spending a lot of cash and traditional leasing offices are ready to outhustle this new business.  I signed up for the site and their fees are between 7.5%-12.5%.  Is that really any more affordable?

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One thought on “URBAN COMPASS HAS HIT THE MARKET

  1. Even though I think it wouldn’t be possible to dominate the market by having fixed-salaried sales force, having verified listings and a trustable system gives them an advantage. Relatively low fees also make it preferable for clients to use Urban Compass.

    On the other hand, as also mentioned in the article, it would be hard to convince an elderly landlord to use this system instead of old-school methods. In addition to that, a broker with a fixed salary might not be as motivated and creative as a broker working on commission.

    I definitely think they would capture a profitable portion of the real estate market, but I am not sure if they could dominate the market with this system.

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