Early on a September morning, Compass and Anywhere Real Estate dropped a bombshell on the industry: The two residential brokerage giants would become one.
“Today marks a monumental day for Compass,” CEO Robert Reffkin said, addressing investors less than two hours after news of the seismic deal made headlines. “This combination will be transformational.”
During the call, Reffkin and other Compass executives spelled out the details of the merger. Compass would acquire Anywhere in an all-equity transaction, which valued the parent company of brands such as the Corcoran Group and Coldwell Banker at $1.6 billion. Compass leaders vowed that the subsidiaries would remain distinct, although they’d officially be under the brokerage’s banner.
Reffkin would helm the combined firm, with his company taking 78 percent of the ownership in exchange for assuming Anywhere’s $3 billion debt. The deal, which is set to close next year, looks like a win-win: Compass makes huge strides in its ruthless quest for market share, while Anywhere relieves some of the burden that’s been plaguing its balance sheet.
The move is a solid development for Compass’ master plan to build a database of private listings exclusive to agents under the firm’s umbrella, a trump card in its feud with Zillow, the National Association of Realtors and multiple listing services. Compass’ crusade is the first time these reigning industry institutions have been challenged on this scale.
Missteps could sour the company’s relationship with Wall Street, which has historically struggled to wrap its head around a business ruled by thin margins and independent contractors.
Power play
Almost a year has passed since Compass incited the war with residential real estate’s establishment over when and where its agents list properties. Now, with Anywhere in its fold, Compass may finally have the firepower to end it.
Reffkin has doggedly campaigned for an end to NAR’s Clear Cooperation Policy, a rule that requires agents to upload listings to the MLS within a day of public marketing. The brokerage has also sued Zillow, arguing that its rules barring agents from advertising homes that were once private exclusives on its platform are anti-competitive.
Marrying the brokerage with a vast library of listings could allow Compass to ditch MLSs and keep its data in-house, according to Marx Sterbcow, a real estate attorney in Louisiana.
“Whatever Trump wants or doesn’t want, that’s the way it’s going to happen.”
Instead of agents having to “buy their own data back” from aggregators like Zillow, which sells leads to brokers through its Premier and Flex programs, Compass could charge these platforms to access its inventory, Sterbcow said, and would essentially become its own listing platform.
“The real money is in what you call online real estate, where you end up on the search engines,” said Sterbcow. “The higher up you are, the more valuable your company is, the more exposure you get. That’s truly what this is all about.”
But whether the Department of Justice’s antitrust division, tasked with evaluating mergers for signs of violations, cares to investigate, is another question.
“Whatever [President] Trump wants or doesn’t want, that’s the way it’s going to happen,” said Francis Riley, a New Jersey-based attorney.
“If it was a commercial brokerage, I’d say absolutely. Residential, maybe not so much.”
Sizing up the giant
Together, the two firms are a juggernaut.
Compass and Anywhere are the two largest brokerages by sales volume, and after the merger, their combined enterprise value would total an estimated $10 billion. Their sales volume, if last year was any indication of their future performance, would dwarf that of their nearest competitors.
In 2024, Compass notched more than $230 billion in sales, the highest in the nation, while Anywhere, in the No. 2 spot, nabbed $184 billion, according to data from RealTrends. Their combined $414 billion in sales was more than double the deal volume of the third brokerage on the list, eXP, which ended the year with $153 billion.
If the companies retain the majority of their agents, the merger will bring roughly 340,000 of them under the same umbrella. Keller Williams, currently the largest brokerage by headcount with more than 150,000 agents, will be left firmly in the dust.
“The political influence of the new Compass within the industry is likely to be much larger than their market shares. This market influence is also likely to be seen politically, especially in court decisions.”
Compass and Anywhere’s combined agent count would account for about 20 percent of Realtors in the country, and their share of sales across most markets in the country add up to less than a quarter of the total.
But there are some locales where a joined Compass and Anywhere would control a significant portion, if not a dominant share, of the market, according to Stephen Brobeck, a housing and real estate researcher with the Consumer Policy Center.
Brobeck examined 150 to 200 deals across dozens of markets and found that the duo, merged as is, would control the majority of the market in Boston and become the top seller in cities such as Chicago, San Diego, Atlanta, Dallas and Baltimore. With Corcoran and Sotheby’s International Real Estate in the mix, Brobeck said Compass will likely become the leading player in the luxury sector.
Monopoly math
As a mammoth, Compass may at last be within striking distance of challenging the status quo. With inventory and agents on its side, Compass could pressure Zillow to lift its rules and push NAR to further weaken its CCP rule, pulling power away from MLSs. If the company can crack open the industry’s listing ecosystem, the firm’s executives will have finally achieved the disruption they’ve been seeking since the firm’s inception.
But there is plenty of time for roadblocks or adjustments to the initial terms to disrupt the process.
One concern could be clashing cultures between Compass and some of Anywhere’s brands, which, in many markets, may view each other as competitors.
“Anytime you buy a real estate brokerage, you’re going to have real estate agents fall out and not want to go to the other place,” said Sterbcow, the Louisiana lawyer. “These are two different cultures. You’ve got New York versus New Jersey.”
The deal could also attract scrutiny from federal regulators. Under the Hart-Scott-Rodino Antitrust Improvements Act, the merger requires sign-off from the agencies tasked with ensuring that major acquisitions don’t stifle competition within industries.
On a national scale, a combined Compass and Anywhere account for less than a quarter of housing transactions. But regulators often do a market-by-market analysis in deals such as this to determine whether the company would have significant sway in a particular region.
For a business like real estate, that granular analysis is likely a more accurate way to evaluate market dominance, considering residential home sales and the businesses that touch them are more local in nature. It could come down to overlapping entities in a given market, according to Riley.
“Unlike television stations, you have agents attempting to get a finite amount of business,” Riley added. “A million people aren’t buying every day. They’re not selling every day.”
“That’s a significant issue,” he said. “Are you saturating the market with, effectively, the same company?”
Compass previously addressed antitrust concerns in California, where a Christie’s International Real Estate franchise in the northern part of the state became an independent shop after the brokerage’s acquisition of @properies.
But federal authorities are operating in unprecedented times. Like other government agencies, the DOJ has seen its funding cut under the Trump Administration and could be short on resources for a merger probe. Plus, those tapped to run the DOJ’s anti-trust division, along with other relevant agencies, appear to be more concerned about aligning with the president’s agenda than enforcing a set standard.
Riley said authorities are “going to do the White House’s bidding.”
“I can’t say anything about the stance the DOJ is going to take on this,” Brobeck said. “Their positions on mergers seem more personal than institutional, and it’s hard to predict how they will view this one.”