Compass acquisition could worry some California agents

Compass acquisition could worry some California agents
Compass announced Monday that it has reached an agreement to buy San Francisco-based real estate transaction platform Glide, a deal that some California real estate agents may feel uneasy about.

The buy is Compass’s first since the residential brokerage started publicly trading shares earlier this month. Glide, which was founded in 2017, provides tools like eSignature and the digitization of sales processing forms.

Suspicious real estate agents and rival brokerage heads in California will worry that the deal could funnel general information about California home sales to Compass thanks to a recent partnership Glide announced with the California Association of Realtors.

In March, Glide entered a deal with the California Regional Multiple Listings Service, which is the National Association of Realtors-sanctioned marketplace for California home listings viewable by all California Association of Realtors members.

Under the agreement, the California Association of Realtors gained “access to a comprehensive suite of tools allowing them to create, manage, negotiate, and close offers on real property, all at no additional cost and integrated with their MLS platforms,” read the March release.

In effect, said one Bay Area broker, who requested anonymity to speak candidly, “All the agents in California were starting to use Glide for backroom technology.”

Now, those agents will have to switch to another transaction platform, the broker said, or risk providing private information about sales to Compass.

But in a statement on Monday, the firms said that all Glide user data will be housed on separate, dedicated servers from Compass’s. In a blog post, Sebastian Tonkin said the company’s terms of use and privacy policy were updated and the firm will also hire an independent privacy expert to ensure competitors’ data won’t be accessible.

Unclear is whether the California MLS may renege its relationship with Glide.

“Our agreement with Glide prohibits sharing members’ data without members’ consent,” a California Association of Realtors spokesperson emailed Monday. “Of course, CAR is examining all of its options to make sure that data integrity and CAR’s high standards of privacy for its members and their clients are protected.”

Added the spokesperson, “CAR will continue to monitor the Compass-Glide transaction in the days and weeks ahead and keep you informed of developments.”

Reached Monday, a Compass spokesperson declined to answer specific questions, instead referring to the company press release on the Glide purchase.

You could understand why other brokerages and agents wouldn’t be entirely convinced their data would be cordoned off. Compass has faced allegations before of getting into competitors’ data. Separate lawsuits filed by Zillow and Realogy have accused the company of stealing sales data, customer lists, and intellectual property. (The Zillow suit was settled in 2019, and the Realogy lawsuit is still pending. Compass also countersued Realogy in January 2021, blasting the conglomerate for alleged defamation, lies and unfair business practices).

Further, Glide was sued in January by Lone Wolf Technologies, which accused the San Francisco company of using Lone Wolf’s proprietary technology outside the company’s partnership agreement, and accessing Lone Wolf company files without authorization.

The release notes that Glide is “used on over half of California real estate transactions” and “is offered as a member benefit” by over 60 NAR-affiliated organizations.

Compass’s acquisition comes as other industry players also seek to seize more information about consumers and competitors. For example, Zillow announced in February that it would buy ShowingTime, the industry’s leading digital home-showing scheduler, for $500 million.

Compass, which has spent north of $300 million to acquire other real estate brokerages and technology firms, did not disclose the acquisition price of Glide.

Founded in 2013, Compass grew fast thanks to an ability to raise venture capital money from SoftBank and other financiers and went public on April 1. Compass closed trading Monday at $18 per share, good for a market capitalization of $7 billion.

The company lost $270 million in 2020, according to financials provided during the initial public offering process. On the other hand, Compass has shot up the brokerage rankings – placing 2nd in U.S. sales volume behind only Realogy, according to RealTrend’s 2020 tally.
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