By Nicole Friedman

Compass's acquisition of a rival real-estate brokerage firm looks poised to increase the number of U.S. homes that are listed privately, rather than through a traditional public listing.

With its all-stock purchase of Anywhere Real Estate for $1.6 billion on Monday, Compass is set to expand its fleet of agents from about 40,000 to more than 200,000 in the U.S. That would create a new industry giant, combining the two biggest brokerages by volume in 2024.

The most notable impact of the merger for home sellers is that it gives Compass more heft to pursue its recent strategy of promoting exclusive listings.

The firm encourages many sellers to make their listings available to its agents and their clients first, rather than immediately sharing the listing with the broader market as many other brokerage firms do. Compass says that listing privately gives sellers more options and enables them to test the market before advertising more widely. Sellers worried about privacy have also opted to use private listings.

"Sellers want more choice, not less choice" in how their homes are marketed, Compass Chief Executive Robert Reffkin said in a July earnings call.

Many of Compass's competitors argue that private listings make the housing market less transparent, and that sellers benefit from marketing their home as widely as possible to potential buyers from the start.

Compass's deal with Anywhere marks the latest in a string of major transactions this year, and it is expected to be a harbinger of more consolidation to come.

Brokerages and mortgage companies have struggled during a long stretch of anemic home sales, causing revenue to decline and many agents to leave the industry. Big companies are hoping to save costs and attract buyers and sellers by offering a more integrated experience with better technology.

"This industry for a long time had been this somewhat bespoke industry characterized by lots of smaller players," said Clelia Warburg Peters, managing partner at venture-capital firm Era Ventures, who was previously president of her family's brokerage business. This year "is going to be the year that the brokerage industry completely reconfigured."

Mortgage company Rocket recently agreed to buy real-estate brokerage Redfin and mortgage servicer Mr. Cooper Group. And Keller Williams Realty, another large brokerage company, raised money from investment firm Stone Point Capital to help it grow.

Compass's acquisition of Anywhere, which owns well-known brokerage brands such as Century 21, Sotheby's and Coldwell Banker, would create a combined entity with an enterprise value of about $10 billion, including debt. The deal is expected to close in the second half of 2026.

Anywhere's share price rose 46% Monday to $10.29, while Compass's shares fell 16% to $7.92.

Reffkin has said the company's goal is to reach 30% market share in 30 markets by 2030.

Compass and Anywhere have a combined market share of 18% of U.S. home-sales volume, including franchises, according to analysts at Keefe, Bruyette & Woods. That alone wouldn't necessarily trigger government antitrust concerns.

But in some markets, particularly the luxury markets where Compass has long specialized, the footprint could be significantly larger. In New York City and San Francisco, for example, the combined company would have an estimated market share of more than 40%, according to Steve Murray, partner at real-estate consulting firm RTC Consulting.

That could raise issues for Compass to get regulatory approval for the acquisition, Murray said.

If Compass ramps up private-listing offerings, its competitors are likely to do the same in response, said Jack Miller, chief executive of real-estate consulting firm T3 Sixty. That could create a market where buyers would have to consult more sources to find all the homes for sale in a particular neighborhood.

"The buyer experience is going to be potentially a little more fragmented," he said. "You're going to have to look a few different places in order to find all the listings on the market."

Compass's private-listings strategy is hotly debated within the industry. The firm has sued a multiple-listing service in the Seattle area called Northwest Multiple Listing Service and listings company Zillow Group over policies that Compass says restrict private listings.

"Compass has been waging a campaign against market transparency to the detriment of consumers and agents," a Zillow spokesperson said in a July statement, adding that Compass's lawsuit "gets both the facts and the law wrong." Northwest MLS declined to comment.

Even with this year's consolidation, there are roughly 100,000 real-estate firms in the U.S. Brokerage firms can encourage agents to use certain marketing strategies, but most agents are independent contractors who can choose what they think works best for their clients.

Agents also compete fiercely with each other, even sometimes within the same brokerage, and they often move from one brokerage to another.

Buyers and sellers typically care more about having an agent they trust than about their agent's brokerage brand, said Victor Lund, managing partner of real-estate consulting group WAV Group.

"Agents are going to vote with their feet, and they're going to be the ones that determine whether this was a good transaction or not," he said.

Write to Nicole Friedman at nicole.friedman@wsj.com

(END) Dow Jones Newswires

September 22, 2025 21:00 ET (01:00 GMT)

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