Sixty-three years later, Josephine’s grandson, Andy Gagliardo, reversed course, decinding that a big brokerage could offer something his small, family-owned operation couldn’t.
“Being small, I’ve got to pay much more to have all the technology at our fingertips that you need in this business now,” Gagliardo said. “I was always paying for new technology to keep up.”
On July 14, Gagliardo folded his grandmother’s firm, now with 37 agents, into Compass, a New York-based business founded in 2012 as, essentially, a tech company that does real estate.
“They have a 50- or 100-person marketing team” at Compass, Gagliardo said. “I had one person doing marketing.” By folding into Compass, he said, “We got accessibility to all their marketing, all their technology.”
Homebuyers long ago switched from shopping for homes via the plush seats of a local real estate agent’s sedan to conducting much of their search online, and the industry evolved rapidly in the same direction. Compass set out to capitalize on the change, and firms like Gagliardo are finding they have to choose whether to ride along.
Gagliardo was the second deep-rooted suburban real estate firm to sign with Compass this spring. In May, the fourth-generation family members running Griffith, Grant & Lackie, founded in Lake Bluff in 1903, joined Compass as the 27-member Griffith, Grant & Lackie Group.
Brad Andersen, whose grandfather’s uncle, John Griffith, was the firm’s founder, calls the arrangement a “strategic alliance.” Without selling their firm, Andersen said, they connected to “an incredible marketing and technology platform.”
Using Compass’s purpose-built technology portal, Andersen said, an agent who uploads photos of her newest listing can quickly create branded sales brochures and ads. The portal also includes a comprehensive CRM, or customer relationship management system, for every aspect of relationships with home buyers and sellers.
By retaining a name that has more than a century of equity built up in the Lake Forest and Lake Bluff communities, Andersen said, they hang onto their “legacy brand as the local market experts.”
Other suburban boutique agencies that have joined Compass include Smothers Group Realty in LaGrange, in 2020, and the Hudson Company in Winnetka, in 2018. In the city, Compass acquired Conlon Christie’s International Real Estate in 2018, and Property Consultants Realty in 2020.
“We didn’t have the capital to have engineers on staff to be constantly improving the search engines,” said Joanne Hudson, who folded her 18-year-old Winnetka firm into Compass in 2018. “You can’t be a mom-and-pop shop anymore, because the demand for information and the demand for speed has increased. In order to keep your clients satisfied, you have to be state-of-the-art.”
For Compass, picking up boutique firms is a way to grow its business with “established players who are well known names in their communities,” said Fran Broude, a longtime Chicago real estate brokerage executive who joined Compass in August to drive its growth in Chicago.
Compass reported in July that it now has about 1,400 agents in the Chicago area, up from about 860 in 2020. That’s an increase of 63 percent. The growth was not all by acquisition of small firms; teams of agents switched from other brokerages to Compass, and new-to-the-business agents signed on as well.
The boutique firms that come over, Broude said, “are attracted to Compass’s technology package, yet they wanted the opportunity to hold onto their very well known local identity.”
Along with easily assembled marketing materials and promotion of their listings, agents at Compass can get coaching and advice at almost any hour on how to push a home out on social media, or how best to advertise a home’s particular amenities, Broude said.
“It’s very compelling for them to be able to connect to that talent pool,” Broude said.
Not all boutique firms are convinced. “Technology is very important, but there’s also the brand familiarity and the personal connections our agents are out there making,” said Larry Reedy. “It’s an agent-driven business, not a technology-driven business.”
Reedy is president of 90-agent LW Reedy Real Estate, a still-independent brokerage founded in 1951 by his grandfather, who was also named Larry.
Reedy said people often drop by the firm’s office on York Road in downtown Elmhurst to show off an old yellow LW Reedy giveaway t-shirt they found in a box, or to reminisce about buying a house in Elmhurst 40 years ago with the help of an LW Reedy agent.
That connection, he said, is “consistency, familiarity.”
Reedy said he’s trying to keep the firm up to date on technology, and “it hasn’t been without a fair amount of research.” He uses one firm for digital marketing, social media and other exposure for home listings, and another for the LW Reedy website, where clients can search for a listing or an agent.
Also holding onto its independence: JW Reedy Realty in Lombard, founded by a different branch of the Reedy family in 1928, and now run by his grandson, John Reedy.
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