Compass is making temporary changes to its bridge loan and concierge programs, at a time when the real estate market and economy are slowing down due to the spread of COVID-19 (coronavirus).
In an internal memo obtained by Inman, Mark McLaughlin, the president of Compass in California and former CEO of Pacific Union International, laid out the changes, which were later confirmed by a spokesperson for Compass.
Changes to Compass Concierge
Compass Concierge is a cleaning and staging service, where the real estate brokerage covers the upfront cost for homeowners to undertake certain projects to prep a home for the market. The work is done by local vendors, through consultation with the agent and is paid for — at zero percent interest — when the home sells or the listing agreement is terminated.
Compass plans to temporarily restrict approval to projects $30,000 and under on homes that do not exceed $3 million in list price. Concierge Capital will also be limited to delivering funds through debit cards.
“These revised policies maintains our focus to the sweet spot of our market and should mitigate disruptions,” McLaughlin said, in an email.
Compass is also temporarily withdrawing from second-home markets like Napa and Sonoma County in Northern California and Malibu in Southern California.
“We partner with leading financial institutions and lending partners to drive the Concierge program, and based on what they are seeing in the overall market, they have strongly recommended making these temporary adjustments,” McLaughlin said.
Changes to Compass Bridge Loans
Compass, in October, launched a bridge loans program aimed at giving homeowners listing with Compass immediate access to equity, if they’re simultaneously buying while selling.
The company is temporarily pausing the Bridge Loan Advance offering, a main component of the company’s offering, where Compass fronts the first six months of the costs associated with the loan.
“Bridge Loans are still active, and we are fully supporting it through our partners as a great means to better serve your clients during these times of high anxiety,” McLaughlin said. “This will not affect Bridge Loan Advance loans already applied for or approved.”
McLaughlin explained that, across the industry, Compass has seen competitors discontinue similar services with uncertainty in the market.
“We are committed to continuing to invest in these programs so you have these tools at your disposal as you advise clients through the coming weeks,” McLaughlin said. “We will be closely monitoring the fluidity of this situation and will continue to share updates as we learn more over the coming weeks.”
A spokesperson for Compass confirmed the changes in a statement.
“As a result COVID-19, Compass is temporarily suspending only the Bridge Loan Advance offering of the greater Bridge Loan Services program and thoughtfully reducing maximum project size for our Concierge program,” the statement said. “These temporary measures are being put in place to ensure the continuity of these programs during this time of market uncertainty and will be removed once our lending partners feel comfortable in the larger market.”
