If antitrust lawsuits are affecting agency commissions, this isn’t happening compass.
The brokerage claimed during its second-quarter 2024 earnings call that its commissions would see little change despite the brokerage agreeing to a $418 million settlement. National Association of Realtors (NAR) There has been a series of litigation related to the buyer’s commission rule.
“Four and a half months have passed since the NAR Settlement was announced, and we have not seen a significant change in the proportion of sellers offering buyer’s agent commissions or the average amount of commissions they pay to buyers’ agents compared to before the settlement,” Compass Chief Executive Robert Reffkin said by phone.
“To be clear, the fears many had about commissions falling or buyer compensation disappearing have simply not materialized.”
Compass also stated that there have been no changes to commission offers for new listings, whether on the Compass platform or the Multiple Listing Service (MLS). The company claims that in May and June, 99 per cent of new listings included offers to pay a buyer’s agent, 96 per cent of new listings included offers of at least 2 per cent and more than 80 per cent of listings included offers of 2.5 per cent or more. Quotation.
Furthermore, Refkin does not expect this situation to change when the new rules set forth in the settlement agreement take effect on August 17.
“There will be no national headlines talking about this on August 17,” Refkin said. “What it does is allow the buyer’s agent to actually negotiate on their own, so the best agents are actually comfortable with it. The buyer’s agents I meet across the country, they ask for more than just the listing agent history On what’s being negotiated on their behalf. I can see things flattening, I can see them possibly going down modestly, but I can also see them going up. Time will tell.
The good news on commissions comes alongside other positive financial news for Compass, which reported positive net profits for the first time as a public company. Profit for the second quarter of 2024 was $20.7 million, compared with a net loss of $133 million in the previous quarter.
According to NAR, the company achieved this profit by reversing negative trends in the industry, with transaction volume increasing by 11.4% year-on-year, while the rest of the industry experienced a 3.3% decline in transaction volume. This brought the company’s revenue to $1.7 billion, a 14% increase from the same period last year.
Compass attributed 5% of revenue growth to acquisitions of other brokerages and 9% to organic growth among agents. The brokerage added 3,299 brokers through organic growth and acquisitions in the second quarter of 2024, an annual increase of 24%, and its market share reached 5.13%, an increase of 50 basis points from the second quarter of 2023.
The call did cause frustration for the agent. Compass plans to adjust the company’s internal equity allocation method to reduce related costs.
Technology remains top of mind for the company as it develops a vision for its proprietary platform. It plans to fully integrate its ownership and hosting operations by the end of the third quarter. The company will launch a beta version of the client dashboard in October, with a full rollout in early 2025.
Compass is launching a “Make-Me-Move” tool in August that it believes will help transform so-called “passive inventory,” homes owned by people who are not actively selling but will sell them at the right price.
