If antitrust lawsuits are impacting agent commissions, it’s not happening at Compass.
The brokerage claimed on its second-quarter 2024 earnings call that it’s experiencing virtually no changes in commissions despite the $418 million settlement agreed to by the National Association of Realtors (NAR) following a string of lawsuits related to buyer commission rules.
“It has been four and a half months since the announcement of the NAR settlement, and we have not seen a noticeable change from before the settlement in either the percentage of sellers that offer buyer’s agent commissions or in the average commission amount they’re paying the buyer’s agents,” Compass CEO Robert Reffkin said on the call.
“To be clear, the fears many had about commissions going down or buyer compensation disappearing have simply not materialized.”
Compass also said it is not seeing any changes in new listings with regard to commission offers, whether on the Compass platform or on multiple listings services (MLSs). In May and June, the company claims that 99% of new listings included offers to pay buyer agents, 96% of new listings offered to pay at least 2%, and more than 80% included offers of 2.5% or more.
Furthermore, Reffkin does not expect this to change after Aug. 17 when the new rules mandated by the settlement take effect.
“There’s not going to be, like, national headlines on Aug. 17 saying anything around this,” Reffkin said. “What it does is let the buyer agents actually negotiate for themselves, so the best agents are actually happy with it. Buyer agents I meet across the country, they’re asking their buyers for more than what the listing agent was negotiating on their behalf historically. I can see things being flat, I can see them maybe going down modestly, but I can also see them going up. Time will tell.”
The good news on commissions came in tandem with other positive financial news for Compass, which reported positive net income for the first time as a public company. The profit for Q2 2024 came in at $20.7 million, which follows a net loss of $133 million in the prior quarter.
The company achieved that profit by bucking negative trends within the industry, as transactions rose 11.4% year over year while transactions for the rest of the industry declined by 3.3%, as reported by NAR. This pushed company revenue up to $1.7 billion, a 14% jump compared to the same period last year.
Compass attributed 5% of the revenue increase to acquisitions of other brokerages and 9% to organic growth in agents. The brokerage added 3,299 agents in the Q2 2024 through organic growth and acquisitions, good for a 24% year-over-year gain, and its market share hit 5.13%, up 50 basis points from Q2 2023.
The call did come with a setback for agents. Compass plans to adjust the way it distributes equity within the company to lower the cost associated with it.
Technology continues to be top of mind for the company, as it laid out a vision for its proprietary platform. It plans on fully integrating its title and escrow business into it by the end of the third quarter. It’s launching a beta version of its client dashboard in October, with full rollout finishing at the beginning of 2025.
Compass is launching its “Make-Me-Move” tool in August, which it believes will help convert what it calls “passive inventory,” homes owned by people who aren’t actively selling but would sell at the right price.
