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Compass faces a financial reckoning
Compass faces a financial reckoning and if you read the tea leaves, it could get worse for the nation’s largest residential real estate brokerage firm.
Compass in the last few years was in a buying spree and gobbled up independent real estate offices and provided huge agent incentives to gain market share in some of the nation’s most competitive cities, such as Boston.
Time to pay the pied piper
In Compass latest quarterly report it showed mounting losses and slashed revenue forecasts along with sinking stock value. Coupled with an unsteady economy and rising mortgage rates are putting the housing market through the wringer, and now Compass recently announced layoffs, and it isn’t yet clear how bad things will get for Compass.
In the video below, The Real Deal’s Hiten Samtani breaks down what’s happening with Compass, which lost money even when the housing market was booming last year, and explains why the shaky summer is having such an effect on the brokerage. Most importantly: What could Compass’ financial troubles mean for its agents?
That could mean significant shifts for both new and longer-tenured brokers and agents concerning commission splits and revenue sharing. And while Compass isn’t the only firm that’s likely to struggle in a down market, it marks a change of tune as Compasss shifts from constant growth to flat revenues and flat transactions to even major loses.
Watch the video for more
