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On the final day of Inman Connect, Compass and other brokerages face off

The Inman Connect New York stage was hot Thursday as Rory Golod (the president of Compass’ North East division and California divisions), Thaddeus Wong (the co-founder of @properties), and Leo Pareja (the chief strategy officer at eXp Realty) took to the main stage. The panel discussed common misconceptions and assumptions about their brokerages, and it was billed as a “real-estate battle royale”.
This happened just one week after Wong attacked Compass in an episode of The Real Deal’s The Closing. Golod & Wong then got into the act.
Wong’s main complaints about Compass revolve around the way the firm was advertised and valued as a technology company and the way the firm sold stock shares at discounted prices to agents.
“Compass doesn’t scale its technology beyond their organization,” Wong said. Wong stated that there is no inflection point and there is not scalability.
Golod acknowledged that Compass stock prices have fallen dramatically, but he said that when it is viewed in the context the stock market as a whole, it’s not so bad.
Golod stated that the world is 50% less than it was one year ago. “Those companies aren’t 50% worse — it is just indicative of the market and world we are in.”
Golod also addressed some criticisms Compass has been subject to, including the use of incentives to encourage agents into the brokerage. This practice was stopped by the firm in August 2022.
Golod stated that for a long time people believed agents only came to Compass for financial incentives. They only stayed for the financial incentives. “We have hired nearly 1,000 agents since August 2022. They have not only come to Compass for financial incentives but they are also paying Compass more than their previous firm. People are coming to Compass because of the company’s value.
Wong disapproves that Compass no longer offers financial incentives. However, the main incentive Wong has for Compass is the agent stock option. This will continue to impact Compass agents.
“It’s not giving shares to agents, and it’s certainly not giving a trickle down tree if you bring in agents. Wong stated that it is actually luring agents into investing money. “I know of an agent who took 25% of their commission to purchase stock, but he lost it all. He can’t leave because the contract obligates him to pay money. You can’t leave the agency unless you have read the contract.
Despite the current challenges Compass and its stock face, Golod remains optimistic about Compass’ future.
Golod stated that Compass’s value will not be determined by whether it is a tech or real estate company. It will be determined by EBITDA or free cash flow. I am confident that stock investment will be one the best decisions agents have made.”
Pareja’s firm, EXP, was the target of some shots, even though most of the discussion revolved around Compass’ agent recruiting practices.
“The rumor that I hear most about eXp, is that you guys only recruit, and you don’t even sell homes,” Jeff Lob, SparkTank Media CEO and panel moderator said.
Pareja responded by citing the numbers, pointing out that eXp had sold approximately 400,000 houses as of Q3 2022.
Pareja stated that recruiters are influencers and are the ones who build companies. This allows us to give agents the best experience, which allows us focus on giving them the best experience.
Pareja also highlighted the fact that all eXp agents work under one umbrella, unlike other franchise firms — giving the firm greater growth potential.
Pareja stated that franchises are a way to make sure that someone else is buying the territory next you. However, they might be flying the exact same flag as you, but you are at war with them.
The panelists stressed that although the executives and brokerage firms may have differences, agents should find what works for them.
Pareja stated that there is something for everyone — brokers, agents, consumers. “Find the right place for you to thrive and start the business you want.”