A recent search on Compass.com for properties in Brooklyn’s Park Slope neighborhood yielded 41 listings, all of which were Compass listings. This raises concerns about the company’s commitment to providing a neutral platform for buyers and sellers.
Compass has been critical of third-party real estate portals, arguing that they do not represent the best interests of sellers and can strip out listing agent details. However, the company’s own practices have come under scrutiny, particularly with regards to its Listing Agent Lead and Referral Program.
Compass’s Referral Program
When a buyer submits an inquiry on Compass.com, the listing agent is prompted to route the lead into the Compass Leads Program in exchange for a 10 percent referral fee. The lead is then passed on to another internal Compass agent, and the listing agent receives a slice of any buyer-side commission if the sale closes within two years.
This program has been criticized for creating a conflict of interest, where the agent’s incentives are not aligned with the seller’s needs. By financially encouraging agents to reduce the market exposure of their sellers’ listings, Compass is essentially prioritizing its own interests over those of its clients.
A calculation of the referral program’s fees reveals that Compass can earn significantly more when it controls both sides of the deal. For example, on a $3 million sale with a 2.5 percent commission, Compass can earn around $55,900 if the buyer arrives through the referral program, compared to $22,500 if an outside broker brings the buyer.
The referral program has also been compared to StreetEasy’s Experts model, which funnels buyer leads to agents in a paid tier and takes a 25 to 35 percent cut at closing. However, Compass’s program has been criticized for lacking transparency, with the company’s inquiry form failing to clearly disclose the referral fee or warn that the agent calling back may not be the listing agent.
Compass’s Hypocrisy
Compass’s actions have been accused of hypocrisy, particularly given the company’s public stance on the importance of transparency and neutrality in the real estate industry. By prioritizing its own listings on its platform and financially incentivizing agents to limit a home’s market reach, Compass is essentially doing the opposite of what it claims to stand for.
The company’s recent acquisition of Anywhere and its efforts to keep every dollar of a transaction under one roof have also raised concerns about its commitment to transparency and fairness. As one critic noted, Compass’s actions are essentially a form of “hypocrisy at its finest.”
Compass has also been accused of using listing data as a weapon against its rivals, particularly in its efforts to restrict the flow of transaction data to agent-recruiting tools. This has been seen as a contradiction to the company’s previous stance on the importance of open and unrestrained data flow in the real estate industry.
A search of the New York metro market on Compass.com reveals pages of Compass-branded inventory before listings from outside brokerages are shown.
One thing is clear, however: the company’s commitment to transparency and fairness will be closely watched in the coming months.
According to the report, Compass sent letters to MLSs asking them to exclude its transaction data from feeds licensed to agent-recruiting tools, claiming that the MLS exists to facilitate transactions, not to “weaponize operational data” for competitor poaching.
Consequences for the Real Estate Industry
The company’s use of listing data as a weapon against its rivals is a clear example of its aggressive business strategy, which prioritizes its own interests over those of its clients.
