Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

'Selling Sunset' broker Jason Oppenheim says 'Compass basically destroyed the brokerage model for the entire industry'

'Selling Sunset' broker Jason Oppenheim says 'Compass basically destroyed the brokerage model for the entire industry'

Oppenheim called the amount Compass brokers get to keep from commissions "unsustainable," but Compass said it has no plans to change its "split policy."

The superstar real-estate broker Jason Oppenheim railed against an embattled rival firm, Compass, saying the company "destroyed the brokerage model for the entire industry" and faces a "grim reality."    

"There's no fixing Compass," Oppenheim, best known from the Netflix reality show "Selling Sunset," told the real-estate news outlet Inman.

Oppenheim closed over $429 million in sales last year as the head of his own brokerage, The Oppenheim Group, a Los Angeles-based firm that his great-great-grandfather founded in 1889. 

Oppenheim's critique centers on "splits," the slice that a brokerage takes from an agent's commission each time they buy or sell a house on a client's behalf. Brokerages use that money for everything from shared office space to marketing resources. 

Splits can range from 50-50 all the way up to 90-10, with agents keeping 90% of a commission — which is usually 3% of a home's sale price — and giving their firm 10%. 

Oppenheim said the splits at Compass are unsustainably generous, in the ballpark of 90-10, generating too little revenue for the brokerage to function profitably.

Former Compass agents confirmed in a lawsuit they were offered 90-10 splits, and The Wall Street Journal reported that some offer letters allowed brokers to keep 100% of their commissions on the first eight deals.

"If you have a broken business model, it doesn't matter how many agents you have. It's irrelevant. If you are making televisions for $100 a piece, and you're selling them for $99 a piece, it doesn't matter that you're making more televisions, it doesn't fix your business model," Oppenheimer told Inman. 

Compass, meanwhile, told Insider it doesn't anticipate changing its split policies. 

"We are planning our cost structure to be profitable in 2023, even with a 25 percent decline in the market, with no change in our split policy. The market responded very favorably and multiple Wall Street analysts project Compass will be profitable without any change to split policies," a Compass spokesperson said in an emailed statement to Insider.  

In a call with Insider, Oppenheim broke down what he considers a more "sustainable and successful" split. 

"The most successful agents at 80-20, and the newer agents at 60-40. Then most of the agents will be at 70-30," he told Insider. He declined to share the range of splits for his agents at The Oppenheim Group. 

Oppenheim also believes that Compass has dragged down the rest of the industry. 

"There are other brokerages out there offering 90-10 and 85-15 splits because they had to in order to compete with Compass," Oppenheim told Insider. 


Compass is on a mission to cut costs by $320 million after a shaky year 


Compass was founded in 2012 by Robert Reffkin, who had never worked in real estate before, and two other entrepreneurs, Ori Allon and Avi Dorfman. The firm rose to become the top brokerage in the US in sales volume, selling $251 billion in real estate in 2021. But after interest rates went up earlier this year, the real-estate market slowed down dramatically, leaving many agents — and by extention, their brokerages — earning fewer commissions.

Compass, which went public in April 2021, has never turned a profit. It reported a $154 million loss in the third quarter. Its stock price has steadily plunged from $18 the day of the IPO to $2.69 on November 29. Since June, Compass has laid off more than 1,000 people, and executives announced $320 million in cost-cutting. 

A few superagents have fled the brokerage, though Compass touted a 15% increase in its number of agents in the third quarter, saying it employs more than 13,000 agents in total. 

Oppeheim told Insider he currently employs "about 40" agents.

Oppenheim said in his Inman interview that at one point he hoped Compass would "buy me up," but the brokerage said it never responded to his inquiry. 

"Compass doesn't focus on other companies or reality TV, we focus on making our agents more successful," a Compass spokesperson said in an email. "Compass did not respond to Jason's inquiries because he would not have been a culture fit and therefore we did not want to waste his time."

Oppenheim told Insider he's not rooting for the downfall of Compass. "I hope they succeed, but time will tell," he said in a phone interview.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
×