Compass Continues To Still Lose Money But Managed To Cut Losses In 3rd Quarter. Company Said The Sitzer/Burnett Case IS Not A Concern
Compass executives were positively surprised in the third quarter of 2023. The company lost money again. However, the company grew by 26 basis points year over year. This was an increase of 4.4% in Q3.
The company also increased its agents count by 4% by reaching 14,055 principal agents in Q3. That’s a 4% year-over-year increase of 511 principal agents since Q3 2022. The company also saw a 3% increase of 422 agents in the 3rd quarter compared to the second quarter of 2023.
Additionally, the company posted a 98% principal agent retention rate for the quarter. This is the second-highest retention rate since the company went public in April 2021.However, revenue decreased by 10% year over year to $1.34 billion as transactions declined 12% over the quarter.
In all, Compass reported a net loss of $39 million in the third quarter. This is a significant improvement from a year prior. Last year, Compass lost $154 million.For the second consecutive quarter, Compass achieved its free cash flow goal.
The company also delivered on its objective to cut down operating expenses. Operating expenses decreased to $1.4 billion for the quarter compared to $1.6 billion a year ago.
The Sitzer/Burnett Ruling Won’t Affect On Compass
Plaintiffs did not name Compass as a defendant in the landmark Sitzer/Burnett real estate case. However, plaintiffs did name them as a defendant in the so-called Gibson case. The company says they feels confident that Compass is well positioned and prepared to overcome the legal challenges.
The company’s agents are more likely to work in upper-echelon markets where buyers and sellers would work with agents, he said. Compass also requires their agents to ensure buy-side clients sign buyer-broker agreements.
At the end of 2022, the average Washington Realtor commission rate was 5.30%. The commission rate was split 2.67% going to the listing agent and the remaining 2.63% going to the buyer’s agent. This aligned with the national average.
This Article Originally Appeared On LenderMeltdown.com