Propmodo Daily

By Franco Faraudo · May 10, 2024

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Green roofs, while not a new concept, are becoming a popular feature in modern buildings. They help reduce the urban heat island effect, manage stormwater runoff, improve air quality, increase biodiversity, and extend roof lifespans. In a new article, we explore how regulations, incentives, and new technologies are encouraging developers to make green roofs a staple of their Class A projects.

In today's email, Compass CEO Robert Reffkin offers a surprising perspective on the recent NAR settlement. He believes the media has overblown the impact and points to rising commissions and consistent buyer agent payments as evidence.

This week in Propmodo Technology, we explore how tech is driving the rise of flexible office spaces. Solutions like phone booths and modular meeting rooms offer quick adaptability to changing work needs. Large office owners are embracing tech-enabled co-working and flex spaces to support hybrid work. And we'll investigate why an on-demand 'Class Pass' model for office access hasn't worked out yet.

Be sure to participate in today’s commission poll, and we’ll share the results Monday.

Now, let's dig in!

NAR Settlement Won't Impact Commissions, Says Compass CEO

There has been wide speculation about the impact of the recent settlement of commission split lawsuits. The new rules require buyer's agents to negotiate commissions directly rather than having them dictated by the seller's agent. This change could lead to a price war and empower buyers to secure better deals on commissions, right?

Compass CEO Robert Reffkin disagrees. During the company's recent earnings call, he argued that commissions are unlikely to change. He first pointed out that commissions are already on the rise: "Commissions were 5.5% in 2023, compared to 5.1% just 20 years earlier in 2003."

Reffkin further bolstered his point by citing developments since the settlement's announcement in March. "More than 99% of new listings since March included offers to pay the buyer agent. Additionally, over 96% of listings included offers to pay 2% or more, with over 67% offering to pay 2.5% or more," he stated.

By and large, Compass agents also have not seen any change in commissions since the settlement. The difference between the perception and reality of the impact of the rule changes is caused by all of the media coverage around it, according to Reffkin, “We believe the sensational press has caused significantly more reaction than what we expect to see from the actual rulebook changes.”

Reffkin explained that real estate agents are in charge of a rather complicated process and that most people are happy to pay for it. “If saving money on commissions was the most important thing to a seller, the majority of home sales would be for sale by the owner. Obviously, that is not the case,” he said. For sale by owner represented around seven percent of all transactions in 2023 (down from ten percent in 2022). According to the NAR, in half of all the for-sale-by-owner transactions, the seller already knew the buyer prior to listing the property.

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