December 6, 2019

The SoftBank Effect: How $100 Billion Left Workers in a Hole

Compass, which is valued at $6.4 billion, now has 13,000 agents, all contractors, in 238 offices across the United States. It has grown by promising some agents bonuses and 90 percent of the commissions on future deals, in an industry where 70 percent to 80 percent is standard.

The breakneck growth has led to cracks. Several top executives have recently left, as have recently arrived brokers.

One was Tricia Ponicki, 44, who started at a Compass office in Chicago in February. She said she had been drawn by the generous compensation; the company also promised more resources to aid home sales.

But there was so much turnover in Compass’s marketing offices that it took three months to produce a brochure for a house. When she requested a For Sale sign, she was told they were back ordered. Her husband made the sign instead.

“Right from the beginning, I was constantly being misled and misled,” she said.

Over six months with Compass, Ms. Ponicki sold one property, earning $4,300. A year earlier, she had netted around $100,000 selling homes at a local agency.

In August, the mother of four applied for food stamps. She also returned to her old agency, At Properties, where her sales have picked up, she said.

Compass employees and agents have generated less revenue per person than other online brokerage firms and, sometimes, even traditional ones, according to research by Mike DelPrete, an independent real estate strategist and visiting scholar at the University of Colorado.

Article source: https://www.nytimes.com/2019/11/12/technology/softbank-startups.html?emc=rss&partner=rss

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