Robert Reffkin’s announcement that Compass was cash-flow positive by the end of the second quarter of the year made headlines across the real estate sector (including here), bringing a positive spin to an otherwise tough earnings quarter for the industry. The Real Deal seemingly wasn’t buying what Reffkin was selling, churning out a feature last week that suggested the company was in part cash-flow positive because it had a stack of unpaid commissions.
And then the comments section erupted.
The story asserts that Compass’ liabilities for commissions payables jumped by $40 million last quarter, which it booked as positive cash flow on its statement. “That’s allowed because it represents cash the company has on hand should it need it—but it’s money the company ultimately owes to its agents…But at the end of the second quarter, Compass owed its agents $97 million, roughly $1 million more than the same time last year, even though revenues fell by 26 percent over that period.”
Upon posting the story on Instagram, the comments began flying on The Real Deal’s page, with dozens of Compass agents coming to the company’s defense.
Selling Sunset’s Maya Vander responded that she gets paid less than 48 hours after closing. “No complaints.” Rafael Murillo, a Chicago-based agent, even called out TRD on fabricating details: “Unpaid commissions? Seriously? I’ve always received my commission within 1-2 days of every closing.”
Other agents (largely Compass but not exclusively) chastised The Real Deal for its dishonest reporting and leading into clickbait for the sake of its own bottom line.
A few commenters backed the article, noting that the real story is simply that Compass’ message around being cash-flow positive should have been more clear to note that $40 million of it’s $51 million in cash will be paid out as commissions.
The Real Deal’s Hiten Samtani even jumped in to defend the outlet, encouraging readers to not fault TRD, instead “take it up with your CFO.”
The original TRD article notes that Compass declined an on-the-record comment for the story.