Countdown to April Fool's Day or lawsuits: Are real estate teams time bombs?

BW Bill Wendel Public Seen by 288

Jack Barry, responding to the question in your tweet. Here's a link to learn more about Compass:


In December 2017, HousingWire reported that Compass has raised $775 million from a single investment fund raising their valuation to $2.2 billion. According to Inman News, their goal is capture "20 percent of the market share in the 20 largest U.S. cities by 2020 ... their so-called “2020 by 2020” plan. (No relationship to #RE2020).

What should trouble real estate regulators is that Compass' CEO predictions "Teams will eat real estate brokerages;" meanwhile, Compass is not just poaching star brokers but entire teams are leaving rivals to join Compass.

In July 2015, Brad Inman wrote "Keller Williams has had a monopoly on the team concept of peddling real estate. Not anymore, all major brokers and franchises are noodling with and rolling out their version of the team strategy." Have regulators wrestled with the agency implications yet?

One continuing education real estate instructor notes that "Agent teams that think they are their own company" but "teams cannot advertise without mentioning brokerage." She goes on to explain why teams are a conflict of interest within a conflict of interest. Whether working with a buyer client, seller or both:

“The Entire team represents those buyers and the entire team represents those sellers, you cannot do a designated agency within a team. The entire team is the designated buyer agent and the entire team is the designated seller agent."

That oxymoronic statement turns buyers, sellers and real estate professionals into fools, and raises serious questions that need to be investigated:

  1. What implications might that have on inventory?

  2. What implications might that have on pocket listings and in-house sales?

  3. What implications on bidding wars, particularly offers with escalation clauses?

  4. What happens when multiple buyers represented by the team are interested in the same listing, particularly pocket listings?

Time bomb?