New York City-based brokerages chalked last quarter’s earnings up to a win.
Following two years of lackluster performance, Douglas Elliman, led by a new CEO, cut down significantly on its losses, grew its revenue and finished the period with a healthy cash store. Compass, fresh off the closing of a major acquisition, expanded its market share and logged a record free cash flow.
But under the headline-catching numbers, the firms also notched marginal gains in a lesser-known metric: commission expenses as a percentage of revenue. Elliman shrunk its share from 74.4 percent in the first quarter of 2024 to 73.6 in the same period in 2025, while Compass’ saw a smaller dip from 81.8 percent to 81.6 percent.
The improvement was slight, if negligible for Compass’ part, but the metric is an especially interesting one as it relates to a brokerage’s business model. Commission splits between agents and brokerages vary across markets, with regions like South Florida and parts of Texas commanding higher splits than New York City and other areas.
For the last two years, many brokerages invested heavily in drumming up business in those high-opportunity regions, which were at the time outpacing the city — a move that helped sustain revenue totals but also meant firms couldn’t keep as much of the income.
When picking apart Elliman’s earnings last year, a financial expert pointed to the firm’s reliance on South Florida, Texas and other Western regions as a potential impediment to restoring profitability. The expert raised concerns that revenue gains in those regions may not have been enough to offset the steep payouts to agents.
Now, with transactions in New York City picking up, the firm is holding on to a bigger portion of the income from deals, and that number could go higher if sales in the area continue to rise.
But agents on the whole earn smaller splits in a market like New York City compared to other markets, even those with big-ticket prices. Is it just the city’s history of stiff competition that keeps a lid on commissions? Could the national push toward negotiation rates move the needle? Send your thoughts to sheridan.wall@therealdeal.com.
Not so fast…
Weeks after announcing a crackdown on private exclusive listings, Zillow is rolling out its enforcement plans.
Starting June 30, the platform will begin taking action against agents who violate their new policies, which include banning the public marketing of listings that aren’t on the Multiple Listing Service.
The firm will start alerting agents whose listings aren’t in compliance by May 28 and will begin preventing brokers from posting listings that violate its rules after a third warning.
Those listings will not be allowed on the platform for the duration of the agreement between the broker and the seller, so even if the seller decides they want to market their homes to a wider audience, that agent won’t be permitted to do so on Zillow.
But StreetEasy, Zillow’s New York and New Jersey-based subsidiary, is taking its consequences one step further. The platform said earlier this month that it would ban agents who violate its listing rules from participating in premium programs like StreetEasy Experts — a lead diversion network that props up some agents’ business in the city.
StreetEasy’s rules also differ slightly from Zillow’s. Instead of the MLS, the platform’s policies state that a broker must post a listing to StreetEasy within one business day of publicly marketing it.
The platforms’ policies aren’t an all-out ban on private exclusive listings, as they say they’ll still allow office exclusives if a seller opts to go that route.
But the new standards each include a provision aimed at barring agents from “publicly marketing that exclusive listings are available if a buyer is willing to work with a specific agent or brokerage.”
It’s unclear how exactly that rule applies to listings themselves and not agents or brokerages as a whole. For example, Compass, which has been at the forefront of the campaign to keep listings in house, has a line on its website advertising “access to private listings before the competition.”
“Discover properties that are not publicly advertised — a critical advantage in an inventory-constrained market,” Compass’ website reads.
CEO, Robert Reffkin has previously emphasized that his company’s optional marketing strategy, which includes offering listings first as private exclusives before publicly marketing them on the MLS or third-party aggregators, doesn’t violate the platforms’ rules.
NYC Deal of the Week
A condo at 220 Central Park South was the most expensive deal to hit the city register this week. Unit 44B closed for $36.5 million, or roughly $12,000 (!) per square foot, in what appears to be an off-market deal.
Read more
Big gains and bigger plans: How resi brokerages stacked up in the first quarter
Zillow zeroes in on private exclusive policy
Manhattan’s high-end market hit a hot streak in Q1