When Compass agent Jonathan Yuen decided to jump back to Coldwell Banker in early March, he cited the usual reasons agents give when asked about joining firms: better technology, a more familial atmosphere.
Then he made a surprising reveal: When Yuen decided he needed a new work computer, he paid for it himself, not Coldwell.
Yuen’s computer purchase illustrates a dramatic change in recruiting for brokerages. Over the last five years, firms such as Coldwell, Compass, The Agency and others engaged in an arms race for agents, collectively shelling out millions on fat signing bonuses, big commission splits, and sizable marketing budgets.
But in an era in which liquidity is prized above all else, and the deals pipeline is empty, the recruiting wars have changed, and are now absent previous perks.
Both Coldwell and Compass, Los Angeles County’s biggest residential brokerages by sales volume, say they’ve each recruited about a dozen or more agents in the past month. Coldwell Banker told The Real Deal it increased its L.A. County agents’ count 13 percent within the past year. Jamie Duran, Coldwell Banker’s Southern California president, added that the firm attracted dozens of agents in the last four weeks, and that the brokerage currently has 2,028 agents in L.A. County.
Compass, meanwhile, provided a list of 11 Southern California agents they plucked in the past month from rival brokerages including Keller Williams, The Agency, Douglas Elliman, and even Coldwell Banker.
The brokerages demurred on how much it costs to onboard one agent, who are independent contractors and get paid on sales commissions. But other brokers interviewed placed the cost at perhaps $1,000 per agent, maybe less.
“There’s a phone, computer, and maybe minimal set up,” said Stephen Shapiro, chairman and co-founder of Westside Estate Agency.
Both Coldwell and Compass said that when the going gets tough, agents want to affiliate with the biggest industry players.
“We offer stability and premium brand recognition,” Duran said. “Coldwell Banker has a big umbrella and agents and employees just want to be under it.”
Some rival brokers believe the moves could be borne out of restlessness, and a lack of pending sales.
“It’s an absolutely perfect time for agents to move,” said Shapiro. “It’s not like you’re working on four deals right now, and don’t have time to think this through.”
Yuen stressed that even amid the pandemic Coldwell is providing support, noting work marketing and administrative staffers. The agent, who cut his teeth making high six-figure condo sales in downtown L.A., has three-to-four Zoom calls each week with the brokerage’s office manager.
According to Duran, each onboarded Coldwell agent receives perks, citing movie tickets as an example. But many goodies are postponed due to shelter-in-place orders.
The recruits are also joining companies perhaps at a crossroads.
Compass laid off 15 percent of its workforce in March including throughout L.A. County, and the brokerage informed its employees of further payroll cuts earlier this week.
Locally, the financial situation is perhaps better at Coldwell Banker, which has not announced layoffs in Southern California, and paid April rent on its brokerage offices, Duran said.
But Coldwell’s parent, publicly traded Realogy, announced “temporary salary and work week reductions” in a March public filing. And Realogy’s stock is trading at $3.40 per share on the New York Stock Exchange, a decline from $13 as recently as the last week of February.
“I don’t know what the reality is yet,” Shapiro said. “But it’s not great.”