UPDATED, 12:30 p.m., Feb 24: Side is exploring changing its financial arrangements with its agent teams, The Real Deal has learned.
In an all-hands Zoom meeting on Feb. 21, the venture-backed white-label brokerage said it is exploring changing commission splits for some agents, as well as modifying its liability insurance fees, according to two sources.
A Side representative declined to comment on its financial arrangements with agents, though she said, “wow, a lot of the info you’ve been told is way off.”
Side doesn’t have a “one size fits all” commission split with the agents it works with, though co-founder Guy Gal said in 2020 that all agents were on a 90-10 split. According to an agent present at the Tuesday meeting, some agents may now be required to cough up more of their splits.
In the past, Side has reportedly required agents to pay splits until they reach a cap. There is talk that the cap may be lifted, though TRD could not get more details.
Side may also modify the fees it charges for errors and omissions, a form of liability insurance. By April, teams will be responsible for paying $100 per month for each of its agents. Previously, some teams paid a flat $1,000 in annual E&O fees.
Since the real estate market slowdown of 2022, many brokerages have switched up their business models to drive profitability. Major players including Anywhere Real Estate and Compass have spoken of revising commission splits.
Also, brokerages have trimmed their payrolls, including Side, which laid off employees in October.
The all-hands meeting and new financial relationships come soon after Side’s annual convention, held in Long Beach, which featured a cameo by NBA legend Magic Johnson.
Correction: A previous version of the story incorrectly stated that some Side teams paid a flat $1,000 for liability insurance every month. In fact, some Side teams paid $1,000 annually in errors and omissions fees.
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In January, Side announced that it hired its new president Stephen Capezza to drive national growth . Over the summer, the company picked up one of the nation’s top brokerage teams, run by Tal and Oren Alexander.
Side raised its last funding round during the venture-capital boom in 2021, at a valuation of $2.5 billion.