Is Compass Realty A Pyramid Scheme?

real estate

As one of the leading real estate companies in the game right now, Compass realty is under the spotlight within the industry. Potential agents, employees, and customers want to know more about the business and how they make their money, as Compass has seen a great deal of success in a short period of time. 

As Compass realty operates through a commission-based system, it leaves some people asking whether they are a pyramid scheme. However, there are many differences between the way Compass operates and that of a pyramid scheme. Here we will have a look at some of the most prominent differences between Compass and pyramid schemes.

Legitimacy

One of the main points to focus on here is that the way Compass works is perfectly legal. In many parts of the world, pyramid schemes are illegal and frowned upon. Although Compass takes a cut of their agents’ sales commission, this is agreed to and how the majority of real estate companies work all over the world.

Compass has built up a strong reputation in the USA over the past 10 years, which they wouldn’t have been able to if they had been a pyramid scheme, as pyramid schemes are widely seen as unethical and wrong. They are now also the largest independent real estate brokerage in America, which again, wouldn’t be the case if they’d not been legitimate in the work they do.

Employees

When it comes to pyramid schemes, those at the top want as many people to sign up to the scheme, as it usually gives them a pay boost due to hefty signup fees. These are often attached to the promise that once they’re on board they will make money from selling products provided.

Compass, however, states on their website that last year alone over 140,000 prospective agents and employees applied to join their team. Yet, they only actually hired 1%. This highlights that they’re valuing the quality of who they get on board, rather than just looking to grow their numbers. The fact that such a huge number of people want to sign up also speaks volumes – as usually, with pyramid schemes, people need to be coaxed in.

Money, money, money

So, why do all these employees want to sign up to work for Compass? Well surely because they’ve heard good things and seen the success that it has had within the market. A lot of the time, pyramid schemes mostly just bring money in for the few people at the top of the operations. Which once again, is another one of the vast differences to keep in mind. If you work for Compass, you’re getting access to innovative technology to help streamline the selling and buying of homes. This can make agents’ jobs a lot easier.

So, all in all, hopefully, this has answered the question – Compass has many different qualities that make it stand apart from a pyramid scheme. The success they’ve seen is only possible because they were a genuine company.