It’s the holy grail of the residential brokerage world: an agent’s split, gross commission income and marketing budget.
And last Friday, one of New York’s biggest firms saw that privileged information leaked wholesale.
Less than two hours after emails with said information were sent to the Corcoran Group’s agents and staff, the firm shut down its email system while the IT department removed the leaked files from the firm’s server. Agents were warned not to share the highly sensitive attachments — which Corcoran has assured does not contain client information. Over the weekend, CEO Pam Liebman personally contacted the heads of several rival firms, sources said, cautioning them against using the privileged (and allegedly stolen) data.
Corcoran is now investigating what it’s called a criminal incident with the help of law enforcement and a third-party forensic investigator retained by parent company Realogy Holdings. Realogy did not immediately comment on the probe but its outside counsel has contacted several New York firms regarding the leak.
But in the hours and days since, Corcoran’s attempt at damage control has done little to stop agents from sharing what they saw in the emails (even secondhand).
“We’re real estate agents, we’re drama-driven,” said one agent, who spoke on the condition of anonymity. “We’re water cooler talkers.”
Another agent reported some bruised feelings among those who felt they deserved higher splits or marketing allowances based on their performance — even though the firm suggested the emails were doctored.
“We all know it’s accurate,” the agent said.
Regardless, the breach puts Corcoran in a vulnerable position at a time when brokerage firms are competing to attract and retain top-producing agents. In Manhattan, Corcoran is the No. 2 firm with 1,320 agents and $4.53 billion in sell-side deals last year, according to The Real Deal’s most recent firm ranking. And the documents given competitors a better idea of what kind of offer could tip the scales for an agent considering a move.
But in recent years, Corcoran and many other brokerages have lost agents to Compass. In July, Realogy filed a damaging lawsuit accusing the SoftBank-backed brokerage of “predatory” poaching. Earlier this month, Compass said Realogy attempted to sell itself to Compass — a claim Realogy vehemently denied.
Corcoran in 2015 filed a lawsuit accusing Compass of a “multi-front” assault” after 51 of its agents joined the SoftBank-backed brokerage. A Compass job offer was used as evidence in the case, giving a firsthand look at how the brokerage was luring so many agents and managers from competitors.
As of Monday, some of Corcoran’s rivals had taken steps to protect themselves by changing passwords and doubling down on their own security. One CEO said it’s not realistic for Corcoran to retract the information at this point.
“Agents have it, however they have it,” the CEO said. “You can never recover it.”