Choosing a brokerage most suitable for you as a realtor is essential, especially at the beginning of your career.
So, in this context, you might have already heard about the cloud-based brokerage called eXp Realty, and you’re now a bit on the fence about starting with them or changing your current one.
Therefore, I wrote this article covering several vital aspects of eXp Realty, focusing on their partially controversial business model.
Besides their business model, which I cover more in-depth, you will learn about what eXp Realty is, how it started, what their commission split is if they provide you with leads, how long it takes to join them, how realtors make money with them, and the reasons why realtors leave this brokerage.
Sounds interesting, so please keep reading.
What Is eXp Realty?
eXp Realty is part of eXp World Holdings Inc., an agent-owned cloud-based brokerage.
About 60,000 agents form part of the organization, now across the world.
It also offers its agents the option to become a shareholder and provides – in their words – a generous commission structure.
How much stock you get as an agent depends on your performance, such as closing your first transaction.
As an agent, you also don’t have to pay any desk or royalty fees, and you can keep between 80% and 100% of your commissions (source).
Don’t worry. I will get further into their business model and commission structure below.
Besides eXp Realty, eXp World Holdings Inc. owns three other businesses: Virbela, SUCCESS Enterprises, and Showcase IDX.
Virbela has everything to do with virtual and remote collaboration. As a user, you can host virtual events, hold classes, meet, and work with your virtual team.
The difference to other solutions is that this all can be done in an immersive 3D world.
SUCCESS Enterprises is an entire media business with different media or marketing channels.
Part of it is the magazine SUCCESS and the website SUCCESS.com.
I looked into this further, and from what I found, SUCCESS covers print content marketing with its magazine, digital content marketing with the website or blog articles, audio content marketing with its podcast, and video content marketing with its YouTube channel.
So, overall, their focus is clearly on content marketing, but across several different channels at once.
The third business is Showcase IDX.
You might have read about this one on my blog in various articles about IDX.
My article about integrating your MLS into a WordPress website is especially relevant.
ShowcaseIDX is a premium WordPress Plugin that helps you to integrate your MLS via IDX into your WordPress-based real estate website.
When Did eXp Realty Begin?
The founder Glenn Sanford started with eXp Realty in 2009 when the real estate market implosion was fresh.
Before succeeding with eXp Realty, he led nationwide real estate teams at Keller Williams.
The economic downturn of 2009 impacted his business and team considerably, but he used this crisis to reconsider the real estate brokerage business model.
The consequence of this critical analysis was the foundation of eXp Realty.
eXp Realty’s Business Model at a Glance
By now, you might ask yourself what eXp Realty’s business model is.
When discussing business models, we must ask what elements they include.
And in my opinion, the best structure is provided by a system in a book called “The Business Model Canvas.”
Based on the structure provided by this book, I will answer the question about eXp Realty’s Business Model.
By the way, by reading this section of my article and buying and reading this book, you might even get inspired in such a way that you will be the next one innovating a real estate business model.
Because the book does a great job of showing you how you can innovate different elements of a business model.
The Value Proposition (What Makes eXp Different?)
The value proposition is at the core of the business model canvas, from which all other elements derive.
eXp Realty’s value proposition is the following, according to their website:
“eXp offers a highly competitive compensation package, a unique cloud-based model, and a tremendous global community of agents who collaborate together.
Layer all of this with state-of-the-art technology, forward-thinking leadership, mentorship, training, and networking, and an eXp agent’s success is only limited by their own choices.
eXp Realty’s agent value proposition is about compensation, community and it’s cloud-based.
That’s why it’s the most agent-centric brokerage in the world. “
The key difference to the traditional brokerage that generates value for their main clients (the agents) is their generous commission structure, further compensations, and their cloud-based virtual approach with no physical offices and no franchising approach.
Customer Segments (Audience)
Based on the value proposition, we can clearly identify their audience or customer segments: agents, real estate buyers, and sellers.
Customer Relationships
From my research, I could also identify several ways they establish and maintain their customer relationships.
It combines dedicated personal assistance, self-service, automated service, and communities.
Their sister business Virbela realizes the latter, where the whole teamwork can be done remotely in a virtual 3D environment.
Also, their other sister business – Showcase IDX – provides their agents a great start with a complete WordPress-based real estate website, including the MLS IDX integration via Showcase IDX (source).
Channels
We must answer how the primary audience wants to be reached regarding channels.
I highly assume that eXp Realty reaches its main audience (real estate agents) via word-of-mouth and networking and less through direct advertising campaigns.
I guess it started with the founder being well-connected with Keller Williams and other agents from there.
Revenue Streams
eXp Realty’s main revenue streams come from commission splits (20%) capped at $16,000. Everything above is 100% for the agent.
The next streams are different one-time, monthly, and transaction-based fixed fees, such as a $149 start-up fee, an $85 per month cloud brokerage fee, a $25 broker review fee per transaction, and a $40 risk management fee per transaction.
Key Partners
The only key partner I could identify that was publicly available is Shareworks. Other key partners eXp works with stay undisclosed for strategic reasons.
Further Undisclosed Elements of the Business Model Canvas
Other business model canvas elements include:
- Key partners and business boosters (e.g., unfair advantages, etc.).
- Key activities.
- Key resources.
- The cost structure (derived from the abovementioned elements).
These are elements linked to the inner workings and what goes on behind the scenes.
When it comes to these elements, I understandably don’t have and shouldn’t have access to them, as well as the competitors.
It’s the whole left side of the business model canvas, which you can look at here.
What Is eXp Realty’s Commission Split?
You might also wonder what the eXp Realty commission split is by now, and I mentioned it already in passing.
As a real estate agent with eXp Realty, you receive 80% of the total commission, and 20% goes to eXp Realty.
Once you reach the gross commission amount of $16,000, anything above belongs 100% to the agent.
You still need to pay the transaction-based fixed fees, which are the $25 broker review fee and the $40 risk management fee (source).
Does eXp Realty Provide Leads?
The question of whether eXp Realty provides leads to agents was particularly interesting to me, to see if they provide their agents with real estate lead generation services or solutions.
eXp Realty doesn’t provide enough leads to make a real estate agent’s business feasible if counting only on this one source.
How many leads you get depends on the number of agents that share the same local market.
It’s more like the example of the man who learns to fish instead of the man who gets fish without doing anything.
With eXp Realty, you get access to the kvCore platform, a real estate CRM solution focused on lead nurturing through different communication channels (e.g., email drip campaigns, direct mailing via postcards, etc.).
During my research, I couldn’t find anything that indicates that this platform would generate massive quantities of new leads.
But you get over 50 hours of weekly live training and access to a “how-to” video library.
So, I wouldn’t count on eXp Realty providing you with many leads. The main lead generation part would be on you.
Interestingly, I expected more lead generation services for their agents since their sister business (SUCCESS) is a media company that relies heavily on content marketing across different marketing and communication channels (e.g., articles, audio, and video).
I am unsure why they wouldn’t exploit this for real estate lead generation.
How Long Does It Take to Join eXp Realty?
It can take between 2-5 business days to join eXp Realty. The average is about two business days.
Why can’t you join immediately?
The reason why you can’t join immediately is their vetting and onboarding process for new real estate agents, which consists of the following steps (source):
- You send your eXp Realty Join Application here.
- Signing the eXp Realty Independent Contractor Agreement
- Signing the eXp Realty Independent Contractor Agreement by eXp’s internal team
- You transfer your license.
- You set up all of eXp Realty’s systems and tools.
- You are a new real estate agent with eXp Realty.
The 3 Ways You Can Earn Money with eXp Realty as a Realtor [Includes the Market Differentiator]
With eXp Realty, you can make money in three ways as a realtor:
- Earning a commission by selling real estate (the obvious one)
- Getting a revenue share
- Becoming a shareholder
1) Earning Commissions
I won’t get too deep into the first one since it’s pretty obvious.
You will get a commission based on the transaction when you sell real estate as a realtor.
As mentioned earlier, the commission split is 80/20 with a cap of $16,000.
Everything over $16,000 belongs 100% to the agent for the remainder of the
anniversary year.
2) Revenue Share
The second way to make money is to receive a revenue share for the real estate agents you bring on.
In this case, you will receive revenue on their first transaction and additionally a residual income of up to $2,800 per productive agent that is part of your team.
It doesn’t stop there – you will also receive a revenue share for further agents these new agents bring, in turn, to your team.
In this respect, eXp Realty resembles a bit of a network marketing or MLM scheme.
If the company would only do that and you would also have to buy a certain amount of products or services to get in, the term would have its merits.
3) Become a Shareholder (Equity Opportunities)
The third way to make money with eXp Realty is to become a shareholder.
Once you have your first successful real estate transaction and achieve certain goals, you will get company shares.
eXp has structured this Agent Equity Program so that you can earn awards depending on your achievements.
The company offers three equity programs: the Agent Growth Incentive Program, the ICON Agent Award, and the Agent Equity Program.
It’s a motivational measure, and when you, as an agent, are enrolled in this program, you are paid a percentage of your commission in stock shares at a discounted rate.
Currently, the Agent Growth Incentive program is structured the following way: you can earn shares…
- On your first (full unit) transaction in an anniversary year
- When you fully cap during your anniversary year
- When an agent you sponsor closes the first transaction
To become an ICON Agent and earn the ICON Agent Award, you must achieve particular production and cultural goals within your capping period.
In that case, you will earn ICON stock awards.
And finally, you can enroll in the Agent Equity Program. In that case, you can be paid 5% of every transaction commission with EXPI stocks at a 10% discount.
To manage the equity compensation eXp offers its agents, the company partnered with Shareworks.
This company is part of Morgan Stanley, offering equity compensation solutions.
They aim to attract and retain talent.
Why Do People Leave eXp Realty?
To avoid having an overall rosy and rainbowy article, I also want to mention what I found out about why people leave eXp Realty.
There are common reasons why agents leave brokerages, such as the usual going out of business (87% of agents fail in the first three years, source), recruitment by other brokers, and too high expectations.
But I also wanted to know why some left eXp Realty specifically.
The above reasons are the rather generic reasons agents leave brokerages.
I researched further and found an interesting Reddit thread where some agents reported their experiences.
Please take the reports with a grain of salt since it’s only anecdotal and subjective evidence, not empirical statistics.
Opinion 1:
“Here’s the truth – Revenue share is a fucking joke.
It’s pathetically low. I’ve peeked behind the curtain at the 1% recruiters at exp and they aren’t making insane amounts of money.
The 1% of the 1% are (Brent Gove, Gene Frederick, and a few others), but most aren’t making shit.
I think it’s a good model for a very specific type of agent. One who is independent and a self-starter, but with no systems.
Honestly, the fees are a big reason we left. Little piddly fees are annoying to agents.”
Opinion 2:
“I left because it took them six weeks to track down my commission check and then just stopped answering my emails.
I couldn’t call anyone because even my broker didn’t have a phone number available.
I had to go into their stupid virtual world to get answers from someone who eventually called me. Six. Weeks. Later.”
Opinion 3:
“Being a closing agent, my experience with them is that they look to cut a lot of corners. I have been in very uncomfortable situations twice at different EXP offices when a closing is going sideways.
They have tried to bully me into passing out checks when the transaction wasn’t complete.”
Summarized from the three non-representative negative experiences, you could say that they mainly left because of wrong expectations (e.g., too low revenue shares), the fixed monthly fees, and sub-optimal transaction communication in some cases.
This article has been reviewed by our editorial team. It has been approved for publication in accordance with our editorial policy.
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