The Future of Real Estate
The Future of Real Estate
How Agents Are Building Their Business at eXp Realty
Because eXp Realty is Agent-Owned
Because eXp Realty is Agent-Owned
Because eXp Realty Functions in A Cloud Office
Technology and electronic commerce has had an immense impact on the real estate industry. Our cloud-based platform provides
An agent-owned, cloud office environment allows agents coast to coast, to come together to collaborate in many ways
eXp Realty agents and brokers are working together to build businesses:
Our Values Include Collaboration and Learning Together
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The revenue sharing aspect of the eXp Realty business model has drawn a lot of attention, both positive and negative. Critics have been pointing out what they deem as weaknesses in the business model.
There is admittedly, a lot of misunderstanding surround this particular pillar of the compensation model at eXp. It certainly is something that seems new to the real estate industry. Up until now, agents have not had the opportunity to share in the overall revenue of a real estate company.
Keller Williams introduced “profit sharing” to the industry many years ago. Many agents have become familiar with the concept. Is revenue sharing similar? Let’s break it down and talk about some of the misunderstandings and outright misrepresentations that are floating around regarding revenue sharing.
Owners, brokers, and franchisees have been sharing in the revenue of their real estate companies for over 100 years. This is entrepreneurship. Owners put up all the money and take the risks to start and build a company. They deserve it, don’t you think?
There is a distinct difference between Keller William’s profit sharing program and eXp Realty’s revenue sharing program. Profit comes to agents after everything else has been paid. (Including the franchise owner’s, and regional owner’s, and corporate owner’s revenue). It comes monthly, when the local market center makes a profit, and it doesn’t come when the local market doesn’t make a profit. It also doesn’t come if the agent has not done a transaction that particular month. Suffice it to say, profit sharing comes off the bottom.
Revenue sharing comes off the top. Without getting too much into the weeds, (here’s a slide that explains the financial details of revenue sharing) each agent has a $16,000 cap with eXp. Roughly half of that revenue coming into the company is used to actually run the company, and roughly half is given back to the agents in the form of revenue share and stock awards. eXp Realty is NOT a multi-level marketing company.
We’ve been hearing some neigh-sayers lately – revenue sharing is not sustainable. Here’s the dirty secret…it’s been sustainable in the real estate industry for more than 100 years. The first brokerage business was opened circa 1908. Entrepreneurs have been owning brokerages since that time. Why would they do that if there was no revenue? Of course there is revenue for owners of companies.
There are billions of dollars funneling to the top of the traditional real estate company business model. Warren Buffet didn’t go buy a thousand houses during the recent real estate crash. Instead, he bought a bunch of real estate companies. He’s no fool. Ownership is where the money is.
The difference in the eXp Realty revenue sharing model is that the agents are the owners of the company, and as owners, they are sharing in the revenue. As long as eXp Realty is a real estate company and agents are helping buyers and sellers with their real estate transactions, there will be revenue.
eXp Realty is a real estate company, first and foremost. Without real estate agents conducting business, there would be no revenue to share. When any company has ebb and flow of revenue and expenses, they make adjustments.
eXp has done exactly that. From the beginning of the revenue-sharing (2013) in the company, the plan was to adjust the compensation plan when we reached a certain growth marker…16,000 agents. That happened in December 2018, along with the Sustainable Equity Plan and Equity Offset Program. The plan was to maximize growth for a period of time, and then to move towards sustainability.
I marvel at the brilliant minds that put this company together!
As eXp Realty has grown over the last few years, (eXponential growth!) we have made investments in the staff and infrastructure of the company to meet the needs of growth. Although the company has not been profitable yet, our Chief Financial Officer reported at last month’s Shareholder Summit that we will be profitable by the beginning of 2020, given our current trajectory.
Here are corroborating reports from independent analysts:
EXPI is bordering on breakeven, according to the 3 Real Estate analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$8.0m in 2021. EXPI is therefore projected to breakeven around 2 years from now. In order to meet this breakeven date, I calculated the rate at which EXPI must grow year-on-year. It turns out an average annual growth rate of 96% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
EXPI has managed its capital prudently, with debt making up 8.6% of equity. This means that EXPI has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
From Simply Wall Street on June 8, 2019
We feel very confident that our growth will not not only meet expectations but exceed them.
No one can predict the future, but our foundations are good. Our growth has been remarkable in every way.
eXp World Holdings, Inc. (NASDAQ: EXPI) is the holding company for a number of companies most notably eXp Realty. eXp World Holdings has several other verticals already, and more in the making. The main emphasis in the company’s choice in partners is CHOICE for the consumer.
Karen and I have been extremely happy with the revenue share that we have received from eXp Realty. We have been at this company for four years (next month!). Our passive income is now covering our housing costs and our automobile costs. Who says revenue share doesn’t work??!!!
Interested in eXp Realty Maryland…Reach out to us for more of the story! Chris Highland, Cell – 301-401-5119, Broker – 888-860-7369, email@example.com.
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eXp Realty has an amazing award for top producing agents…and it’s not a paper certificate, or even an engraved plaque! It’s worth eminently more. It is worth potential tens of thousands of dollars. This award is called the ICON Award. The eXp Realty ICON Agent Award currently provides each qualified ICON agent with up to… Continue Reading
It’s a new world for your brand and your business, a digital one-screen world. The good news is, you can still apply marketing fundamentals to connect with your customers. Right now, there are more people in the world with mobile subscriptions than there are people who have access to electricity. Isn’t that incredible? The thing… Continue Reading
eXp ranks No. 1 & No. 2 in Transactions & Volume in REAL Trends 500 #1 Top Movers: Transactions #2 Top Movers: Volume #2 Largest Independents #4 Closed Transaction Sides #5 Closed Sales Volume #5 The Billionaires’ Club The REAL Trends 500 Real Trends is a ranking publication for real estate companies in North America. They’ve… Continue Reading
eXp Realty published the quarterly and year-end earnings report. 2018 was a great year in every way! Here’s how the earnings and growth went: Fourth Quarter 2018 Earnings Total revenue for the fourth quarter was $150 million. This was roughly three times the revenue of the fourth quarter of 2017, which was $48.2 million. This… Continue Reading
At eXp Realty we have a unique status called ICON, which comes with some amazing benefits. In most real estate brokerages, the big producers are recognized and rewarded. They bring a lot to the brokerage, both in income and in market share. They also bring that much desired “klout” to a brokerage. Rewards and accolades… Continue Reading
eXp Realty, LLC is a publicly traded company and has been trading on the Nasdaq since May 2018. While several eXp Realty agents, brokers, board, and staff were at the Inman News conference in New York City, they went to visit Nasdaq, and rang the closing bell. What fun! Here’s my Facebook Live video of… Continue Reading
eXp Realty announced today (Jan 18, 2019) that it surpassed 16,000 agents and brokers in North America, which represents an increase of more than 145 percent since the same time last year. Back in 2013 when the company planned the first equity incentives for agents, they had the target of 16,000 agents to mark the… Continue Reading
Why Join eXp Realty?
We do things differently, and we offer much more.
At eXp Realty, The Agent-Owned Cloud Brokerage®, our family of agents and brokers build their own businesses. They work, attend classes, strategize, collaborate, innovate, enjoy water-cooler chats, build teams, build unity and share experiences inside of our Cloud Office Environment.
Together, we’re leveraging Systems and Tools in order to grow an agent and broker-owned international, publicly-traded company.
eXp Realty agents and brokers are working together to build businesses, build and enhance brands, increase profitability, reduce overhead and risk, and achieve bold career and life goals, all while establishing a direct ownership interest in eXp Realty International Corporation as a shareholder and partner.
Here's a perspective from one of the top agents in the country:
“We live in a world of disruption. Companies like Uber and Airbnb are challenging the status quo of some of the most tried and true industries with their unique platforms. eXp’s “cloud-based” real estate brokerage model brings this disruption to the traditional concept of the Real Estate Brokerage by changing how real estate agents are compensated and supported.When you remove the cost of locally owned offices, regional management, and national corporate overhead from the brokerage model it allows that revenue to flow back to you – the agents that created the revenue in the first place.You are probably perfectly happy with your current company. That’s what we all said before we joined eXp Realty. You owe it to yourself and your family to be open-minded enough to examine this opportunity. Then you can decide what’s best for you – but at least you’ll be informed.”~ Jay Kinder
Individually, Jay has established himself as one of the top agents in the world, selling more than 3, 000 homes while capturing 14% market share in Lawton, Oklahoma. In 2007, Jay was named #2 in the World for Coldwell Banker, competing with over 120, 000 realtors – being the youngest to ever obtain this achievement.
About Chris Highland
Chris Highland is the Managing Broker for eXp Realty in Maryland. Chris has over 26 years of experience in residential real estate sales in Central Maryland. Connect with Chris on LinkedIn, Twitter, or Facebook. He is happy to answer any questions about eXp Realty. 301-401-5119. Chris Highland is an independent contractor of eXp Realty and this is not an official release of eXp Realty, its parent eXp World Holdings, Inc. or any related subsidiary.