EXP Realty Revenue Share – Is it Sustainable?

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.

Revenue Sharing is Not New to the Real Estate Industry

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.

Is Revenue Sharing Sustainable?

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!

How eXp Realty Revenue Share Works

Revenue Share expands to 7 levels of agents…you sponsor and agent, they sponsor an agent, who sponsors an agent….all the way to seven levels. It is just like getting a referral check from the company each time one of those agents get paid on a transaction. IMPORTANT NOTE: we don’t get a portion of the agent’s commission, we get a portion of the company revenue from that transaction.

Each level, or tier, has a different percentage of referral pay. Each five producing agents that you sponsor open a bonus amount on the next tier:

What About eXp Realty and Profitability?

UPDATE 2023

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 was not profitable until 2020, we have been since that time…and we have no debt as a company. This fact sets eXp Realty apart from any other company of its kind.

According to the 2022 RealTrends 500 Report, eXp ranks Number One in the following categories:

Independent in the U.S.
Mover in Transactions
Mover in 5-Year Sales Volume Percentage

Recent Financial Reports:

2020:

The company exceeded revenue of $1 billion in the second quarter, a new record. There were triple-digit percent gains in revenue (183%), gross profit (133%), earnings per share (300%), operating cash (185%), and net income (350%), as well. We saw an increase in agents of 87% since this time last year.
Not only did we have an increase in agent count, it is clear that agents are doing more business, as all the triple-digit statistics show. Residential and commercial transactions increased 164%, and sales volume increased 210%.

2021:

eXp World Holdings Reports Record Full-Year 2021 Revenue of $3.8 Billion. 2021 Marks Highest Revenue and Profit Year in Company History, Driven by a 72% Increase in Agent Growth
Company Declares Cash Dividend for Q1 2022 of $0.04 per Share of Common Stock
eXp Realty Recognized as No. 1 Growth Leader in Year-Over-Year Sales Volume, Transaction Sides and Agent Count by T3 Sixty’s 2022 Real Estate Almanac
eXp Realty Named No. 1 Independent, No. 1 Mover in Transactions, No. 1 Mover in 5-Year Sales Volume Percentage in 2022 RealTrends 500 Report

2022: Revenue Share and Equity Paid to Agents and Brokers Continues To Increase Year-over-Year

Revenue share to agents increased 20% to $202 million in 2022.
eXp Realty distributed more profit/revenue share benefits last year to agents and brokers than any other real estate brokerage model or platform.
As part of our agent equity program, eXp World Holdings issued over 2.5 million EXPI shares to eXp Realty agents and brokers valued at more than $42.5 million.
RISMedia 2023 Power Brokers Report: eXp Realty landed No. 1 in transactions. This is the fourth straight year eXp Realty has ranked among the top five brokerages in the country. In addition to its No. 1 ranking in sides, eXp Realty ranked No. 4 for residential home sales in the United States.
T3 Sixty’s 2023 Real Estate Almanac: eXp Realty ranked No. 4 among the nation’s largest brokerages based on sales volume. Out of the five brokerages mentioned, eXp Realty had the highest year-over-year sales volume (20.2%) and the most transaction sides (397,138) in results for 2022.

We feel very confident in our company growth, even while the market is contracting somewhat.

No one can predict the future, but our foundations are good. Our growth has been remarkable in every way.

Other Revenue Streams for eXp World Holdings

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.

eXp Realty Technology – VirBELA offers a modern, cloud-based environment focused on education and team development with clients in various industries from government to retail. VirBELA developed eXp Realty’s current cloud campus, which provides 24/7 access to collaborative tools, training and socialization for the company’s agents and staff.
Our technology holdings also include the ShowMeNow app, home tour app that enables home shoppers to request immediate access to properties they are interested in.
eXp Realty Affiliated Partners – eXp World Holdings is adding affiliated partners like Introlend First Cloud, a lending platform in which eXp agents can opt to become shareholders and earn dividends.
eXp Realty has added several service partners, like America’s Preferred Home Warranty, a platform that allows consumers to select their own service provider.
Moving Hub, a service to help buyers and sellers connect with moving services.
The future holds a lot of promise for Title partnerships, Insurance partnerships, a tax service, 360 photo and floor plan company, a currency exchange company (international buyers)…and who knows what else? In another year, our Director of Affiliate Services, Ted Laatz, surmises we’ll have a dozen partnerships.
All of these partnerships and services will add to the company’s revenue. It’s a bright future for eXp World Holdings!

Our Revenue Sharing Story

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 almost eight years. 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, chris@chrishighland.com, Broker – 888-860-7369.

Disclaimer *Revenue Share and Stock is not guaranteed, it is based on your efforts. Participants who are sharing the eXp opportunity with prospective agents are asked to include the information on this web page including the disclaimer below that provides context for earning income with exp Realty:

“These figures are not a guarantee, representation or projection of earnings or profits you can or should expect. They also do not include expenses incurred by Agents in operating their businesses. eXp Realty makes no guarantee of financial success. Success with exp Realty results only from successful sales efforts, which require hard work, diligence, skill, persistence, competence, and leadership. Your success will depend upon how well you exercise these qualities.”