When I began as a real estate agent, I loved being part of a team. I got to help others find their dream homes, be part of the transaction, and help them move into new houses. It was a great experience. But after a few years, I saw a change in how the industry operated.
It’s always easy to read why real estate agents leave one brokerage for another. There are many reasons, including better pay, better training, and better perks. But finding these reasons is one thing, but making the switch is another.
I’ve been in real estate since Clinton was in office, and I had a successful career with KW – in fact I have awards from them as the top luxury listing agent in my office and was even Recruiter of the Year for the entire country, but I chose to leave Keller Williams for eXp Realty. Here’s why I had to make this move and why it was the right choice.
Keller Williams’ Profit Share vs. eXp Realty’s Revenue Share
Keller Williams and eXp Realty offer residual income to agents who help the company grow. The significant difference is that eXp Realty offers revenue sharing, while Keller Williams Realty offers profit sharing.
But here’s the critical question: what is the real difference, and why does it matter?
The Keller Williams Profit Share Model
You may have heard about their profit-sharing model. It’s a powerful way to incentivize and reward agents, but it has the potential to change the way the real estate business works. Here’s the takeaway about the Keller Williams Profit Share Model.
About 48% of the Market Center’s profit gets divided via the Keller Williams Profit Share System. For each agent you recruit, you’ll receive a portion of the revenue they generate for Keller Williams, equalling 50% of that revenue. You will receive 10% of your agents’ revenues when they reach level 2 and become sponsors.
A seven-level sponsorship program provides agents a part of a market center’s profit depending on the sponsored agent’s production with the market center’s company dollars.
Agents and owners share in the profits of a market center (brokerage), which then get distributed to both parties. Based on the agent’s production and the seven-level profit share tree, the company receives the percentage it shares with its real estate agents.
Your part of the revenues increases as you refer more customers to Keller Williams. The best thing is that you are fully invested after three years and can continue to benefit from the gains.
The Keller Williams profit share system has two shortcomings:
- First, because compensation depends on profit rather than revenue, you receive less per transaction whenever you sponsor an agent.
- Second, no market center is guaranteed to make money because they are all operated individually. If the market center is unprofitable, there are various situations where a sponsor may not get any profit share for a sponsored agent.
eXp Realty’s Revenue Share Model
In the eXp revenue share model, you get paid when an agent you sponsor, or is in your revshare organization, closes a deal, until they cap because you are getting paid from the company’s share – NOT the agents.
A portion of the money agents make when they bring in an agent who brings in the capital is known as the eXp Realty Revenue Share. The company splits all commissions with eXp Realty agents 80/20. A portion of the company’s 20% goes back to the agent who sponsored them when an agent closes a sale.
Real estate agents are notoriously busy. They must constantly be on the go to get listings and showings and manage their clients. The eXp Realty Revenue Share Model helps agents get more done and can help you, too.
Benefits of eXp Realty’s Revenue Share
When you’re an agent, it’s easy to get caught up in the day-to-day grind and forget that you’re in a business to make money. From advertising to marketing, you’re responsible for any expenses and, generally, don’t see any of the revenue until you close the deal. eXp Realty’s Revenue Share program lets agents keep more of the money they make.
— Diversified Income Streams
Every broker and real estate agent knows that there are bad months. Sometimes, you may even have to go for weeks without making any money.
Revenue Share improves the good months by helping balance out the bad ones. The opportunity to diversify income streams is a critical factor that makes eXp Realty Revenue Share so crucial for those of us in the real estate industry.
— Transition Plan
Real estate agents must understand the value of revenue share. Most agents work for decades with little to show for it since they spend all their commissions on everyday expenses.
A real estate agent will continue to get money from the Revenue Share program even if they opt to stop selling homes as long as they keep their license active with eXp.
An agent receives a portion of the new agent’s commission when they sponsor another agent.
With Keller Williams, this proportion depends on the profit from the agent’s business center, after overhead costs.
In the case of eXp Realty, the proportion depends on revenue before overhead costs. Multiplying the gross commission income by the agreed-upon percentage gives the fixed ratio that makes up the revenue share.
Both companies have a seven-level structure. You receive a part of the commissions from the agents you sponsor and the agents they, in turn, sponsor down a total of seven tiers.
High Touch, High Tech
Most franchises hire regional managers to help expand across the nation’s various regions.
Afterward, regional managers sell the franchise to individual brokers, who open an agency. Then the brokers hire a manager, a team leader, and an office manager. It is the office manager’s job to employ agents. Add in a receptionist and office space and you’ve got monster overhead from day one. When I sold my Century 21 offices – 6 weeks before the market crashed in 2007 – my overhead was $75,000 a month – before I took a penny in salary. It was horrible.
Because eXp was founded by a Tech Genusu who also happened to be a successful Realtor, eXp Realty eliminates many of these processes, thereby reducing expenses.
Modern Real Estate Technology
eXp Realty offers more than just a place to work. When you join eXp Realty, you also have access to many tools to help you with your daily tasks. What are some of these tools?
- eXp World
- Over 50 hours a week of live training classes anywhere you have an internet connection
- Healthcare – I saved over $3,000 a year and have the best coverage I’ve had since I got into real estate
- Local, regional, and global live events with speakers like Tony Robbins and Tom Hopkins
- eXp agent recruiting website
- Regus Membership
- Free Contact Management System on KvCore
- 1,000 business cards for free
- Kunversion IDX website for free
- eXp-branded Google Apps, YouTube, storage, email, and Hangout for free
- Skyslope Transaction Management Platform
- Free Commercial Certification Classes
- Free REO and Relocation Classes
eXp Realty Online Campus and Training
eXp provides online training options that use cutting-edge technology.
Does it take a great deal of work to become a top agent? What do you do to get to the top? How do you earn your real estate broker’s license, and what training do you need to succeed in this insanely competitive industry?
Each week, agents receive live instruction for more than 50 hours. Most training is done by top realtors all around the globe – not has-beens.
There is also an online campus on eXp World that is designed like a college campus. Top instructors from around the world teach several classes per day. You can also ask any questions you have. It’s similar to being in a lecture hall but you’re always looking your best!
Office and Desk Fees
The need for physical offices is one of the critical distinctions between Keller Williams and eXp Realty.
To conduct business at Keller Williams, agents often travel to and from their physical offices, where they receive the majority of training and assistance.
For an extra monthly fee, they can acquire private office space. Agents at Keller Williams may have to pay up to $500 a month to have a personal office within the brokerage. This cost has no cap as it could run into thousands of dollars per month in higher-priced markets.
eXp’s cloud-based system eliminates the need for brick-and-mortar offices. Agents at eXp Realty can work from the comfort of their homes. But, they have shared workplaces accessible through their Regus memberships, which provide them access to over 3000 sites across 900 cities.
Regus offers private offices that agents can hire for $30 to $50 per hour to meet with clients or conduct business. Because eXp agents already have access to the membership through eXp Realty, they can acquire private offices from Regus at a discounted price.
Being given stock for the things you’re already doing as an agent is one of my favorite aspects of working for eXp Realty. Since Keller Williams is not a publicly traded corporation, this represents a significant shift from its business strategy.
The NASDAQ-listed company, EXPI is our ticker, grants agents and brokers shareholding in the business to achieve specific production and targets. Agents gradually increase their ownership of EXPI stock as they begin to compile a portfolio that may be sold and used for various purposes, including retirement, in the future.
One of the many advantages of working as an eXp Realty agent or broker is the ability to purchase stock in three distinct methods while doing regular real estate transactions.
Below is a rundown of the three stock ownership options available to eXp agents.
The Sustainable Equity Plan
eXp agents who achieve particular objectives each year are given stock awards under the Sustainable Equity Plan (also known as eXp Realty Stock Awards). You can obtain EXPI stock shares by:
- Closing on the $200 worth of EXPI shares you buy each year.
- Reaching or surpassing your yearly commission cap ($400 in EXPI stock).
- Referring or sponsoring an agent. They can earn $400 worth of EXPI stock when they sell their first house using eXp.
To be eligible for the award, the agents you endorse must also receive employment from the agency at the time of vesting. Also, the vesting term for these eXp Realty stock awards is three years, but you can track the progress of all your achievements in the organization.
The ICON Agent Award Program
The ICON Agent Award is given annually to an eXp Realty agent who sells real estate at a high level, as measured by transaction volume or gross commission revenue.
Agents may obtain the yearly cap (up to $16,000) in the form of EXPI stock if they achieve specific production conditions.
To qualify for the ICON Agent Stock Award, you must fulfill one of the requirements listed below during your anniversary year:
- You sell twenty more houses in the year of your anniversary after reaching your yearly commission quota and pay the capped transaction fees.
- You must close a minimum of 10 transactions, make $500,000 in gross commissions yearly, and pay the equivalent of the ICON eligibility fee.
You can learn more about qualifying for ICON status if you have any questions.
The Agent Equity Program
Participation in the eXp Stock Purchase Plan (also known as the Agent Equity Program) is another opportunity for eXp Realty agents to acquire ownership in their brokerage. When agents agree to have eXp retain 5% of the commission earned from the agent’s transaction, eXp will give them a discount of 10% on EXPI stock.
The EXPI stock’s closing market value on the month’s final trading day gets used to calculate the share price. The issuance date is also today.
The closing market value of EXPI stock on the month’s final trading day determines the total issued shares and the stock price. This stock has no vesting restrictions and agents have the option to opt-in or out of this program whenever they want.
Using the eXp Enterprise tool, you can examine and sell your stock purchases made under the Agent Equity Program at Shareworks, which holds the stock. Shareworks is open for business around the clock.
Community and Culture
Most agents at eXp own a share of the company, so the community at eXp is collaborative and creates healthy grounds for growth for all the stages of an agents’ career. Agents with eXp know that their financial interests grow when the company performs better and its share price rises.
eXp Realty’s Shareholders Summit and EXPCON also attract thousands of agents. Agents learn about networking possibilities, upcoming company news, and training throughout the general sessions.
Both agencies provide unique commission splits and training programs for their new agents. However, its approach to new agents makes eXp Realty stand out. Let’s take a look at the differences.
The eXp Realty eXpand Mentor Program
Some factors led to the creation of the Expand Mentor program at eXp University. First, every state has a real estate commission regulating all brokers. The same commission guarantees that all newly licensed agents receive the individualized attention they require to succeed.
With the help of the eXpand Mentor program, you can do just that. When you join eXp Realty, the company will pair you with a local MLS professional who will volunteer their time to help you improve your skills.
The eXpand Mentor program at eXp Realty helps agents who haven’t closed three or more deals in 12 months.
The agent is given a local mentor via the eXpand Mentor program. The first three closed deals for mentees get split 60/40, and after they complete the mentor program, they return to the usual 80/20 share. Until you finish those first three transactions, you will be meeting with your mentor weekly. After which, you will be able to complete the program and graduate.
To complement the eXpand Mentor program, eXp also developed a Fast Track training course that agents can complete on their own schedule.
The eXpand mentorship program should show how eXp Realty’s culture supports established agents and prepares new agents for success. Their community offers a unique opportunity to grow their business with the help of seasoned agents, brokers, and state-of-the-art technology.
eXp agents are on an 80/20 split – as long as they are not part of the mentorship program – and the cap is only $16,000 and there are NO franchise fees. This is much lower than many Keller Williams offices. After you cap, you only have to pay a $250 transaction fee for 20 transactions, then it drops to $75. At that point, you may qualify for the Icon program described above and you’ll get $16,000 back in stock after you have made 20 transactions and paid the $5,000 in capped transaction fees.
The first $4,000 is available in about 60 days, while the remaining $12,000 vests over three years.
Along with the potential for significant financial savings, eXp Realty provides several income streams through revenue sharing and stock.
eXp Realty provides the tools and resources I need to help new and upcoming agents to build successful teams and establish themselves in the industry.
eXp provides a life changing value proposition that helps me invest in the lives of every rookie who wishes to become a top-producing agent and every top performer looking for an exit strategy. That’s why Realtors Get Free with eXp! Learn more by scheduling a confidential Clarity Call with Traci Gagnon 210.465.5275