Real estate has proven to be fertile ground for disruption.
Companies like Redfin and Zillow grew from startups to industry behemoths and changed the way agents do business. iBuyers are multiplying quickly as sellers are willing to take lower offers in exchange for the not-too-shabby conveniences of selling “as is,” cash offers, and quick closings.
These changes, and the ones still to come, are made possible as the real estate industry evolves alongside technology.
eXp Realty is a leading example of technology changing the face of real estate. They refer to themselves as an “agent-owned cloud brokerage” and liken themselves to Netflix with conventional brokerages playing the role of Blockbuster (remember them?).
With no brick and mortar locations, eXp can scale faster, never having to bear the cost of opening or operating an office. Not only does all their information exist on the cloud, but they also have an entire online “campus.” The setup looks like a video game where you literally move about the virtual campus in the form of a digital avatar. Different classes are offered throughout the day, often more than 10 at a time, amounting to more than 25 hours a week of live training along with an archive of previously recorded sessions.
The money they save by existing in the cloud, eXp invests in lead generation. They currently use several lead gen systems, and the price for eXp is deeply discounted—the $85 per month basic fee includes access kvCORE CRM.
According to Greg McDaniel, host of Real Estate Uncensored and a convert to the eXp model, “There are three ways to make income with the eXp model: your normal commission income, passive income that you derive from your team, and company stock.”
Here’s a basic break down of the upfront costs:
- $149 one-time start-up fee
- $85/month basic fee (covers lead gen tools and access to training)
- $25/transaction broker review
- $40/transaction risk management fee (caps at $500)
The commission and transaction fee breakdown is as follows:
- 80/20 split until CAP
- No royalty fee
- Annual CAP at $16,000 paid to eXp
- Team agents – Half CAP/$8,000 paid to eXp
- Opportunities to earn eXp stock
Per transaction fees
- $25 broker review
- $40 E&O insurance per sale (Capped at $500/year)
- Capped agents receive 100% commission
- $250 fee per transaction for subsequent 20 sales after CAP
- $75 fee per transaction after the subsequent 20 sales
- ICON Agents earn their $16,000 CAP back in the form of eXp stock
eXp seems to give agents tangible incentives to succeed. Reviews from other agents on sites like Glassdoor are largely positive, but if you are the kind of person who still prefers the office environment, you might feel a bit unanchored. If eXp continues to grow at its current pace, it’s hard to imagine conventional brokerages not trying to mimic the model. But if other companies do embrace the cloud, it could be too little too late.