Real estate has proven fertile ground for disruption. Companies like Redfin and Zillow grew from startups to industry behemoths. What it all boils down to is this—the real estate industry is going to evolve alongside technology.
eXp 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).
They have no brick and mortar locations. As a result, they can scale faster, never having to bear the cost of opening or operating an office. Not only does all the information exist on the cloud, but they also have an entire online campus. This set up looks like a video game, where there are different classes throughout the day, often more than 10, amounting to over 25 hours a week of live training along with an archive of previously recorded sessions. You literally move about the campus in the form of a digital avatar.
By existing in the cloud, a lot of the money eXp saves goes into lead generation. They currently use a few lead gen systems, and the price for eXp is deeply discounted. They provide access to either Kunversion or Commission Inc. as part of the $50 a month tech package.
According to Greg McDaniel, host of Real Estate Uncensored and a recent 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.”
A basic break down of the upfront cost is this:
- $149.00 start-up fee (one time, includes first monthly fee)
- $50.00/month tech package
- $420.00/year University Educational Fee (broken into monthly $35 payments)
The commission and transaction fee breakdown is as follows:
- 80/20 split until CAP
- No Royalty
- Annual CAP at $16,000 paid to eXp
- Team agents – Half CAP/$8,000 paid to eXp
- When you CAP you are awarded 250 shares of 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.