What is eXp realty revenue share?
eXp Realty’s Revenue Share program is one of the many incredible opportunities the cloud based brokerage is offering new agents and broker across the nation(and abroad).
eXp’s cloud-based model allows the company to invest in agent growth, while taking on significantly less overhead and brick and mortar office costs. Instead of corporate paid recruiters and fancy titles like talent acquisitions director, eXp Realty depends on its agents and brokers to effectively spread the word and bring like-minded people in to grow the company.
Because of this, eXp Realty is able to pay its agents and brokers a percentage of revenue for each team member they sponsor in the company. The program is paid out every month and is becoming a lucrative option for those seeking a reliable passive income stream.
What Does Revenue Share Really Mean?
Like mentioned above Revenue Share is simply the term for a sponsoring party being awarded a percentage of the sponsored agent’s sales. Every agent, no matter the tenure or experience is on a 80/20 split with the company.
When the sponsored agent closes a deal, a percentage of the companies 20% goes back to the sponsor. This is earned till the agent caps or $16,000 in gross commission paid or $80,000 in total commission. The cycle starts over again every new year.
Why Should Agents Care About Revenue Share?
Income diversification and the ever elusive passive income stream are good reasons to take notice of eXp Realty’s Revenue Share. Let’s face it, some months will be better than others. Revenue Share implemented correctly can help even out off months and provide powerful financial security in good months.
Have you ever known an agent that worked hard for decades and had nothing to show for it when the time for retirement comes along? Commissions get spent, life happens, and if you don’t have an active saving/investment strategy you could end up with little to nothing to show for your years of work.
Revenue Share effectively serves as an exit strategy as a real estate professional. When an agent decides to stop selling real estate, they can still earn income through the revenue share program so long as they have an active real estate license. POWERFUL!
Who Qualifies To Earn Revenue Share?
Any active agent or broker that has their license hanging with eXp Realty is eligible to receive Revenue Share benefits immediately . This is in stark contrast to most traditional brokerages, in which the managing broker, franchise owner, or team leaders are awarded these commissions.
Because eXp Realty is setup as one large real estate brokerage spanning the entire US, Canada and abroad, you can earn Revenue Share from any territory or region the sponsored agent operates in.
Is Revenue Share New To The Real Estate Industry?
The concept of Revenue Share is not new, in fact Keller Williams profit share program is one of the better known systems that works on the same principals. Being that eXp Realty was created by a top producer from Keller Williams, we can assume he saw opportunities to make the system work even better while offering more value to agents.
You might be asking why eXp Revenue Share is better than Keller Williams profit share. There are two distinctive factors that eXp Realty has improved upon.
Firstly, at Keller Williams pays out AFTER expenses and fees have been paid for that market center while eXp is based on top line revenue before expenses. Secondly, while the sponsor at Keller WIlliams is already earning less from each deal, it is entirely based on the individually owned and operated market center.
If the market center is struggling, you can expect that your profit share will be greatly diminished.
How is it Different in An Independent Brokerage?
Many Independent Brokerage owners are reluctant to join eXp because they may already have a comprehensive recruiting system already in place.
Although this is an attractive business model from a broker-owner perspective, it can also be improved upon in two very powerful ways.
- Opportunity Cost – Most independent brokerages operate with the broker-owner taking full responsibility for tasks like training, accounting, creating procedures and systems, recruiting, compliance, operations and more. It just makes sense to leverage eXp Realty’s extensive back-office and support to take care of all these tasks for you, so you as the broker-owner can focus on what’s most important – sales and recruiting and retention.
- Scalability – eXp offers independent brokerages and opportunity to scale into all 50 states and abroad without going through the exhaustive process of state licensure and MLS fees. You have the ability to recruit anywhere, and the system goes 7 tiers down. So what if every agent you sponsor then sponsors one agent and so on. The potential for the program cannot be understated.
So How Does it Actually Work?
As stated above there are seven tiers. An agent you personally sponsor will be placed in Tier 1. Any agent THEY sponsor gets put into your Tier 2 and so on till you get to 7 Tiers.
There are also FLQRs or Floor Qualifying Required Agents to consider. A simple example is, to unlock Tier 2 you need a minimum of 5 personally sponsored agents in the system. To unlock Tier 3 you need a minimum of 10 agents. This goes on until you hit the magic number of 40 agents sponsored, which means you’ve successfully unlocked all 7 tiers.
Each tier in eXp Realty Revenue Share is worth a different percentage. Tier 1 is worth 3.5% up to $2,800 per year. So if an agent closes a $200,000 deal and earns 3% commission ($6,000) you earn a $210 payout for that month.
Since the tier levels are weighted differently, you will actually earn close to 4% of the commissions in Tier 2. From there it fluctuates slightly and ends at 4.5% in Tier 7.
Program Value and Misconceptoins.
eXp Realty’s built in Revenue share dashboard offers full transparency, real-time earnings, and daily transaction updates all in one convenient and intuitive interface. They also let you access a Revenue Share reporting feature that allows you to see every agent’s status and production in all 7 tiers. This is helpful to see who is close to capping for the year, and what agents may need some extra motivation.
But Is It A Pyramid Scheme?
One of the top searched for terms related to eXp Realty is if eXp Realty is a pyramid scheme. Frankly this is simply not true, and as a publicly traded company on the Nasdaq, financial auditors from the SEC would certainly agree.
Regardless of the amount of MSNBC’s show “American Greed” you watch, it’s important to understand that eXp Realty is focused on selling real estate above all else. And Revenue Share comes into the picture as a form of compensation the company chooses to invest back in its agents to help the business grow. No homes being sold = No Revenue Share payouts.
eXp Realty Revenue Share Examples
First we start with a super conservative and passive recruitment example. Lets say for the first 3 years you are with the company, you sponsor 3 new agents or 1 per year(Not hard to do with the techniques I teach).
For the sake of this article lets also say that you go out (or get my course) and help those 3 agents get their own Tier 1 agents over their first 3 years.
For this example, the majority of the agents are part-time and semi motivated, so they pull in half of cap or $1400 per year. After doing the math we end up with 4200/ year with our Tier 1 and $12,600 for our Tier 2. That’s $16,800 a year or $1,400 a month PASSIVELY. And thats if we assume all agent attraction and recruitment inquiries stop, which they won’t.
Second we will look at a more ambitious model. In this scenario you start with 10 agents whether they come from running a team or using methods and resources from this blog.
So in the first 2 years at eXp you bring in 5 agents per year for a total of 10. (Some agents have brought in 30-50 in their first year.)
During the following 2 years we then help the 10 in your Teir 1 attract 10 for a total of 100(realistically 75). Now what usually happens is maybe 1-3 agents bring in 0-2 new agents, 3-5 bring in around 5 new agents, 2 get around 10 and 1-2 go all out with 20-30+.
Since this is the more ambitious(but still realistic) example, we will assume each agent gets closer to cap but maxes at $2,000 per year. If we also assume that those 10 Tier 1 agents were only able to bring in 75 agents, this is what the numbers look like after the 4th year.
- 10 agents in Tier 1 x $2,000 = $20,000 annual passive income
- 75 agents in Tier 2 x $2,000 = $150,000 annual passive income
- Thats a combined $170,000 annual passive income after the 4th year
- This is without the go-getters from Tier 2 bringing in more Tier 3, and then 4, 5, you get the picture.
Lucrative: adjective – producing a great deal of profit and wealth
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