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What is eXp Realty Commission Split for Agents?


eXp Realty is a fast developing, yet newer real estate brokerages model. This brokerage is infamous for its so called cloud-based approach were agents interact with the company and fellow eXp agents in a virtual cloud office.

Traditional real estate companies are not very generous about splitting commissions with their agents. However, eXp Realty is a newer company that has tried to model it compensation model off of some of the largest, successful brokerages. eXp Realty advertises that they are agent focused and agent owned, yet they are also a publicly traded company with Wall Street shareholders owning the company along with agents that invest in shares, thus owning a shall percent of the company.

 If you’re here you must be interested in joining a real estate company and came across eXp realty. You’re probably wondering what is eXp realty commission split for agents and how it works and how it compares with other companies, like Keller Williams or RE/MAX.  

To satisfy your curiosity briefly, you get a commission split of 80/20 until you reach your $16000 yearly cap. That is by giving the company 20% at a time. After this, you get 100% commission for the rest of the year. There are additional fees per month and per transaction that rise above the CAP amount.

As with any real estate company or transaction, the devil is in the detail. Keep reading to learn how the commission splits work and some of the potential benefits and drawbacks of eXp Realty. Let’s start with what eXp actually is.

What is eXp Realty and what does it stand for? 

eXp Realty is a cloud-based real estate brokerage. It is completely virtual meaning everything takes place in a cloud system; they call it the “eXp World”. eXp is well known for its passive income potential and great stock ownership. One of the founders, Glenn Sanford tried to add all the positive things for a network marketing company and wrap them into eXp Realty. 

The reason why it is called eXp Realty is quite interesting. The owners went for eXp for two reasons. One is that it was an available name, and two is there are many great words in the business having the same prefix. This means that countless words start with the prefix “eXp”. 

eXp Realty is attempting to position itself as a disruptive technology-based company. I say attempting because although they use a software system that they own, VirBELA to manage the cloud office and meeting, the rest of its lead generation tools are off the shelf software products that are available to every agent in the marketplace that are patched together.

eXp world has a classroom, places for leisure, meeting room, and your office. You can even network every day and meet with other agent within the company.  

What is a cap? And does eXp really have a cap or a threshold?

Fundamentally, a cap is the yearly return one receives in rent. It is widely used by commercial agents, residential agents as well as real estate investors. Upon joining a real estate company, there will be a fixed date on the month you joined which will be counted as your anniversary.

Once an agent fulfills the amount of cap of a year, they will get 100% commission for the rest of the year until the anniversary comes. The commission will reset after the anniversary.

While there is not longer a charge of a commission split, there still are administrative and brokerage fees that occur that are paid by the agent on every transaction, and some of these increase after the cap is reached. Therefore, you could argue that it is not really a cap, rather it is a threshold reached on a particular charge from the company to the agent.

While in most parts of the US, the cap is $18,000 to $25,000 with other brokerages annually. eXp Realty actually has a fixed annual cap which is $16000, with no geographical difference. There are no royalty fees charged as a percentage of the commission, yet as previously pointed out, there are other broker fees and cost on each transaction.  

Commission Split and other finances

Your commission split is fixed at eXp. There is an 80/20 split between the agent and the broker. But the company takes $16000 as cap. 

To put it simply, once you have accumulated $16000 to the company by paying 20% at a time, you will get a 100% commission throughout the whole year. So, in order to accumulate $16000 to the company, you have to achieve $80,000 in gross commission income or GCI since the split is 80/20. 

Transaction Fee

After an agent-caps, they go to 100% and only pay $250 per transaction. If an agent pays in $5000 in transaction fees after capping, they will move to a $75 per transaction fee for the remainder of the anniversary year. 

In addition, there is a risk management fee charged by the company of $40 per transaction. This fee is designed to cover the Errors and Omissions Insurance for the agent and brokerage. Once an agent has paid $500 in risk management fees paid for the anniversary year this fee is no longer charged until the following year.

But wait, there is more. Each and every transaction, whether the so called cap / threshold has been met will be charged a $25 per transaction broker review fee. This fee does not cap. For agents in Canada, this fee is $29 per transaction.

If you take the time and do the math, as a newer agent or even an experience agent, the commission split, cap / threshold and per transaction fees can add up to be more than other brokerages charge for a true cap or a threshold / monthly desk fee model.

eXp attempts to offset this fact with it ICON status program

Getting qualified for ICON status is based upon transaction units. You can get qualified for the ICON status immediately after closing the 20th transaction before your anniversary year ends

Now you may be wondering what this ICON status is all about. 

Well briefly speaking, you are qualified for an ICON when you pay $5000 in total paying $250 each transaction. Now it may take a little more or else. But it is worth it since an ICON agent gets a number of rewards and facilities. 

ICONS and rewards: 

With paying only $250 for the following 20 transactions after your 100% commission, you will be qualified to be an ICON. Now, there are some crazy benefits of becoming one.  Think of it as a CAP plus basis. You have to reach you cap, plus you have to have paid the added $250 to have the right to be awarded stocks that you can only sell if you have been with the company for a total of 3 years.

There is $16000 in total stock awarded on paper for being an ICON agent. Now, it is broken up into a couple of different things: 

  • Half of it, $8000, it credited to you on paper when you hit the production value. (The company says that they award you stock, but because of the vesting period, it is only a credit on paper until you can cash it in.) Now, this stock is vested for 3 years. Meaning you have to be with the company for three years in order to claim it. 

After three years, you can sell this $8000 worth of share that you got on today’s value. For example, if someone gets this in 2020, then after three years that is in 2023, they will have the same stock but with a potential higher or lower value compared to what they got it with this year. 

  • There’s another chunk of shares. $4000 vested for two years. This enables you to meet cultural requirements. This basically means a way to give back to the company. For example, you can be a mentor, ICON instructor, be in the ICON vetting company, and many more. Basically, you have to help the community grow in one way or another. 
  • Then there’s the remaining $4000 worth of shares. $2000 for each event attended. Say after becoming an ICON you go to the next shareholder event, You’ll receive $2000. And then again you go to the next eXp con, you get the last $2000. There is no vesting period for the event ones. 

And this is pretty much all rewards an agent gets upon hitting ICON.  This system is designed to keep the agent with the company, no matter how the company is performing.

eXp Realty Revenue Sharing System

Revenue share is very different from profit share. Revenue is when you are being compensated for the revenue someone else is directly bringing in. The total money earned is distributed in revenue share. Whereas in the case of profit share, only the profit is distributed. 

eXp will pay you the revenue share from their 20% share of the commission split. The revenue is paid to the agents for every deal until the agents reach cap again leaving no more money to earn. The best part of this program is that it is paid monthly. 

One of the potential downsides to a revenue share program as opposed to a profit share program is that it promote a different culture that could cause the company to not be achieving a profit. Ask yourself, what happens to the stock value of publicly traded companies that do not meet their profitability targets. Exactly. Also, agent care about the revenue of the agent that they brought into the company, yet may not be as concerned about the overall profitability of the office / company or the production of other agents in the office. This can create a culture of apathy or a dog eat dog level of internal competition.

For revenue share in eXp, even if the agent that recruited the other agent to the company stops selling, they will still keep getting paid. Moreover, it doesn’t matter if you’ve been with the company for a year or 10 months, you can get a revenue share. 

However, you do need a real estate license but there is no vesting period. If you leave the company, the payment end. 

Conclusion

Expectantly, this article has provided the answer to your question “What is eXp Realty Commission Split for Agents?” clearly. eXp world and the cloud office allow agents access to the same training and classes and meeting. With the recent COVID-19 pandemic, a number of other companies have followed this cloud model, making the training and support available in a virtual format.

If you are an agent that is experienced, and does not need the local office support offered by other companies, then eXp may be on to something that you can relate to. Most newer agents may feel lost in this cloud only setting.

We have compiled a list of the best real estate commission splits in another article

We hope you found what you were looking for in this article.

Robert Earl

Robert Earl started in Real Estate in 2001. During his career he has helped hundreds start a career in real estate, helping them understand the licensing process and assisting them in getting their business up and running. Robert is a Coach, Mentor and also an Air Force Veteran.

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