Wondering if you should join eXp Realty? It’s a hard decision to make. There are hundreds of options out there for real estate agents looking for a good brokerage to join. Most of the time, these brokerages are pretty simple–you pay a flat monthly fee and get to conduct sales at your discretion. You’ll then pay a commission split on each sale. However, some brokerages do charge fees for training, marketing and lead generation, and other services as well.
For these reasons, it can be tempting to jump into starting your own brokerage. It’s always nice to feel like you own something and don’t have to pay all kinds of fees just to keep your business going. Unfortunately, there’s a lot more that goes into starting a real estate brokerage than you think. It’s not easy.
For that reason, it may not be the best idea to start a brokerage yourself. In this article, I’ll help you understand just why that is. I’ll also show you why I chose to join eXp Realty instead of starting out on my own.
The Three Reasons You Should Join eXp Realty
When it’s all said and done, everyone has different reasons for making their business decisions. I had known about eXp for about a year before I joined. For that year, I was teetering on the edge, still considering starting a personal brokerage. However, I was concerned about the high initial costs, the struggle of building an agent team, and the years I would have to wait to get a good thing going. Finally, I began to consider eXp for real, and, in the end, there were three main reasons that pushed me to join eXp Realty.
1. Revenue Streams at eXp Realty
It’s important to know where your money is coming from and how you’re going to earn what you need to support your lifestyle and your family. Although real estate is a lucrative business, it can also be unstable and vary in income from month to month. For me, it was important to have several revenue streams that I could rely on. When joining eXp, I already had several, but one of the reasons I decided to join was the multitude of other revenue options available to eXp Realty agents:
- Commission Split. At eXp, the commission split is 80/20. eXp gets 20% of each sale, you as the agent get 80%.
- Stocks. As an eXp agent, you earn stock 5 different ways. Earn on your first sale, on a sponsored agent’s first sale, when you cap, when you reach ICON status, or by investing 5% of every commission at a 10% discount.
- Revenue Shares. You can sponsor other eXp agents and earn a percentage of their commissions (taken from the company’s 20%, of course). There are seven tiers of this program, and each can grow exponentially.
- America’s Preferred Home Warranty. Agents at eXp are affiliate partners with America’s Preferred. When one of your clients purchases a warranty, you earn a $50 referral fee.
- Utility Connect. If your clients use Utility Connect to compare and transfer their utilities, you’ll earn 15% of any income Utility Connect earns from their service providers.
- Currencies Direct. If your client needs to convert currency, they can do so with Currencies Direct and you’ll earn .2% of the amount they convert.
- IntroLend. You can invest your money in eXp’s in-house brokerage company and earn quarterly distributions of their earnings.
- Express Offers. You can use this platform to sell your clients’ homes for cash to institutional buyers. You can also introduce institutional buyers to the platform. Either way, you earn when a property is purchased.
- Virbela. Virbela is the platform on which eXp’s cloud is based. As an agent, you can earn 25% of what other users of this platform pay to Virbela each month.
- Mentor/Mentee Program. New agents with limited experience are automatically enrolled in a mentor program at eXp, which means their first three sales will be transacted at a 60/40 split. If you become their mentor, you earn 10% of those first three sales, taken from eXp’s 40% share.
With these options, you can feel much safer about your money. You diversify your earnings into several platforms, build insulation against sudden market turns, and build your passive income. Plus, there are options for working in teams and charging commissions from your team members’ 80% commission.
Starting On Your Own
Now, could you create your own 10 revenue streams and compete against eXp Realty if you decided to start your own brokerage? The short answer is no. There’s too much on eXp’s side for you to be able to effectively compete against them.
To start, you don’t own Virbela, but eXp Realty does. You also don’t own IntroLend, which is another strike. Creating further revenue streams that could come close to matching eXp’s options would be much more work than it was worth. Starting your own brokerage is not going to turn out as well for you as it did for eXp.
2. Ready Built Network at eXp Realty
One of the big concerns of starting a brokerage is the time and energy it takes to build a team, a brand, and a presence in the competitive real estate market. eXp already has a network of agents and a strong marketing presence. With the support of their full-time staff and technology, you can quickly scale up your business to where you want it to be while saving time and money.
Plus, as an agent for another broker, your liability is hugely limited. This leaves you with a much lower chance of running into some kind of legal challenge all on your own. You get support from eXp for all kinds of things, including ongoing training and access to technology. As everything has started moving online lately, it’s become more important than ever that real estate agents can set their businesses on an internet platform. And eXp makes that easy.
Starting On Your Own
If you start your own brokerage, you’ll need at least $50,000 to do it right. You’ll have to pay for a commercial real estate lease, buildout, furniture, equipment, software, utilities, licensing, marketing, etc.
If you decide to purchase a franchise (Keller Williams, Century 21, etc.), add at least $40,000 more to your startup cost (varies depending on brokerage, location, etc.). Just to get off the ground before any sales are made, you’re in for thousands of dollars of expenses.
Plus, you have to recruit, train and supervise all your agents, so you’re going to spend tons of time or money recruiting agents (either by yourself or by paying a recruiter $80,000 a year) to sell with your brokerage. Once the agents sign with your brokerage, you have to train them to sell. You’ll either do this alone or with a trainer who will charge you $50,000 a year or be compensated from the agents’ commissions, eating into your profits. Once the agent is FINALLY selling real estate, you have to ensure they are doing so in a compliant way or you’ll risk lawsuits, fees, or losing your broker’s license altogether.
HOWEVER, with eXp, you only pay $85/mo and you can bring on as many agents as you want. Once you build a team, you are GUARANTEED at least 3.5% off of their commission. Plus, if you want to collect an additional percentage and operate as a team, you can do that and charge 10%-30%. At eXp, you can do all of this without investing thousands of dollars, training, or reviewing contracts.
3. Exit Strategy On Your Own
Working as a real estate agent is a LOT of work. There’s a saying in real estate that “real estate agents don’t retire, they just die.” That sounds grim, right? Unfortunately, it’s a saying for a reason–it’s mostly true.
The exit strategy with real estate brokerages is difficult to pull off. You either attempt to sell the brokerage for the book of business at a low multiple (typically 2x) with an earnout clause, or you try to get a family member to continue the legacy. This means that if you sell, you’re selling for very little as the profit margins are not always there. If you choose the second option, your family member may run the business to the ground and you won’t receive any residual income.
Understanding this sad reality is the BIGGEST reason I decided to join eXp Realty instead of starting my own brokerage.
Starting With eXp
There are a couple of main things that eXp does to help agents retire:
- With eXp, you can easily cash out stocks that you’ve been building all along and add them to your portfolios. At the end of 2020, stocks were selling at about $80. Imagine if you were part of the brokerage then, earning thousands of stocks when they were priced under a dollar just a few years earlier? Agents who were in that place and were making ICON status are now millionaires on the STOCK ALONE!.
- The revenue share at eXp doesn’t stop either. When you die, you can will the revenue share to your family. This is a huge bonus, since you don’t have to give your family a brokerage they may or may not want. They don’t have to learn how to operate it and become a business owner/entrepreneur like you if they don’t want to. They just get ALL of the upside of passive income without all that extra trouble.
Joining the Brokerage
There are benefits all around when it comes to joining eXp Realty. You’ll be in a brokerage where you can build multiple independent revenue streams, join a worldwide community of hard workers who can help you grow, and build a solid plan for an exit when the time is right. There’s really not much more to ask for!
If you’d like to learn more about joining eXp, get in touch with me. I’ll tell you everything you need to know about the benefits of eXp and why it’s a better decision than starting your own brokerage.