The most commonly asked question I get when talking to agents about joining eXp Realty is this: “What are eXp Realty’s fees?” After chatting one on one with over 1400 agents about the decision to join eXp, I HAD to become an expert in this topic.
Today, we’ll look in detail at the fees that eXp Realty has for all of its agents. Most of you will be pleasantly surprised when you compare them to your present brokerage.
The Fees at eXp Realty
There are five main fees at eXp and then a few more that we’ll look into more closely below. Let’s start with the top four fees every agent has to pay.
1. Startup Fee
This is a one-time fee that you’ll pay upon joining the brokerage. The eXp Realty startup fee is $149. This includes the cost to process your application along with your first month of your cloud brokerage monthly fee (next fee covered). EVERYONE pays this fee upon joining. No exceptions.
2. Cloud Brokerage Fee
This is a fixed fee that you pay monthly to maintain your access to the many services that eXp Realty offers. The total fee is $85, which breaks down to $50 for technology services (eXp World, eXp Enterprise, eXp Workplace, Skyslope, kvCORE, etc.) and $35 for educational services such as CE courses, the training library, etc.
Overall, this is a fairly reasonable fee considering how much you get for it. You’ll be able to access 60+ hours of live training, any Regus office location around the world, a fantastic CRM (kvCORE), and tons of bonuses to help you connect with other agents, complete transactions online, and learn from expert agents.
3. Commission Split
The biggest fee you’ll encounter while working at eXp is the commission split. For most agents, the split is 80/20—meaning you take home 80% and pay 20% to the brokerage. This per commission split caps at $16,000.
In practical terms, that means you have to reach $2.66 million in sales volume and then you can start taking home 100% of your commission without paying a split. Overall, it’s a fairly simple and transparent split, unlike most brokerages that will nickel and dime you with franchise fees, desk fees and more.
4. Broker Review
The broker review fee of $25 is applied at every transaction. This fee covers the cost of members in the brokerage reviewing your transaction to make sure there are no mistakes, legal issues, etc. The brokerage will review EVERY transaction.
5. E&O/Risk Management
With every transaction, you’ll pay $40 as a “risk management” fee. This covers any potential lawsuits or other legal expenses that could arise if you make a mistake or make a client unhappy. This fee caps once you’ve paid $500 for the year (about 13 transactions).
Other eXp Fees
In addition to these main fees which basically apply to everyone, there are a couple more situation based fees to be aware of.
New Agent Split
If you’re a brand new agent (defined as having completed fewer than three transactions in the last 12 months), you’ll have to work with a mentor and your split will be 60/40. The additional 20% goes to your mentor and eXp University, both provided to help you learn the ins and outs of real estate.
One of the big bonuses of working with eXp is that you do get a mandatory local mentor to help you get into the rhythm of things and figure out just how real estate works. You’re only required to work with them on your first three transactions, after which you’ll go back to a normal 80/20 split like everyone else.
Transaction Fees
After you cap, you do still have to pay a transaction fee on your transactions, though it’s ultimately going to be a lot smaller. This fee will start at $250 per transaction until you cap that at $5,000. Thereafter, you drop to a $75 per transaction fee.
ICON
ICON isn’t actually a fee, it’s actually a HUGE bonus that no other brokerage on this planet does. Once a capping agent completes 20 more transactions, they will be eligible for ICON status. An ICON agent can choose to have their $16,000 cap be converted into stock for them. Yes, a real estate agent gets their commission split back in the form of equity!
Real Life Numbers
So, let’s look at how this could work in a real-life situation. Let’s take my market for example. Say I manage to sell 30 homes—not that hard of a feat. At that point, the $16,000 I spend in commission splits comes back to me in the form of stock.
In the worst possible scenario, eXp goes bankrupt, that stock goes to zero…and then I need to find a new brokerage. Or, in the best possible scenario, I get to go back in time and reach ICON status in the 2010s, since my stock would be worth SO MUCH MORE today.
Of course, that’s obviously not possible. However, as eXp continues to expand on its way to becoming the number one real estate brokerage in the world by volume and agent count, the stock is sure to grow. It’ll be great to see how high it eventually gets.
Example Transactions
So, here’s a typical transaction and what it could like for you. We’ll look at it in a pre-cap and post-cap scenario.
Pre Cap
For a pre cap example, let’s say that you sold a home and got a commission of $10,000. After the 80/20 split, the $25 broker review fee, and the $40 risk management fee, you’ll end up with a total net gain of $7,935.
Post Cap
For a post cap example, let’s say you sold a home and got that same commission of $10,000. After the $250 transaction fee and the $25 broker review fee (if you’ve capped your sales, you’ve likely capped your risk management fee as well), you’ll get a net gain of $9,725.
Perks at eXp Realty
As you’re considering eXp Realty’s fees, it’s important that you keep in mind the perks that make these fees less painful. Here are two big perks:
- You get to complete three personal transactions at eXp without paying a commission split (you’ll only have to pay the transaction fee, broker review fee, and risk management fee, which is $315). These transactions would be for yourself only.
- You also get to run your own business plan with eXp. So, for example, if you want to give a discount to a client (such as a family member), all you have to do is cover the company minimum dollar ($565 including the minimum fee, broker review fee, and risk management fee) and you don’t have to charge anything else unless you want to.
The Issue with eXp’s Fees
There’s only one real issue with eXp Realty’s fees and their structure. This comes in when you start giving out referrals. If, like me, you have something of a national audience, you may find that you need to work with other agents to whom you can refer clients who aren’t local.
If you do this through eXp, however, you still have to pay that transaction fee…even after capping. So, if you refer a transaction to another agent in exchange for a small percentage of that agent’s commission, you have to use it to pay the entire $250 transaction fee at eXp.
Basically, if you get 10% of a $10,000 commission as a referral, or $1,000, you still have to pay $250 to eXp, which means you’ll end up with only $750. So if you do the math there…that means that 25% ($250/$1,000) goes to eXp in that case…which is MORE than the 80/20 pre-capping split. As you can see, this isn’t the worst possible scenario and really might not affect you that much if you don’t do a lot of referral work, but I wanted you to be aware of this potential issue.
Plus, it’s important to realize that even in this situation, you still get to reach ICON status and can still convert that initial commission you paid into stock for yourself. So, overall, it’s a win-win situation.
Ready To Join?
If you’re seriously considering joining eXp Realty, I hope this blog has helped you understand a bit more about eXp Realty’s fees and how they will affect you when you join.
If you’d like to dig a little deeper, you can check out this sample Independent Contractor Agreement, which is exactly like the one you’ll sign when you join eXp!
Or, schedule a call with me to chat about your real estate career, learn more about eXp Realty’s fees, and even get some FREE lead generation done for you!