eXp Realty Revenue Share Explained
eXp Realty Revenue Share is an exciting opportunity for real estate agents, brokers, and team leaders from all over the country to build an additional stream of income while still earning commissions from selling real estate.
eXp Realty is a cloud-based real estate brokerage with no brick and mortar offices worldwide. Because of this, eXp Realty’s overhead is significantly lower than traditional brokerages. With these cost savings and because eXp Realty doesn’t employ expensive corporate paid recruiters, eXp can afford to pay it’s agents and brokers a percentage of the revenue generated from each agent they sponsor into the company.
This opens some very interesting opportunities for agents looking to build wealth and generate additional streams of income other than just selling homes. The best part of the eXp Realty Revenue Share program is that it is paid monthly (on the 22nd of every month). This becomes a great way to supplement the roller coaster income most agents experience.
WHAT IS REVENUE SHARE?
eXp Realty Revenue Share is a percentage of revenue that agents earn for attracting that agent generating the revenue into the company. All agents at eXp Realty are on an 80/20 split with the company. When an agent closes a deal, a percentage of the companies 20% goes back to the agent that sponsored them. We’ll get into the breakdown of percentages later on.
But for now, just remember that Revenue Share is paid by eXp Realty from eXp’s percentage of the commission split, the 20%. We’ll refer to this 20% as “company dollar”. Revenue Share is paid out on every deal up until the agent caps for the year and no more company dollar is earned.
The cap is $16,000 in gross commission income paid into the eXp Realty. This totals $80,000 in total commissions. $80,000 x 20% = $16,000 paid into eXp Realty. At this point, the agent is at 100% for the rest of the year until their cap resets.
Once the agent’s cap resets on their anniversary with the company, Revenue Share starts back up all over again.
WHY IS REVENUE SHARE SO IMPORTANT?
The importance of Revenue Share for real estate agents cannot be understated. Most agents work decades and don’t have much to show for it at the end because all the commissions earned over the years get spent along the way of life.
eXp Realty Revenue Share is different, however. Even when an agent decides to stop selling real estate, they will continue to earn income from the Revenue Share program.
There are no vesting requirements. However, you do need to keep an active real estate license and have it be held by eXp Realty. Revenue Share is looked at like real estate commissions and in order for commissions to be paid in most states and countries, you need an active real estate license.
Diversify / Multiple Income Streams
Another reason why eXp Realty Revenue Share is so important for real estate agents is that it allows agents to begin to diversify their income.
We all know that as real estate agents and brokers we have bad months from time to time. Even months where we may make no income at all.
Revenue Share helps to smooth out the off months and make the good months even better!
WHO CAN EARN REVENUE SHARE?
Revenue Share is paid to any real estate agent or broker that has an active real estate license held by eXp Realty. It doesn’t matter if you have only been licensed for 1 month or 20 years. You can begin earning Revenue Share immediately.
In most real estate brokerage models, a share of the earnings are only given to the broker-owner, franchise or regional manager, or paid recruiters and team leaders.
eXp Realty is not a franchise model and there are no territories for sale. eXp Realty is one very large real estate brokerage that spans all 50 US states, Canada, and soon Australia and the UK.
This means that not only can you earn Revenue Share as an agent with eXp, but you can also earn Revenue Share from agents in all the above-mentioned areas.
Also, there is no production requirement to earn Revenue Share. You can sell as many or as few homes a year as you would like.
Perhaps you are trying to compare the Revenue Share model to other income-earning opportunities within real estate. There are a few other models that get commonly compared to eXp’s.
Keller Williams Profit Share
One of the most commonly compared models to Revenue Share is Keller-Williams profit share.
Profit share is paid in a 7-tiered system, similar to eXp Realty but the major difference is that the money paid is off the bottom after expenses have been paid for that market center.
The problem with this is two-fold. First, whenever you sponsor an agent, you are getting paid less per transaction because it’s based on profit rather than revenue.
Second, every market center is independently owned and operated, meaning that profit is not even guaranteed. There are many circumstances where a sponsor may not earn any profit share for a sponsored agent if the market center is unprofitable.
Owning an Independent Brokerage
Many independent brokers look at the eXp Realty business model and wonder why they would merge their brokerage into eXp Realty when they can already recruit and earn income from sponsoring agents.
While this is true, there are many reasons why eXp Realty may be a better option. Click here to watch a video I made comparing the independent brokerage model to eXp Realty. But for now, here’s are two main reasons to consider eXp Realty over building an independent brokerage.
First, is scalability. With eXp Realty’s model, you can scale your business to all 50 US states, Canada, and even more countries coming soon and you do not need to join a single MLS, except for the one you already belong to.
The benefit here is that not only can you personally sponsor agents from wherever you may meet or know them, but your sponsored agents can also tap into their networks all over the country which will help build your organization that much faster.
Next, is leverage. With most independent brokerage models, the broker-owner is responsible for doing so many jobs. Recruiting, retention, creating systems and tools, accounting, training, transaction management, operations, and many more.
At eXp Realty, you get to leverage all the support of over 400 and growing US and Canada based employees that handle most of these tasks for you so you can focus on doing what you as an independent broker-owner most likely do best, recruiting and sales.
Additionally, you will see a massive increase in leverage on the recruiting side.
In most independent brokerages, the broker is responsible for 90% or more of the agents that are paying into the brokerage. At eXp Realty, it’s not uncommon for agents to attract a handful of agents personally but have an organization of many more agents, sometimes hundreds or even thousands of agents.
This is all because agents at eXp Realty get paid Revenue Share on up to 7-tiers down. This means that even when you sponsor an agent, it doesn’t stop with them. Eventually, that agent you sponsored will likely sponsor someone and you’ll earn Revenue Share from that agent as well. This continues to happen as agents sponsor agents, 7-tiers down.
Because the names are so similar it’s not hard to confuse eXp Realty with Exit Realty. However, the two business models couldn’t be more different.
Exit Realty is a franchise business model where broker-owners buy into a territory and grow an office locally. Additionally, they offer their agents a share of the commission generated from agents they sponsor but it stops at only 1 tier. This means only the agents they personally sponsor earn them income.
This takes away all the leverage that we talked about above from the 7-tiers and basically forces agents to constantly be recruiting to make any money from the opportunity.
HOW IT WORKS
Ok, so let’s talk about how the eXp Realty Revenue Share program works.
First of all, you’ve already heard me mention tiers in this post many times. Let’s start here and talk about the different tiers and how they work.
Any agent that you personally sponsor will be on your Tier 1. You cannot nor would you want to add an agent to any other Tier, 2-7.
Whenever an agent you personally sponsor attracts another agent, that new agent is now on your Tier 2. This continues on in this manner all the way until you have agents on your Tier 7.
Now that you know which tiers agents fall on within your Revenue Share organization, it’s helpful to know how much you can earn from each one of them.
Here’s a chart that shows the percentage you earn from agents on each level along with the maximum in Revenue Share you can earn from each agent on that particular level each year before they hit their cap.
You’ll notice that each tier is worth a different percentage. Any agent you personally sponsor (Tier 1) is worth 3.5% up to $2800 annually. This means when an agent that you personally sponsored closes a $300,000 deal and earns a 3% commission, $9,000. You earn 3.5% of the $9,000 which equals $315 which gets paid on the 22nd of the month after the transaction closes.
Now let’s take a look at Tier 2. Again, Tier 2 would be an agent that one of your sponsored agent sponsors. One interesting this to note is you earn MORE for agents on this Tier than you do your Tier 1. You earn 4% for all transactions that close on this tier up to $3,200 annually, per agent. Let’s take another example. $300,000 home closes from an agent on your Tier 2. That agent earns $9,000 (3% of $300,000). You earn $360 for that one deal! Better yet, the agent you sponsored who sponsored the agent on your Tier 2, earns $315 as well.
Floor Qualifying Required Agents
In that chart above you may have seen a column labeled “FLQR”. This stands for Floor Qualifying Required Agents.
What this means is that you’ll need a minimum number of Tier 1 (personally sponsored agents) to “unlock” Tier’s 2-7.
For example, to unlock tier 2 you need a minimum of 5 personally sponsored agents into the company.
To unlock tier 3, you need a minimum of 10 personally sponsored agents.
And so on down the chart, until you hit 40 personally attracted agents and you’ve unlocked all 7 tiers.
So the charts are great and all… and now it’s maybe making a little more sense but let’s put this into real-world numbers so you can see how Revenue Share works as an income stream.
Here are a couple of examples of Revenue Share in action.
5 by 5
Let’s use the example of an agent who goes out and sponsors 5 agents. Let’s say it took this agent 5 years to do this. They successfully bring over 1 agent per year.
This is an extremely passive example that just about anyone can do, even if they are only selling real estate part-time or new to the business.
Let’s also assume that we go out and help those 5 agents go out and do the same thing over the course of those five years.
What that looks like is 5 agents on your tier 1 and 25 agents on your tier 2. If you remember correctly, you earn $2800 for each capping agent on your tier 1 and $3200 for each capping agent on your tier 2.
If we do the math, that equals $14,000 annually from the agents on your tier 1 and $80,000 for the agents on your tier 2. A total of $94,000 annually.
Now you’re probably thinking, what if some of the agents don’t cap? And that’s most likely going to be the case. From what we’ve seen the average is most agents are half cappers…
This means that we would conservatively say that in that scenario, the max is $94,000 if you know all high producing agents. But realistically, you will most likely see around $47,000 annually.
Either way, that’s nearly $4,000 / month for introducing eXp Realty to 5 agents over 5 years and helping those agents do the same thing.
10 by 10
Let’s kick it up a notch. Let’s say you have higher ambitions. Maybe you already run a team or brokerage and have over 10 agents.
In this example, I am going to show you how that starts to add up to a lot of money pretty quickly.
Let’s say you are gung-ho and go out and get 10 agents in 2 years. That’s 5 per year and totally doable. (Side note: There are agents at eXp Realty that have attracted over 40 agents in their first 6 months!)
In the next 4 years, we help those 10 agents go out and get 10 each…. Wait a minute! You’re probably thinking, not everyone will go out and get 10 agents no matter how much help. And you’d be correct.
What does happen though is this. 1 to 2 agents get 0, 2 to 3 get around 5, 2 to 3 get around 10, and 2 take it all the way and get 25 or more. This averages out to 10 for each of your 10. We’ve seen it time and time again already as eXp Realty has climbed to over 20,000 agents.
So then, what this looks like is now 10 agents on your tier 1 that equals $28,000 annually. 100 agents on your tier 2. That’s $320,000 annually. The total annual income is $348,000 with full capping agents. If we assume again that the average agent is a half capper, this scenario would produce $174,000 annually.
If you’d like to plug in your own numbers and see what it could be worth in a few years check out revsharecalculator.com.
Here are a few tips for what to input:
6 properties sold per year, $225,000 average price, 3%
I use these variables because if you do the math that equals an income of $40,500 per year, which is roughly what the National Association of Realtors says agents made in 2017.
Next, for the variables for the different levels, I input whatever number I think I can personally attract to eXp in Level 1. 5, 10, 25, 40, 100… Whatever you think you’ll personally attract in 4 years. I think in a timeframe of 5 years because it’ll most likely take around 4 years for the next variables to fill out.
For levels 2-7, I put in “2” for all of them. This assumes that each agent will average 2 agents attracted into eXp Realty over the next 4 years. From past experience, this number seems to be a good average over the course of 4 years’ time. Again, not every agent will go and attract 2 agents. As mentioned before, some will get 0, some will get 1 or 2, some will get 5-10, some will get 40 or more. So the average among all agents we are assuming is 2.
Now hit “Calculate”. You’ll see how much annual income you could earn in the eXp Realty Revenue Share model with the variables used. The coolest thing about this calculator is that it shows all 7 tiers, more than just a few tiers we used in the above examples.
The calculator already figures in unlocking levels. This means if you put 5 in your tier 1, it will give you full Revenue Share figures for tiers 1 and 2. Tiers 3 through 7 will be at the reduced Revenue Share percentage since the levels are not unlocked by having 10 personally attracted agents.
This brings up a good point to note. Even if you haven’t unlocked a level by having enough front line agents, you still earn a smaller amount of Revenue Share from all levels. It’s not all or nothing.
Revenue Share Calculator Example
Using the variables above, let’s input 10 agents in your tier 1. You’ll see when you hit calculate, you can see that you’d earn approximately $291,195 annually with 10 agents personally sponsored after a few years once they’ve had time to duplicate and all go out and attract an average of 2 agents all the way down to your seventh level.
Now input 15, 25, 40 and see what is possible.
VALUE OF RESIDUAL INCOME
Now let’s put this into perspective for that currently investing or looking to create a retirement.
A well-known study called the Trinity Study talks about a safe rate of withdrawal on retirement funds to be 4%.
If we use that number and relate it to how much annual income is produced through Revenue Share, it’s easy to see how powerful even attracting just a few agents can be long term.
Let’s assume that you attract 10 agents after 3-5 years and are earning $175,000 annually in residual income through Revenue Share. To provide the same level of income in retirement, you’d need $4,375,000 withdrawn at 4% and provide the same $175,000 annually.
What’s harder to do, attract 10 agents personally and help those agents go duplicate your results, or save up over $4 million dollars. Even if you could save for 20 years, you would need to save over $200,000 per year (after taxes and normal living expenses).
One of the best things about the eXp Realty Revenue Share program is transparency. eXp Realty has built a dashboard that tells you in real-time, exactly how much you have earned in Revenue Share throughout the month. Also, you can log in and see exactly how many agents you’ve attracted, how much production those agents have done, and your whole organization down to 7 tiers at a glance.
(*Actual numbers have been removed to comply with eXp Realty policy regarding sharing of Revenue Share dashboard.)
Agents Sponsored – The total number of agents personally sponsored on your tier 1, including husband-wife teams.
MY FLQA Agents – The total number of ACTIVE agents sponsored on your tier 1. To be active, the agent must have done either 2 transactions or $5,000 in gross commission income in the last 6 months. (This is the number that goes towards unlocking your different tiers.)
MY FLA Agents – The total number of agents sponsored on your tier 1, husband-wife teams counted as 1 spot.
My Revenue Share Group – The total number of agents sponsored all your tiers, 1-7
New (Last 30 Days)
All Unpaid Revenue Share – All Revenue Share that you’ve yet to collect on.
Revenue Share Expected in Next Check – All Revenue Share that you will earn on the next 22nd of the month.
Last Revenue Share Paid – All Revenue Share that you most recently were paid on the preceding 22nd of the month.
Revenue share is paid out on the 22nd of the month following the month the Revenue Share was earned. Meaning if an agent in your Revenue Share line closed a deal between January 1 – January 31 you’ll earn that Revenue Share on Feb. 22nd.
Between the 1st and the 22nd of the month, you’ll often see “All Unpaid Revenue Share” and “Revenue Share Expected in Next Check” will be two different amounts. “All Unpaid Revenue Share” equals “Revenue Share Expected In Next Check” plus any Revenue Share that has closed during the current month that will be paid in the following month.
Additionally, you will see “Revenue Share Expected In Next Check” increase even after the month has closed out. This is due to the fact that this number is updated once the file is complete on eXp’s end. Let’s say the deal closed January 28th but the agent doesn’t turn the Closing Disclosure into eXp until Feb. 5th. You’ll see your Revenue Share that is to be paid out on Feb. 22nd increase on Feb. 5th even though January is over.
Revenue Share Group Report
One of the best things about the Revenue Share Dashboard is the ability to see all your 7 tiers of agents in one central location. This helps to be able to reach out and provide support and motivation for those on your team.
You can see locations of all the agents and help inform of events going on in the area.
Additionally, you can see how close each agent is towards capping and when their anniversary date is so you know who’s contributing to revenue share and who might most need help and support.
Revenue Share Period Details
Here you can see your revenue share broken down by agent and how much each agent contributed to your revenue share that month. This is a great way to track team production as you can see your team broken down by transactions and gross commission income, etc…
One of the most common misconceptions I hear most often is that eXp Realty is a pyramid scheme. What I’ll say to that is that it couldn’t be further from the truth.
First of all, pyramid schemes are ILLEGAL. eXp Realty is a publicly-traded company on the NASDAQ. Our finances are audited by the SEC quarterly.
eXp Realty is first and foremost a real estate brokerage focused on selling real estate. The Revenue Share program is simply the form of compensation the company chooses to give back to the agents helping to grow the company. Rather than paying corporate recruiters or building a model based on selling franchises and regions, eXp Realty cuts out the “middle-man” so to speak and offers the overhead cost savings to the agents, brokers, and team leaders helping to grow the company.
eXp Realty has low startup costs, $149. This is a major difference from a pyramid scheme that charges extremely high startup costs as this is the money that funds the scheme. Selling real estate is what funds the Revenue Share program. No Revenue Share is distributed without homes being sold.
Lastly, the focus of the eXp Realty brand is on selling real estate. Even though Revenue Share plays a major role in the compensation of agents at eXp Realty, if you ever attend an eXp Realty event or talk to anyone in a leadership role, their focus is on helping agents sell more real estate.
In conclusion, eXp Realty Revenue Share is a unique opportunity to build an additional stream of income while continuing to do what you are already doing, selling real estate.
The best part of this entire opportunity is that eXp Realty agents are having fun. It’s extremely rewarding to sell real estate and even more rewarding to be building residual wealth in the process.
Agents need to join at a real estate brokerage to legally sell real estate anyway. Why not join a company that has a compelling story, industry-leading systems and tools, and a one-of-a-kind income-generating opportunity?
If you’re looking to take your real estate business to the next level and would like to talk with me personally, set up a time on my calendar here.
If you’re ready to make the move and want to partner with me here at eXp Realty, here’s my join link to fill out your application. Be sure when you fill out your Independent Contractor Agreement that you input “Kyle Handy” as your sponsor.
If you’re reading this and already have been speaking with an eXp agent or maybe they sent this post to you to read, be sure to get back to that agent and ask them what the next step for you is.