Why We Made the Decision to Join the EXP Realty
If you're considering a move to EXP Realty... HERE ARE SOME IMPORTANT FACTORS THAT CONVINCED US TO JOIN EXP Making a change can be hard. As brokers of a successful independent brokerage, making the decision to become a team under EXP Realty was very difficult. We are researchers by nature, and so we spent over 6 weeks talking to the best and brightest minds in real estate, weighing the pro's and con's related to making this move. So we thought we would share what we learned in the simplest format possible. Hopefully our research will make it easier for you to decide whetherEXP is right for you too! So, why are we joining the EXP Realty movement? Simple. we want to make a difference on a bigger scale. We want to provide more for more family and more for my team. To do those things, we need to expand beyond my adorable destination town of 10,000 people. To expand, we need office space in other towns plus staff to man those offices. All of that means $$, which means we have to make more $$ from our new agents (who may or may not sell anything anytime soon, right?) It became obvious to us that agents... especially those in larger expansions markets (where competition between brokerages is fierce) are primarily concerned with keeping the MAXIMUM amount of their commission, but they are NOT that concerned with office space, floor duty, all the things that used to matter so much. They DO value beautiful marketing, however, so how convenient is that? That's kind of what we DO! And it's one way we can add real value to their real estate business. So, in general, we don't believe the most effective way of getting what you want is in telling people what they SHOULD want. Like, who has the energy???? It's just more practical to find a way to give them what they DO want. And we think that EXP combined with a little Absolute Charm branding and marketing touch has got EVERYTHING today's modern agent is seeking. Let's see if you agree!
To make your analysis easier, we put together this CHECKLIST to see if EXP Realty might be right for you
10 Signs EXP Realty May be Right for You HAVE YOU EVER THOUGHT: I want to grow my personal brand rather than just working to build the brand of a brokerage. I like to work from home. It's one of the reasons I got into real estate. When I need to meet clients, I wish there were pop-in work spaces closer to me.
I need more training on selling real estate, marketing, and running my business... but I need it to happen on my schedule. I need to be part of a movement that really emphasizes and truly lives its core values. I want to be part of something bigger than myself. Technology is here to stay, so I want to work with the most forwardfacing brokerage. I sometimes feel tech-challenged, but I'm eager to learn. I want to invest in the company where I work. I want to have a strategy to save for my future, but I don't know where to start. I value a national brokerage that provides the opportunity to network with like-minded individuals and share referrals across the country.
I want the opportunity to build a team of agents that I can inspire and support. I want transactional and broker support that I can access most hours of the day online. I need to keep more of my commission to be able to meet my financial goals and grow my business.
So How Ready for EXP are YOU? How many boxes did you check?
1-4 "I miss the gold jacket days!"
"I may be ready one day, but not yet..."
8-10 "Where have you BEEN all my life EXP?"
Ready to see the DETAILS?
EXP's CRAZY GENEROUS Fee & Cost Structure 80/20 SPLIT $16,000 ANNUAL CAP (MAX) 20% of each commission check goes to EXP until you have paid a total of $16,000 for the year. After that, 100%goes to you until you start a new anniversary year. Transaction Fees still apply. See Next Page ONE-TIME COSTS:
ONCE One time set up fee (includes cards & folders) That's it? Are you kidding me?
PER MONTH Technology fee - includes Skyslope transaction management software and KV Core CRM
PER TRANSACTION COSTS:
EXP UNIVERSITY TUITION Includes 15+ hours of online training per week. Taken out of the 1st closing of anniversary year.
$30 E&O PREMIUM ($40 IN CALIFORNIA)
$25 BROKER REVIEW
SO AFTER YOU CAP... THROW A PARTY! because after THAT you only pay: $250 Transaction Fee at Closing (max $5,000 per year) $25 Broker Review (You GOTTA have that, right?) $30 Risk Management (E&O) Fee- $40 in California ($500 max/year)
for the remainder of that anniversary year!
ADDITIONAL FINANCIAL OPPORTUNITIES 1. REVENUE SHARE Some brokerages offer profit sharing to agents who sponsor agents into the brokerage. EXP offers revenue sharing which is based on commissions earned from selling real estate, not limited by the profitability of any particular market center. This is a HUGE difference in the size of your revenue share check.
SINGLE AGENT REVENUE SHARE EXP pays you 3.5% of the commission earned by an agent you personally sponsor into the company from the company's portion (up to $2800 per year.)
MULTIPLE AGENT REVENUE SHARE Agents also earn residual income from productive agents sponsored by their overall group. For example, if you personally sponsor 5 productive agents into the company, and they sponsor their own productive agents, you can earn up to $3,200 annually for each of those other agents, which represents to up to 4% of the gross commission, with no limits up to seven levels deep. EXP realizes the best way to expand at scale is to incentivize those who help you grow. So agents who attract others into the compare are given an ongoing percentage of the commission of those agents, paid purely from EXP's portion.EXP pays you 3.5% of the commission earned by an agent you personally sponsor into the company from the company's portion (up to $2800 per year.) Happy, successful agents naturally attract other happy, successful agents. As of April 2018, EXP has fewer than 10,000 agents but is growing at an exponential rate. The largest brokerage in America has roughly 170,000 agents. EXP is truly the definition of a ground floor opportunity. One of the best consequences of this system is that agents TRULY have an incentive to help agents they sponsor SELL REAL ESTATE. Isn't that what it's all about?
HOW THE REVENUE SHARE MODEL WORKS
Say you, Ms. Black Suit, introduce Ms. Pink Peplum to all the benefits of EXP as a brokerage and bring her into the company as her sponsor and Ms. Pink sells her first home for $500,000 on a 3% commission.
The total commission is $15,000 From this closing, Ms. Pink pays EXP : $3,000 (20% split) $420 EXP University tuition* $25 Broker Review $30 Errors & Omissions Coverage Leaving her with $11,525 She has now paid $3,000 into EXP and now has to pay in only $13,000 more in total commissions before she caps for the entire anniversary year. *Since first sale of anniversary year
YOU, as her sponsor, receive $525 (3.5% of the $15,000) out of the company's portion, NOT out of Ms. Pink's commission. Since it is her first closing, you also receive 100 shares of stock. You are not her broker or team leader, but you definitely have an incentive to provide group trainings to help her reach her goals of selling more real estate. Everyone wins in this model. $2,800 limit per agent you personally sponsor, per year.
2. OWNERSHIP - SHARES OF THE COMPANY EXP is a publicly traded company (Symbol EXPI) In spring 2018 the company filed to be included in the NASDAQ. In the past year, the stock has increased from $3.00 per share to $13.00 as of 4/6/18
Agents can earn or purchase shares in several ways: AT NO COST: 50 SHARES for the first transaction of your anniversary year, when the $420 fee is paid 100 SHARES to any agent or broker who caps (pays a full $16,000 over the year to EXP) 100 SHARES for each agent you sponsor into the company upon that agent's first closing
AT REDUCED COST: Agents may elect to have 5% of each commission (after splits and fees) invested in shares of the company at a 20% discount to Fair Market Value. In doing so, you are effectively "dollar cost averaging" by buying when the stock is at different prices. This helps you avoid buying a lot of shares at an all-time high for example. NOTE: The number of shares for these milestones is scheduled to decrease as more agents join the company. So there is great benefit to joining EXP sooner rather than later. There is a 3 year vesting period before shares "vest" or belong to the agents. This encourages stability by giving agents an incentive to stay with EXP in order to benefit from the Equity Awards program.
AGENT ICON PROGRAM: Top agents who meet certain production goals and are influencers in the real estate community can earn the icon designation whereby their entire $16,000 cap is given back to them in the form of shares of the company. In this case, 25% of the shares vest immediately, and the other 75% vest in the usual 3 year time period.
3. MENTORING PROGRAM Experienced agents may choose to become certified as mentors, giving a helping hand to new agents in the company. New agents are required to use the mentor program for their first 3 transactions and give 10% of their commission on those deals to their mentor. This provides an excellent opportunity for agents to leverage their experience to help another while also receiving compensation.
FREQUENTLY ASKED QUESTIONS I AM A NEW AGENT. HOW WILL I GET THE TRAINING AND SUPPORT I NEED? EXP offers a mandatory Mentor Program for new agents for at least their first 3 deals. In exchange for mentorship, the agent pays 10% of their commission to the mentor. In truth, this should be the norm in every brokerage. Also, there is a tremendous amount of live and recorded training available in the virtual EXP World. Mentors go through a certification process with EXP to prepare them to guide new agents effectively. Serving as a mentor is also an additional income opportunity for experienced agents.
IF THERE IS NO OFFICE, WHERE DO I MEET CLIENTS? We find most agents prefer to meet clients at the property or sometimes at a coffee shop. But there are times when an office is the perfect setting. EXP provides its agents free access to the business lounges of REGUS office spaces with 3000 locations, across 900 cities and 120 countries. If you need a more private space for a particular meeting, or even designated offices or cubicles are available to EXP agents at a discounted rate.
WHAT ARE EXP'S CORE VALUES? COMMUNITY: Be a good neighbor to create a sustainable legacy FUN: Don't take yourself too seriously AGILITY: Force chaos and change to survive and grow INNOVATION: The best way to predict the future is to invent it INTEGRITY: Do the right thing. SERVICE: Make positive change in our company and local community SUSTAINABILITY: Be a good financial steward of the environment, the organization & our families COLLABORATION: We are all on the same field TRANSPARENCY: Get things out from behind the curtain
HOW DOES THIS ALL WORK IF I RUN A TEAM OR OWN A BROKERAGE? It's easier to understand these concepts as a solo agent looking for brokerage support. The conversation is more complex if you already run a team or own an independent brokerage. Since we first started in real estate, we have owned our own brokerage Absolute Charm Real Estate, LLC so we'll speak from our perspective. The reason EXP caught our eye honestly is because of the people we knew from the Tom Ferry coachingeco-system, and who also owned boutique brokerages, were making the move. These are exceptional agents who value their brand and marketing and who have numerous agents on their teams in addition to support staff. How on EARTH were they making this move with a "team"??
Therefore, our TOP 2 QUESTIONS before we could even THINK of proceeding were: 1. Does your split with your agents change? If you've been on traditional splits, how can you change to 80/20 and still keep the doors open? Who pays what?? 2. We love our branding and marketing. Would we have to change over to EXP colors, logos, etc.? Because that would be a deal breaker for us. Here's how it works! You give up your brokerage, basically, and become a team under EXP Realty. So we will become The Red Door Team, brokered by EXP Realty. (State law varies, but in Washington State, a team must end with the word "team" or "group.") But what about all the cap and split stuff? Let's say you have a traditional 50/50 split with agents on your team. So who pays this 20% of the 80/20 split to EXP? In our case, WE are paying it because we don't want to give our agents a WORSE deal than they had before we joined EXP. We decided the EXP opportunity is valuable enough to us overall that we are willing to pay all the caps and fees for our agents. We believe the value of being able to expand our business, create residual income through revenue sharing, and the ability to own shares of stock in the company more than offsets the fees we will now have to add. So can anyone create a team at EXP and have agents under them? Not exactly. The EXP Team Handbook states that an agent must have closed at least $6,000,000 in volume the previous year and every year thereafter AND must have already hired a non-producing assistant on at least 20 hours per week work schedule. Plus any agents you bring on must agree to pay you at least 25% of their commission (not a problem in our 50/50 example). IF these conditions are met, you may qualify for 1/2 cap status for each team member under you. So you will owe $16,000 from your own production but only $8,000 maximum for each agent under you.
Of course, the $420 EXP University annual fee, the $25 broker review, the $30 e&o insurance, and the $50 monthly fee still have to be paid. In our situation since we have a traditional split with our agents, WE as a company are choosing to pay those fees. Some agents have team members under them who are on a very aggressive (agent friendly) split, and those agents are already paying caps to another large brokerage and will continue to do so at EXP. So everyone's situation is different. Work out an agreement with your team, based on your own specific needs. Agreeing to pay ALL fees for our agents also allows us to maintain the most important mantra throughout the process both for agents AND clients, which is:
IT'S BUSINESS AS USUAL AT THE RED DOOR TEAM REAL ESTATE Our signs will change very little as EXP is very much in favor of agents and teams creating and embracing their own branding. If EXP required us to use their logos, color scheme, etc. we wouldn't be making the move. Period. We honestly feel that one of the main things we, as a company, have to offer is our marketing and branding. We intend to offer complimentary help in branding and marketing to those who sign up with EXP under us. The plan is to create user-friendly templates and design ideas they can access to upscale their image. These marketing items will include templates for signs, business cards, flyers, brochures, etc. Those who are interested in the opportunity and just want to learn more will be invited to a private Facebook group regarding the EXP opportunity. Additionally, those who choose us as their sponsor will also receive access to an additional closed Facebook group where we share training, ideas, plus marketing thoughts and campaigns. It will also provide a community for those agents who want to be part of this movement with us. We hope you will consider joining our group as we strive to improve the real estate experience, both for agents as well as consumers. Let me know how we can help.