There are no two ways about it - real estate agents have to work hard in order to be successful in the property market. Budding agents must take a compulsory real estate license exam and it could take them years before gaining the necessary experience to successfully navigate the highly dynamic property market.
And then after all of their hard work, many agents end up handing up to 50% of their commissions directly to their brokerage. Doesn’t seem exactly fair, does it?
The good news is, not all brokerages work this way. Today, we’re here to discuss one in particular that gives agents more of their hard-earned cash. This is your ultimate guide on understanding the eXp Realty commission split in 2024. eXp Realty is a dynamic property brokerage firm that has been making waves in the industry, and understanding its unique commission structure can help you weigh up whether you’re getting what you need from your brokerage.
Overview of eXp Realty
eXp Realty is a trailblazing brokerage firm that has made substantial waves within the industry since its inception in 2009. Founded by Glenn Sanford, a seasoned property market professional and visionary entrepreneur, the company was established with a core belief in leveraging technology to the advantage of both agents and clients.
eXp Realty is renowned for its innovative business model, which is built around a cloud-based platform instead of a traditional brick-and-mortar office environment. This virtual model gives agents and clients access to robust tools, training, and collaboration opportunities without the geographical constraints of a physical office.
eXp Realty Impacts
The firm boasts over 86,000 agents across the globe. It operates in multiple countries, including the United States, Canada, the United Kingdom, Australia, and South Africa, with plans for continued global expansion. In 2020, the company generated over $1.8 billion in revenue, a testament to its effective model and widespread adoption by professionals.
eXp Realty's achievements haven't gone unnoticed in the media. Inman News, a leading property news source, has frequently covered the company's innovative practices and rapid growth. Forbes also highlighted eXp Realty in their 2018 list of "Real Estate Rockstars." Further, the company's cloud-based approach has been featured in tech-centric outlets like GeekWire, underscoring its unique position at the intersection of real estate and technology.
What are Commission Splits?
Before we dive deep into the specificities of the eXp Realty commission splits, let's take a moment to familiarize ourselves with the concept of commission splits.
A commission split is the division of a commission paid by the seller between the listing and buyer's agents. When a property is sold, the seller pays a set commission, which is then divided according to the agreed-upon split. This split can be influenced by various factors, such as the brokerage's policies, the agents' experience, and the complexity of the transaction.
In other words, it's not just about the total commission rate - it's also about how that commission is split. How commissions are split is why we should keenly focus on eXp Realty. The firm offers a unique minimum commission split formula that has been lauded to be fair for agents. Some sources have argued that this split formula has been one of the driving factors of the company’s growth.
While the eXp Realty commission rate remains competitive within the industry, the way they split the commission is particularly appealing to many professionals. The brokerage firm has designed its commission splits to provide optimal benefits to its agents.
What’s The Difference Between Real Estate Commissions and Fees?
Commission fees are separate costs that agents need to account for. While the commission split outlines the division of income, the commission fees are specific costs charged by the brokerage for the services they provide.
Understanding the basics of eXp Realty commission splits and fees enables an agent to be better equipped in navigating the financial aspects of your transactions. Let’s delve a little deeper into the specifics of eXp Realty's commission structure in 2024.
eXp Realty Commission Splits in 2024
eXp Realty has garnered a reputation for its innovative approach, which extends to its commission structure. Unlike traditional brokerage firms that often require a 50/50 split, EXp Realty offers a more agent-friendly structure. The eXp Realty split stands at an appealing 80/20. This means agents retain 80% of the commission, with the remaining 20% going to the brokerage.
However, there's a cap to this commission rate. Once agents have paid $16,000 to the brokerage in a given year, they get to keep 100% of their commissions for the rest of that year. This model is an attractive incentive for agents, making eXp Realty a popular choice for many professionals in the industry.
While the commission split is certainly enticing, agents must also account for some additional costs. These include a nominal transaction fee and a small technology fee, which covers access to cloud-based software, marketing tools, and training resources that the company offers.
The combination of a favorable commission split, a yearly cap, and relatively low fees makes eXp Realty a compelling choice for professionals looking to maximize their income.
eXp Realty Fees For Real Estate Agents
After understanding the commission splits, it's crucial to also grasp the additional fees associated with working under this brokerage firm. These fees form an integral part of the eXp commission split and fees formula and all agents are required to factor the fees in their transactions.
In any real estate transaction, there are additional costs to the commission. For agents, working with a brokerage firm often means incurring various fees. These could be for services such as access to office space, technology tools, advertising, training, and more. All brokerage firms, including eXp Realty, have a unique fee structure, which complements its commission split.
Some eXp fees include a technology fee for access to eXp Realty's state-of-the-art cloud-based platform and a transaction fee to cover administrative costs. There's also a small annual fee for the use of eXp World - a virtual world for networking and training.
eXp Realty Fees in 2024
When considering the eXp commission structure, these fees, while they are additional costs, provide agents with resources and benefits that could be significantly more expensive if purchased independently.
Startup Fee
eXp Realty charges a one-time startup fee of $149. This fee covers the initial costs of setting up an agent with the company and provides access to various resources like business cards, a name badge, and more.
Monthly Fee
Agents are charged an $85 monthly technology fee. This fee provides access to eXp Realty's cloud-based office environment and a suite of cutting-edge tools, including a Customer Relationship Management (CRM) system, marketing resources, transaction management software, and more.
Broker Review Fee
For each transaction, agents are required to pay a $25 broker review fee. This cost ensures each transaction is reviewed by a broker for compliance and accuracy, offering an added layer of protection for both agents and clients.
Risk Management Fee
A $40 risk management fee is charged for each transaction until the agent hits the annual cap of $500. This fee contributes to a risk management fund that helps protect agents from potential liability issues.
University Tuition
EXp Realty charges an annual fee of $149 for access to eXp University. This platform offers continuous learning opportunities with a plethora of training resources and educational programs, helping agents stay ahead in the ever-evolving industry.
Healthcare Fee (Optional)
Agents can choose to pay a fee to gain access to the eXp Realty healthcare marketplace, which can help them find suitable healthcare coverage.
eXp Realty Mentor Program Fees
New agents with fewer than three transactions in their current market are required to join eXp Realty's mentor program. In this program, a certified mentor is assigned to assist the agent with their first three transactions at eXp Realty. During these initial three transactions, mentees pay an additional 20% commission split, which covers the mentor's compensation and the cost of the mentor program (including extra training modules for the mentee). Upon closing three transactions with eXp Realty, mentees graduate from the mentor program and are no longer subject to the additional 20% commission split.
eXp Realty Personal Transaction Fees
At eXp Realty, agents can conduct up to three transactions per year without paying the usual 20% commission split to the firm. For these personal transactions, agents only need to pay a $250 transaction fee, a $40 risk management fee, and a $25 broker review fee. A personal transaction is defined as a deal in which the eXp Realty agent is personally listed on the contract.
The payment of these fees provides several benefits to eXp Realty agents. They gain access to a state-of-the-art technology platform (kvCore), high-quality training resources, a global network of agents, and tools that can help them grow their business.Furthermore, the fee structure also includes safeguards like transaction reviews and risk management, which can offer substantial value and peace of mind. In comparison to the overheads associated with running a traditional real estate business or the fees at other brokerages, the costs at eXp Realty are minimal and directly tied to value-added services.
Team Leader Fees at eXp Realty
As a team leader at eXp Realty, you can choose from three team structures: self-organized, standard, or mega-ICON.
1. Self-Organized Team
The self-organized team is the most informal structure at eXp Realty. Simply submit a team roster to eXp Realty, allowing any agents, including yourself, to market as part of the team. Each agent faces a $16,000 commission cap and pays an individual $85 monthly fee. You can distribute commissions per transaction as needed.
2. Standard Team
The standard team structure at eXp Realty is more formal than a self-organized team and requires a team agreement. The team leader must also achieve a production requirement of $6,000,000 in gross commission income from the previous year.
In this structure, team agents benefit from a reduced commission cap of $8,000 instead of the regular $16,000 cap. However, the team agent must share 25% of each closed transaction with the team leader.
3. Mega ICON Team
The Mega ICON team consists of ten or more agents, each receiving a quarter cap of $4,000. The Mega ICON team leader must ensure a minimum of $56,000 in company dollars is paid into the company by the end of the year. This amount includes the $4,000 cap for each of the ten agents and an additional $16,000 for the team leader's cap.
Comparing EXp Realty Commission Split and Fees with Other Brokerages
One way to truly appreciate the value of the eXp Realty commission split is by comparing it with the commission structures of other major brokerages. This comparison can shed light on the industry standard, helping agents decide where they can maximize their earnings.
Typically, traditional property brokerages operate on a 50/50 commission split. This means the agent and the brokerage split the commission equally. When compared, the eXp Realty split of 80/20 is considerably more advantageous for agents, allowing them to keep a larger portion of their hard-earned commissions.
When we consider the commission rate and its yearly cap of $16,000, the brokerage becomes even more appealing. After an agent has paid this cap, they receive 100% of their commissions for the rest of the year. Most other brokerages don't offer such an incentive.
While the brokerage does charge certain fees, they are fairly minimal. Traditional brokerages often have higher fees or additional costs, such as desk fees, that eXp Realty does not charge. Nominal technology and transaction fees at eXp offer value for the price by providing agents access to innovative tools and resources.
eXp’s ICON Agent Program
eXp Realty gives its agents a chance to earn back their $16,000 cap through the ICON Agent Program. The firm allows its agents to qualify for the program in either of two ways depending on the productivity of the agent.
- An agent could qualify by having an additional cap of not less than $5,000 in transaction fees over the additional $16,000 cap in transactions over the same year.
- Secondly, agents can qualify to achieve ICON Agent status by attaining an annual gross commission income of $500,000 or more with a minimum of 10 closed transactions.
Essentially, this formula incentivizes agents to be innovative in closing more deals and generating more revenue for themselves and the firm. The $16,000 can is usually recouped through the eXp stock program.
EXp’s commission splits and fees can get a little complicated for new professionals. But, ultimately, the formulae are optimized to ensure maximum productivity from the agents. Simply put, the more innovative you are at closing deals, the more revenue you generate for yourself and the firm.
The firm also has a number of programs and resources that help players in the property market achieve success. New agents and seasoned professionals looking to gain a deeper understanding of eXp Realty and the maximum and minimum commission split formula can consult Icons of Real Estate for free!
Icons of Real Estate is a growth platform for real estate professionals powered by one of the best SEO agencies in the business. We work with the nº1 eXp team in the USA and Canada. Our mission is to empower real estate professionals to reach unprecedented levels of success and become industry icons. Curious to learn how we can achieve this together? Schedule a consultation with our team of experts today and get ready to watch your sales grow!
5 Frequently Asked Questions about eXp Realty Splits
Alongside the eXp realty commission split, there is a cap system in place. Once an agent has paid $16,000 to the brokerage within a year, they reach the cap and then keep 100% of their commissions for the remainder of that year.
The eXp Realty commission fees include a monthly technology fee, a transaction fee (including a broker review fee and a risk management fee), and an annual university tuition fee. Each of these fees provides agents access to certain benefits and resources essential for their business.
When considering the eXp commission split and fees, the brokerage offers a more lucrative package compared to many traditional brokerages. With a competitive 80/20 commission split, a cap on the commission paid to the brokerage, and relatively low fees, eXp Realty tends to be more attractive for agents.
The eXp Realty compensation plan includes the commission split, the cap, and various fees. These make up the commission structure and contribute to the earnings and costs for an agent. The compensation plan is designed to maximize an agent's income while providing them with valuable resources and support for their business.