Why I Left eXp Realty

Why I left eXp Realty

I was with eXp Realty for nearly 6 years. I think I should first mention that it is the second best real estate company out there. Without question. And the founder, Glenn Sanford was a genius in creating his vision.

It’s difficult being the first through that brick wall and creating a new type of business model. eXp Realty did that. And they were rewarded with it being one of the fastest growing and now largest brokerages in the country.

But here is the thing. While being first gives you advantage as first to market, it allows others to look at your business model and put together a business plan that perfects the imperfections that you couldn’t account for in the designing phase. And that is what Real Broker did.

I was an EXTREMELY happy agent at eXp. Heck, I was on the agent advisory council. I loved the company. So what were the reasons and advantages of Real Broker that got me to leave eXp Realty?

I am going to list them out. Mind you this is my opinion and what I saw. I implore you to do your own research and see if that is the case for you too. And if you have questions, then please feel free to reach out… Confidentially of course.

I am a numbers and cents guy. So the financial part of it was the first thing that piqued my interests.

The first thing I saw was that the cap was less. It is $12,000 compared to the $16,000. Frankly, it’s not end of the world money and $4,000 was not enough of a reason to leave eXp. But the half cap for a team member goes from $8,000 to $6,000 per year. I felt this would be helpful in recruiting new team members to the team.

But also what was nice is that the percent going to the cap is less. It is 15% at Real Brokerage compared to the 20% at eXp Realty. I generally pay off my cap in one month at eXp. So this wasn’t really a big deal for me personally. But for agents on my team… That extra 5% can make a huge difference… Especially for those new agents who are looking to get established. Ultimately I saw this as something that would help me recruit new team members and be more competitive than my competition.

I also liked how Real Brokerage didn’t have a monthly fee like eXp Realty does. eXp Realty charges an $85 per month fee. Real doesn’t charge a monthly fee. They charge $750 per year. The $750 is paid for in the first three transactions with Real taking $250. Again, the $270 yearly difference is short money and not something I really lost sleep over. But this is HUGE for a new agent. Having  to pay a monthly fee can be the difference between someone joining your team and joining a conventional brokerage. So again, another competitive advantage is ultimately what is the most difficult part of team building… Recruiting! The other reason that this stuck out to me is that we pay for my wife to be an agent on the team. We do this just in case she needs to step in when I am in a jam. She has a harder job than I do in being a stay at home mom… But paying $1,020 a year for just in case has always annoyed me a little.

All of these financial things weren’t enough to make me move… But when I started noticing it… They really started adding up. At this point… I am at more than $5,000 savings per year. Not the end of the world money… But $5,000 is a chunk of change!

eXp and what they did for agents with the rewards of stock and the ability to buy stock at a discount per deal was game changing. While revolutionizing the business… They also helped us agents do something that a lot of us are awful at… Build a nest egg so we can retire someday!

In my time at eXp Realty, my stock rewards and my stock purchases at discounts have a six figure evaluation. That’s in six years. My mom was an agent who got into the business in 1989. She still works today. I can guarantee that her life would be a lot different if she had gotten stock rewards instead of vacation trips and if she was able buy stock at a discount from 1989 to today… I can’t even begin to imagine the amount of millions of dollars she would be sitting on.

What eXp Realty did for us agents should never be discounted. They changed the way the business operates and the way that us agents can build wealth and provide for our family.

But like the other financial aspects, Real Brokerage took what eXp had and perfected it.

As an agent you get shares once you cap. The amount of shares you get when capping will dilute as the company grows. So let’s just call this one a wash. But you earn $16,000 when you hit the Elite Agent Stock Award. That is compared to the $8,000 at eXp Realty.  Now eXp Realty touts a $16,000 award, but in my mind it is really $12,000. You earn the additional $4,000 by giving back to the community. So that is where I calculate the $12 grand. The other four thousand comes if you go to eXp events. You are going to spend more than $2,000 per event if you go to an event in Vegas or Orlando… So I really don’t call this a win. Like I said, it’s really $12,000 at eXp.

So ya, the $16,000 with no hoops to jump through is nice. But you can actually earn up to $24,000 by giving back to the REAL Community. If you teach in their learning center one time per month for 12 months, then REAL will give you an additional $8,000.

We were at $5 grand before the stock rewards. Now add in another $4 grand in additional stock and now we are up to $9,000. But I have always been active in the real estate community that I am a part of… So that is really an additional $8,000 for a total of $17,000 more per year.

Okay, now it’s really starting to add up.

Then there is the Agent Stock Purchasing programs. This until recently was almost equal… But eXp just made their program a lot more attractive. They reduced the discount of shares you could buy to 5% from 10% previously. This was actually one of the main factors as to why I left.

So let’s say it is a $10,000 commission. Then that means you could buy $550 of stock for $500. With the adjustment, that turns out to be $525 of stock for the same $500.

At REAL, you can commit the same 5% of your commission and they will reward you 10% of additional shares for free for an agent that has not capped. It gets better for capped agents. A capped agent can commit up to 10% of their check and receive 20% of additional stock.

So the same $10 grand commission. You get  $50 in free stock if you have not capped and $100 if you have capped. This is compared to the $25 at eXp. And if you are an elite agent you could actually max that out at $200 in additional stock.

This is a huge win for us agents trying to build our retirement account. Because I don’t know about you… I don’t want to be doing this forever!

How the Revenue share works also makes more sense at REAL. And it’s so simple. You recruit someone and they cap, then it’s $4,000 for tier 1, $3,200 for tier 2, $2,400 for tier 3, $1,600 for tier 4 and $800 for tier 5.

It’s not 7 levels with the biggest contributor being in the 7th level. At eXp, my 7th level guy was Brent Gove. The number 1 recruiter in the company. I capped out each of the six years I was at eXp which means he earned $4,000 per year or $24,000 during my time at eXp. The issue is he has 10s of thousands of agents in his downline. I mean nothing to him on the 7th level.

At REAL, the person who recruited you gets the most value of your production and then the person that recruited them gets the second most value. Well who is your relationship with? Who is the one that is most likely to help you? It’s the person you know and trust and now at REAL… The person who is the most financially rewarded on your success. This just makes so much sense.

The person who is most rewarded for my continued success and growth is the person that recruited me… Not the guy who I have never spoken to and that I am literally just one of tens of thousands…

REAL also has the ability for a person to have two sponsors. Yes, it’s true. REAL takes a 10 percent haircut for this off the top… But who cares. I literally lost friendships at eXp because one person chose me as a sponsor or chose someone else.

A relationship is far more important than some money… But at REAL you kind of get to have your cake and eat it too!

Then there is the big one. The biggest knock against eXp is what I call downline silos. The company is coordinated by what downline you are in. There are a couple major downlines and these major downlines offer different values. Some have this training, heck some even have a special conference. It creates an atmosphere of division. The result is an atmosphere of internal competition instead of community.

It’s single handedly the biggest flaw of eXp. That is why who you pick as a sponsor at eXp matters SO much. And they tried to fix it, but essentially it was too little too late. The ship was already too big. They couldn’t turn quick enough to not hit the iceberg.

REAL doesn’t have these silos. What a person offers to one, they must offer to all. Otherwise it’s adios. Goodbye. It creates a better sense of community between this and the ability to have dual sponsors. People are more willing to share and when they share… They share it with everyone!

And here is where I think the most upward potential is for the company for us producing agents. It’s in the stock price. But why do I see that upward potential?

It comes down to a genius move in creating a financial tech product which is called REAL Wallet.

But before I get to the REAL Wallet part, all those small amounts of money here and there added up to nearly $19,000 per year. 3 young daughters… The compounding of $19,000 means that college education for all of them is covered. And there may be a bunch left over for my wife’s and my retirement!

But back to the REAL Wallet. The REAL Wallet which consists of the REAL Debit Card and REAL Credit Card will change the relationship between company and agent. An agent at REAL can have multiple streams of income. From real estate commissions, revenue share, stock rewards and joint venture quarterly payouts.

With REAL Wallet, all of these streams of income will funnel here. Now you can have it so they immediately go to your personal bank account or maybe a percentage does. That’s up to you. But what are the benefits to us agents?

First, funds in the REAL Wallet will earn interest. Second, you can use funds in this account using your REAL debit card. And when transactions are made, an agent will earn points that can be used to offset transaction fees, caps and other costs at REAL. Most likely you get zero benefits right each time you swipe your debit card.

Then there is the REAL Credit card. Agents are able to access capital based on their holdings in things like past transactions, equity in REAL, Revenue Share and any Joint Venture Income. Essentially REAL uses these assets as collateral to extend lines of credit to their agents.

So why is this so important? Aside from the obvious of being able to access capital and get rewards for something we do already… Financial services companies are generally valued at higher multiples than Real Estate companies.

This is why Compass and Redfin try to pass themselves off as tech companies. It’s to try to fool Wall Street into giving them a higher valuation.

Banks sell for higher multiples than real estate companies. A blend of the companies should provide a higher return on the stock price and thereby an opportunity to dramatically grow wealth and protecting our families future by doing something we do everyday… Selling real estate.

Essentially I believe that this stock growth could help be the difference of living a comfortable life and an extravagant life in my older years.

It would be a pleasure to talk to you more about the benefits of REAL in a one on one confidential conversation. It was the right decision for me. In the end it very well may not be the right decision for you. I get that. Just hear to give you the facts so you can make the best decision for you and your family.

All my contact information is below.

Until next time.