Recently eXP Realty has gotten a lot of press, especially on Inman News, and we have agents ask us “Isn’t Realty Partners just like eXP Realty”?
eXP Realty is a great company and in all honesty I wish them much success. There are however a number of key differences between eXP and Realty Partners and I want to point them out below. eXP just passed the 14,000 agent mark. Keep in mind that just a few years ago (2014) they had fewer than 500 agents and the company has been at it now for 11 years.
What makes Realty Partners so much better:
- Realty Partners is agent-owned. Our agents and associates will never own less than 55% (i.e. the majority) of the company. By contrast, eXP is owned by its founders and investors and all their agents put together own a tiny percentage. As eXP grows their stock grants shrink (i.e. the number of shares an agent receives for reaching certain milestones) and even if eXP were to surpass KW in agent count, the agents would still only own a tiny percentage (and will never own the majority) of eXP.In addition eXP stock grants are restricted, non-registered stock that cannot be sold even after they vest without a clearance letter. For more information on their Stock Awards see the EXP Stock Awards Disclosure.Finally – and you can see this again from the Stock Awards Disclosure link above, the earliest agents in eXP got huge stock grants, and as their agent count continues to grow the actual stock grants – the basis for ownership in eXP – shrink dramatically. By contrast, Realty Partners has 4 ownership classes with fixed percentage points, and the qualification requirements for someone to achieve any of the ranks – Partner or Sr. Partner for instance – is the same today as it was 2 years ago and will be exactly the same 10 years from now. This means an agent joining 5 years from now will have exactly the same ownership opportunity, as the very first agent that joined our firm.
- We have true corporate profit sharing. Since our holding/umbrella company is structured as an LLC (taxed as a partnership) we pay out 55% of pre-tax earnings to qualified agents via profit sharing, or once vested as a member in the form of partnership returns. This payout structure is fixed in our charter or operating agreement, and could only be changed by a super majority vote of 75%, meaning no-one will ever be able to ‘pull the rug out underneath our agents.By contrast eXP is structured as a corporation, and if they were to be profitable, then they could (but do not have to) pay out some of the profits in the form of dividends. Of course eXP agents own only a very tiny percentage of the company, therefore, even if dividends were paid, it would amount to only a tiny percentage.
- Our revenue sharing program is far superior. We use a binary plan that pays out to infinity and you only need to recruit 2 agents to start getting paid (down to infinity). By contrast with eXP you must have 5 personal recruits to get paid on level 2 and 10, 15 or more personal recruits to get paid on levels 3 and below. Very few agents will ever recruit 5, 10 or more agents.
- Our CAP is lower and we have CAP Reduction. We have a lower annual Expense CAP and we have a $2,500 CAP reduction for every REALTOR agent recruited (this CAP reduction applies for as long as the recruit remains with Realty Partners). With 6 recruits you are at a permanent 100% with no transaction fees. eXP has a higher CAP and charges transaction fees once you CAP out. eXP also charges a bunch of other fees we do not charge, and again, eXP does not have a CAP reduction.
- We provide a true CINC solution. Our CINC (Commissions Inc) IDX and CRM solution is not a watered down application when comparing to eXP.
In closing, while I certainly respect the tremendous successes achieved by eXP, and while I do expect that they – as a virtual hybrid real estate firm, very much like Realty Partners – will continue to grow, I also know that what we have created at Realty Partners – a true ownership opportunity, with majority ownership by our agents and associates, and an agent centric business model that is not designed to maximize profits for the founders, insiders and investors, but rather solely for the agents as partners and stakeholders – is unlike anything this industry as ever seen.
Realty Partners was designed from ground up to create a true paradigm shift – creating a business model that is 100% agent centric and that puts majority ownership with the agents and associates, giving them a true ownership and partnership opportunity. eXP has done a great job branding itself (with the support of paid Inman PR & exposure) as the “virtual cloud brokerage” with a sexy ‘agent ownership’ hook. Virtual and Virtual Hybrid models such as eXP and Realty Partners, and REAL and many others here now, or launching soon, are without a doubt “the way of the future”, and neither anything special or revolutionary. Even KW just launched its own virtual brokerage model.
What is however new and revolutionary, is a business model that puts agents in the position of ownership, in a structure that closely models that of traditional law firms or consulting firms.
If you are a REALTOR agent looking to take charge of your business then please check our Realty Partners. We are growing rapidly and will start expanding nationwide in 2019.
To Your Success!
Thomas Heimann, Founder & CEO
Lic. Real Estate Broker, REALTOR ®
The Agent Owned Company™
We Help Agents Make More Money and Be More Successful!
1680 Fruitville Rd #332, Sarasota, FL 34236
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