In the third quarter, eXp World Holdings, the parent company of virtual brokerage eXp Realty, raised its revenue to $48.1 million, an increase of 203 percent year over year. Overall the company booked a net loss of $7.8 million for the quarter, down from a $14.6 million net loss the year prior.
In a year’s span eXp’s agent and broker count increased 173 percent for a count of 4,952 in the quarter ending Sept. 30. With the current count at around 5,600, eXp World Holdings CEO and chairman Glenn Sanford expects to raise that number to between 6,300 and 6,500 by the end of the year. EXp Realty incentivizes its agents through company stock to recruit others and market the “cloud-based” brokerage.
The rising revenue figures have been driven by agent productivity, Sanford said, as the company’s revenue is generated almost exclusively by agent commission. EXp Realty offers agents an 80/20 commission split, which is then capped at $16,000 on the first $80,000 gross commission income. After that agents earn 100 percent for the remainder of the anniversary year, but transactions fees apply.
“Untethering” some of the big teams from Keller Williams (KW), Re/Max and Coldwell Banker helped eXp Realty attract agents in the third quarter, according to Sanford.
“What’s giving us the lift is the recruitment of highly productive teams,” he said. “They are bringing on agents that are being held accountable to generate leads; they are more productive agents.”
Sanford said the company is developing a new “mega icon team” payment model to cater to larger teams of 10-plus. With built-in technology to support associates across the country, eXp is already supporting a version of what’s come to be known in real estate as expansion teams, a model pioneered by Keller Williams. Sanford himself formerly ran a KW mega agent team from 2004 to 2007, just a couple years before he launched eXp, according to his LinkedIn profile.
Expansion teams aim to maximize their reach by connecting agents spanning states through systems and training. The models between KW and eXp differ in the companies’ setups: franchisor (KW) versus virtual brokerage (eXp). The eXp platform teams can “plug in” agents in different parts of the country, Sanford said. KW’s expansion teams connect agents via existing Keller Williams offices throughout the country.
EXp Realty, which expanded into Mississippi and Ontario, Canada, in the third quarter, has five more states to go before it has a presence in all 50 states. Sanford would also like to spread further into Canada with his eye on markets such as British Columbia.
The chairman added that eXp would be working on improving the consumer experience in 2018.
“Right now we use (vendors such as) Commissions Inc. and Kunversion, public-facing websites — which are great companies — but in order for us to deliver an experience for the consumer, we’ve got to get out of vendor relationships or have the vendor be more responsive to what we need,” he said.
It remains to be seen whether eXp will continue to rely on vendors or start developing its own technology.
The company, which lost its president and general counsel Russ Cofano when he resigned in late July, made three senior appointments in Q3: Mary Frances Coleman as COO; Vicki Olafson as VP of employee experience; and Macie Hawkes as general counsel.
Sanford indicated more senior hires were to come, with the exact positions still yet to be determined based on the talent they find.
“With the speed that we are growing we need to put more high-caliber people in the field,” he said.