In 2020, real estate professionals across the U.S. were forced to go virtual as the coronavirus pandemic spread across the country. That meant signing up for Zoom accounts, wrangling teams from afar and trying to maintain relationships with phones and laptops. It was a major challenge for many.

But there was one major real estate company that long before the pandemic had already fully committed to a virtual experience: eXp Realty.

EXp is an unusual company on several fronts. Most famously, it doesn’t open brick-and-mortar offices, instead opting for a 3D virtual world. Inside the virtual world agents use avatars to interact with each other.

Beyond the virtual world, eXp has an aggressive agent-led recruiting program that has seen its ranks swell in recent years, a stock program, unusual-for-real estate benefits packages and other distinguishing features.

To get a sense of how well eXp’s unique characteristics served it in 2020, as well as what to expect in 2021, Inman reached out to both company insiders and outside observers. And the general consensus was that, despite some industry-wide bumps, eXp’s strategy seemed rather prescient in 2020. In a world where remote work and social distancing reign supreme, in other words, it’s good to be a company with an existing virtual infrastructure.

Moreover, the industry members who spoke to Inman expect eXp to continue thriving into 2021 thanks to strong recruiting efforts and the competitive advantage of its virtual orientation.

Here are four specific things to watch out for:

Agent growth

EXp passed 40,000 agents earlier this month. In a conversation with Inman, company CEO Jason Gesing, attributed the company’s success at growing its agent count to the agents themselves.

Jason Gesing

“Our agents are incentivized pretty heavily to go out and help us grow by bringing in other productive teams,” he said. “That really has been the growth story.”

During Inman Connect Now last week, Gesing also cited agent ownership — members of eXp get company stock incentives when they hit various milestones — as contributing to the firm’s growth.

Looking forward, Gesing said eXp’s goal is to get to 100,000 agents. Though there isn’t exactly a fixed timeline for hitting that target, Gesing did say that because agents themselves are driving the growth, “in theory there’s potential for tremendous acceleration.”

That’s a lofty goal, but outside observers seem to think it’s obtainable. Steve Murray, a consultant and founder of Real Trends, told Inman that he doesn’t “know of any particular reason why they can’t keep growing.”

Steve Murray

“I could see eXp growing to 100,00 agents in the U.S. and Canada,” Murray continued. “They seem to have some really good systems in place to continue to attract agents and teams.”

Murray suggested that it could take three years or more to reach that benchmark, and that as the company gets bigger it may take longer to double or triple in size. Still, he was generally bullish about eXp’s agent recruiting efforts, saying that the firm seems to have mastered an approach that legacy brands like Keller Williams and RE/MAX excelled at in the 1980s and 1990s.

“They understand, at heart, that recruiting, if you’re going to be successful, you’ve got to have a consistent, persistent recruiting system,” Murray said. “EXp has proven so far to be very good at that.”

Morgan Carey, CEO and founder of real estate technology firm Real Estate Webmasters, agreed that eXp could grow to 100,000 agents in the next several years. But he also said that growth could become more challenging if the company turns to less experienced agents.

Morgan Carey

“I think eXp is very successful at targeting successful people,” Carey said. “But as you start attracting more entry-level agents they don’t have the skill set or the experience to market in the same way.”

Joining eXp could also potentially be challenging for agents themselves.

Colin Cameron, an eXp agent in Pennsylvania, told Inman that he loves working for the company in large part because it mostly leaves him alone to do business in the best way he sees fit. But he also joined eXp as an experienced agent with an established client list. Less experienced real estate professionals, on the other hand, may have a harder time adapting.

“EXp is not for everybody,” Cameron said. “If you’re a brand new agent, it is harder to adapt to. But if you’re selling 30, 40 homes a year you’re missing out.”

The company can of course continue to focus on high-producing and experienced agents for now, but these comments do highlight some of the obstacles it may eventually have to overcome if it pursues a strategy of growth indefinitely.

In any case though, Gesing also envisions a day when eXp may actually have more agents outside the U.S. than inside.

“It’s not hard at all to envision a scenario in which we have more international agents,” Gesing noted.

International expansion

Just this fall alone, eXp has expanded into India, South Africa, Mexico and — as of last week — France. But Gesing told Inman that such rapid international expansion wasn’t initially on the agenda for 2020.

“At the beginning of the year, we thought we’d go into two more countries, maybe three,” he said.

The question of international expansion for eXp is actually tied up with agent growth. Gesing explained that the company’s moves into new parts of the globe have been driven by existing eXp agents knowing someone overseas, and recruiting them. During Connect Now, Gesing also noted that the company didn’t actually send staffers into these new countries as it expanded; because eXp focuses on remote work, it never needed boots on the ground to get, say, an office up and running.

Similarly to agent growth, no one who spoke with Inman foresaw major obstacles ahead for eXp’s international growth. That means if all goes well for the company, in 2021 observers can expect multiple international expansion announcements.

Gesing declined to say specifically which markets eXp might be eyeing, though he did indicate that there are some new locations currently on the radar.

Stock performance

In mid March, when the pandemic was wreaking havoc on the economy generally, shares of eXp parent eXp World Holdings were trading at around $7. That was down from the $20 range in mid 2018, and from the $11 range in early 2020.

But eXp has benefited more than most from the stock market’s recovery.

Beginning in April, the price of shares in the company have been rising exponentially and as of last week were trading at more than $76 — over ten times their price from earlier this year. EXp currently has a market cap of over $5 billion, and this explosive growth has been a major boon to stock-holding agents.

“We get stock awards, and as the company grows I grow too, literally,” Cameron said.

Credit: Google

Much like agent growth, stock is a central part of the eXp story. But it’s curious that the company’s overall value is now many times that of larger and more established firms like Realogy, which currently has a market cap of about $1.76 billion. It’s a similar situation to the auto industry, in which newer and ostensibly smaller Tesla has a higher value than Ford, which makes and sells more cars.

But Murray said that investors in companies like eXp — or Tesla for that matter — are betting on future growth. And Murray thinks there’s significant opportunity for eXp to keep growing its earnings and value in large part because being a virtual company means having a leaner operation.

“I expect their earnings to keep growing well above average for some time,” Murray said. “Their earnings can keep growing very solidly because as they keep growing their fixed cost don’t grow at the same time.”

That doesn’t necessarily mean everyone should or should not go out and buy eXp stock, but it does mean that looking forward into 2021 the company at least has the potential to outperform firms that have to pay for things like office space.

The virtual environment

Agent and stock growth notwithstanding, eXp is probably most famous for its virtual work environment. That environment, which is a product of subsidiary VirBELA, includes virtual meeting rooms, training facilities and even recreational venues like soccer fields. For users, the space is akin to video games like the Sims.

Gesing told Inman the virtual environment has been a key to the company’s growth, explaining that among other things there are now dedicated spaces for agents in international markets.

But others who spoke with Inman also indicated the virtual environment represents opportunities for eXp to mature. Carey, for example, said he’d like to see the company refresh the virtual environment in the same way it has refreshed its branding in the past. He is not necessarily a fan of the way the virtual world looks right now, and said that in its current iteration its “very hard to feel high end.” He’d ultimately like to see the environment mature as the company grows in the near future.

“They’re growing up as a company,” Carey added.

An image from eXp’s virtual world, as demonstrated during Inman Connect in January 2020. Credit: Jim Dalrymple II

There’s also an open question over exactly how much value the virtual world adds and to how many agents. Cameron, the agent in Pennsylvania, spoke positively about the online environment and described having an issue with some documents that he was able to resolve quickly by popping into a virtual room where he could get assistance. It was an interaction that highlights the significant strengths of the VirBELA system.

Colin Cameron

But Cameron also said that in general he is a “light user” of the virtual world.

“I might go in there once a month,” he explained.

Murray also said the virtual world is important to eXp’s identity, and that the company was smart to have built out a system that paid dividends during the remote work environment of the pandemic. But he went on to argue that a virtual work environment doesn’t automatically make people feel like the company cares about them.

“You have to pay attention to how you’re communicating with your people,” Murray said. “How are you going to communicate that you care about these people? That’s going to be their biggest challenge.”

Gesing himself hinted at this challenge as well. Though eXp doesn’t maintain brick-and-mortar offices, it does typically hold in-person conferences. This year, however, those events went online due to the pandemic. The events were a success and thousands attended, but Gesing said that the lack of face-to-face interaction was challenging.

“To be unable to do that this year, that was a challenge,” he said. “And I think it probably impacted growth for sure.

Indeed Gesing also argued during Connect Now last week that a key to making remote work viable is facilitating the casual interactions that happen in an office. Or in other words, to make remote work feel less remote.

There’s no doubt eXp has been ahead of the curve on this issue, and indeed Gesing said that between 60 and 70 percent of the company’s agents log into the virtual world at least once a month. But the point is that people do still long for face-to-face interactions, and eXp will have to continue working to figure out how it can facilitate, or replicate, those interactions.

That’s a challenge eXp will face going forward, though Cameron, among others, was optimistic that the company’s prior work will set it up for success in 2021. And he added that the opportunity for a virtual work environment will likely only appeal to more and more agents as time goes on.

“I very much think 2020 was the year for eXp,” he said. “It showed a lot of agents you don’t need brick and mortar to succeed.”

Email Jim Dalrymple II

eXp Realty
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