The Real Estate Company of the Future Is Here
eXp Realty’s all-virtual infrastructure and generous compensation plan proved resilient in 2020
No one could have predicted the upheaval that 2020 would bring. And while eXp Realty Founder Glenn Sanford couldn’t have known to prepare for a global pandemic, he did know to prepare for uncertainty. As an entrepreneur with a background in real estate, Sanford led and worked in the midst of the dramatic stock market plummet of 1987, the economic worries following the events of September 11, 2001, and the housing crash of 2008. It’s not a matter of when the unpredictable happens in business; he’s learned, but when.
“Every ten years, something happens that changes the backdrop of the economy,” Sanford said. “We knew at some point that something would happen, so we prepared ourselves to survive both in good times and in bad. That was really what we thought about: How do we make sure we future proof the business?”
That preparation came in the form of building a virtual eXp Realty world for real estate agents and team members to work within. This digital infrastructure operated leaner, with more flexibility, and without the budget-draining overhead costs of a brick-and-mortar headquarters or chain of satellite offices. Working remotely was slowly becoming a trend when the company launched in 2009. Still, Sanford went all in, choosing to operate on an entirely virtual platform called Virbela, which the company eventually acquired in 2018.
So, while other companies were scrambling to teach their workforce how to log on and work from anywhere in 2020, the daily operations of eXp Realty were simply business as usual—a rhythm honed through more than a decade of practice.
“With the backdrop of COVID, our business didn’t miss a beat,” Sanford says.
The eXp Ecosystem
Knowing how to work together while apart, to collaborate and connect across the digital miles, is a skill the eXp Realty team perfected years ago and has become one of the company’s most well-known attributes. Agents and brokers and the company’s wide-ranging support staff positions are almost never in the same room, yet seamlessly working together. What’s more, agents have access to all departments, making everything from IT problems to contract assistance a team effort.
“The more people in the same ecosystem who are collaborating, the more valuable that network becomes,” Sanford says. “Collaboration for us has been, in fact, the hallmark of the eXp ecosystem. We are all aligned in the way we approach compensation for agents and brokers, the way we have made everyone a shareholder. All of that is in service of encouraging collaboration and community.”
And that community keeps growing. In the years between 2015 and 2018, the company grew over 100 percent, year-over-year. Since then, the percentages have decreased, but the exponentials have become greater. In 2019, eXp agents totaled 25,423. In 2020, that number grew 63 percent, reaching 41,313. In the first quarter of 2021, agent count grew 77 percent year-over-year to more than 50,000 agents.
The company’s now more than 50,000 agents have also increased the company’s revenue and volume in tandem. In the fourth quarter of 2020, eXp Realty experienced record revenue of $609 million, a 122 percent increase over the previous year, and record-setting annual volume, with an 89 percent increase in residential transaction volume, totaling $72.2 billion, compared to $38.2 billion in 2019.
In its early years, this level of momentum created a charged energy, as the leadership attempted to “build the rocket ship while flying.” Today, the company has found a new, more stable stride.
“Since late 2018, we’ve really upgraded our team and stayed ahead of the growth,” Sanford says. “We had to really invent our way to scale because no one had really scaled this fast in the history of real estate. Any system built pre-eXp was not designed to scale as fast as we scaled.”
Reinventing Real Estate Compensation
Sanford’s approach to real estate comes from his firsthand experience of the needs and challenges that real estate agents face. Before launching eXp Realty, he spent the early 2000s working for a traditional real estate agency, where he closed more than $60 million in deals. In spite of his success and bringing more than 180 people into the company he was working for, his income level was nowhere near what he had envisioned. Each year he watched as a large portion of the revenue he brought in had to be handed over in desk and franchise fees—money that he had discovered, courted and delivered—and then witnessed it dwindle under the franchise owners’ poor money management decisions.
Agents and brokers were doing the heavy lifting, he realized, but it was the trappings of the franchise itself that was reaping the rewards. The real estate compensation structure was in need of a remodel, and the legacy companies who held the majority of the power, it seemed, would not be willing to share the wealth.
With this spirit, Sanford designed eXp Realty to treat its agents and brokers more like shareholders, providing equity in the company as well as an 80/20 commission split.
“Our biggest growth driver is the realignment of compensation in the real estate residential industry,” Sanford says. “Most agents in most brokerages are in an ‘eat what you kill only’ industry—meaning, they have to find the buyers and sellers, and if they fail to find the buyers or sellers in a relatively finite period of time, they are effectively out of business. In the eXp business model, our compensation model is akin to direct selling while at the same time offering agents a lower cost to operate than a traditional brokerage and giving them equity in the brokerage. It allows them to have more time to be successful in the downtimes than they would in a traditional brokerage and creates a safety net for real estate professionals. It’s probably the biggest glue that we have in this business and brings more people to us.”
The Future of Real Estate
Building the real estate company of the future means a commitment to always thinking bigger— something Sanford has pushed his team to do since day one when his agent army totaled just two dozen.
Today, along with more than 900 staff members, Sanford is weaving his all-virtual approach to business into peripheral industries that service real estate by licensing Virbela to other companies.
“We have a platform that can help other businesses scale that would normally be using a brick-and-mortar environment,” Sanford says. “Using the Virbela platform, we’re able to platform inside of other industries, and we’re excited to be platforming inside the title and escrow space, the personal finance space and more. We truly have some of the best, most state-of-the-art platforming tools—including SUCCESS magazine—and all of those assets will help people continue to become better versions of themselves as they work with the eXp family.”
One of the strongest momentum leaders within the direct selling industry, eXp Realty has removed the friction of a location-dependent headquarters and erased the sluggish administrative processes that come with building fresh infrastructure with every new market launch, proving that the future of real estate may have already arrived.
From the June 2021 issue of Direct Selling News magazine.
