In the first part of this series we looked at projections for part-time agents in eXp Realty’s equity and revenue sharing programs.
In this post, we’ll take a closer look at high performing agents. This is where the numbers really get good.
As you’ll see, agents reaching “Capped” status and “Icon” status have the potential to do really well through these programs.
As a reminder, the three key components of the program are:
- Revenue Sharing – A percentage of company revenue that goes back to the agents who sponsored other agents into the company. Put simply, a recruiting incentive.
- Discounted Stock Purchases – Agents buy shares of our stock (EXPI) at a 10% discount to the market price.
- Stock Awards – Shares of EXPI are given to agents as performance incentives.
Does that sound like a lot of jargon? I thought so too. That’s what inspired this series of posts. We need to look at these programs in action!
Here are the assumptions we’re using to make projections.
Assumptions
I tried to be extremely conservative in these. The future could play out better. It could play out worse. Here are the assumptions I made across all simulations.
- Every realtor’s business stays at the exact same production level for 10 years. It never grows.
- The eXp compensation model stays the same for 10 years. We’ll have some minor tweaks, but I believe the key parts will stay the same.
- We’ll assume eXp is not the fastest growing real estate company in history. The stock simply grows with the market at 10% per year.
- Every agent takes advantage of the opportunity to invest 5% of their earned commissions in our stock purchased at a 10% discount. Since they’re getting better splits than their old brokerage, they invest the difference.
- Across all agents in a revenue sharing group, the percentage of commissions paid out will equal 3%. It’s a simplification of the model, but should get us close enough
Here’s what it looks like for a full-time agent.
Full-Time Agent
About this agent:
- They sell around $3 million of real estate per year.
- Their gross commissions equal $80,000 per year.
- They attract 1 agent to the company each year.
- Among the agents they attract, 2 additional agents are attracted each year.
- All the agents in their organization average 40,000 in commissions.
How does revenue share look for them over 10 years?
- $174,000 in revenue share earned over 10 years.
- $33,600 in minimum revenue share projected for each year going forward.
How do their discounted share purchases look?
- They now have shares worth $77,916
How do their share awards look?
- They’ve been awarded $17,531 worth of stock.
What’s the total effect over 10 years for a “capping” agent?
- $17,531 worth of stock awards
- $77,916 worth of stock bought at a discount
- $174,000 in revenue share pay out
In Total: $269,447 over 10 years
- That’s 3 years worth of work for this agent.
- If they own an average home in Birmingham, they could pay it off.
For agents who move past “capping” eXp has an extra incentive. ICON status. The primary benefit of ICON status is that these agents can receive $16,000 in stock awards for achieving it annually.
As you’ll see, this can really add up.
ICON Agent
About this agent:
- They sell around $5.5 million of real estate per year.
- Their gross commissions equal 160,000 per year.
- They qualify for the full ICON award and receive their cap back in stock each year.
- They attract 2 agents to the company every year.
- Among the agents they attract, 4 additional agents are attracted each year.
- All the agents in their organization average 40,000 in commissions.
How does revenue share look for them over 10 years?
- $348,000 in revenue share earned over 10 years.
- $67,200 in minimum revenue share projected for each year going forward.
How do their discounted share purchases look?
- They now have shares worth $155,833
How do their share awards look?
- They’ve been awarded $305,042 worth of stock
What’s the total effect over 10 years for an ICON agent?
- $305,042 worth of stock awards
- $155,833 worth of stock bought at a discount
- $348,000 in revenue share payout
In Total: $808,875 in benefits over 10 years
- That’s 5 years worth of work for this agent.
- This agent could buy lake house plus a beach condo and pay cash.
These are some life changing numbers. Numbers that can give Realtor’s true financial freedom.
Next, I’ll show you what’s possible for agents who choose to lead.
Team leaders, brokers, coaches, and mentors have the potential to retire in 10 years or less through the programs we’re discussing. I’ll show you how in the final post of this series.
Thanks for reading! Please send me an email with any questions or comments!
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