eXp Realty vs Keller Williams 2022
If you are a real estate agent in 2022 then you probably have heard of, or even been a part of the heated debate between eXp Realty vs Keller Williams as to which brokerage offers a better model for agents, teams, and even independent broker-owners who want to partner with a global brand. When it comes to the real estate brokerage world, there are no two brokerage models ever in the history of the industry that has been compared to each other as much as eXp Realty and Keller Williams.
Although there are many similarities between the two brokerages’ trajectory of growth and history of success, when you look at each model objectively and in detail, then you will find that the brokerage models are actually quite different from each other. In fact, there isn’t really much similarity between the two business models when you are looking at them from an agent, team leader, or broker’s perspective.
In this article, we are going to go over the key differences between the business and income models of eXp Realty vs Keller Williams in 2022, and explain from an agent and team leader’s perspective the different tools, resources, training, and opportunities that each brokerage has to offer.
The History of eXp Realty and Keller Williams
To understand why there are so many agents that make comparisons between eXp Realty and Keller Williams (including what I am doing right now in this article), we first have to look at the history of the two brokerages. Like I mentioned earlier in the article, the two brokerages are actually quite different when it comes to their business model, but it is their shared success and intertwined history that has caused agents to compare the two models extensively.
Keller Williams was founded in 1983 by partners Gary Keller and Joe Williams in Austin Texas, having suffered slightly from the U.S. housing bubble in the mid-80s and losing some of their top sales associates in 1986, Gary Keller introduced the 7 tier profit share model for agents as a way to attract and retain top talented agents. By the 1990s, Keller Williams has seen so much success with their profit share model that they took advantage of the biggest national expansion opportunity for businesses at the time and began to franchise their business model across the country.
By the mid-2000s, Keller Williams was reinventing the real estate brokerage world through their team-friendly profit share model that allowed agents to build teams without having the liabilities of opening a brokerage, creating real estate leaders out of successful and even “average joe” agents across the US. One of the first agents that built a successful team under the Keller Williams model was able to run one of the top 50 real estate teams in the country doing over $60,000,000 a year in production their fourth full year in the business. His name is Glenn Sanford, the founder of eXp Realty.
In 2009, around 20 years after the real estate bubble of the mid-1980s that caused Keller Williams to introduce the profit share model, Glenn Sanford launched eXp Realty in the middle of one of the worst real estate market crashes in recent US history. When Glenn saw how much agents and brokers were struggling during the recession in the late 2000s, he took the aspects that made Keller Williams the fastest growing real estate company ever and massively enhanced it to fit the needs of agents in the modern-day, combining the 7 tier residual income model with technology to create a national, and now international revenue share model.
From then on, eXp Realty overtook Keller Williams as the fastest growing real estate brokerage in the history of North America, launching additional agent equity programs and going public on the NASDAQ. In 2022, eXp Realty is now the fastest-growing real estate brokerage in the world exceeding an agent count of 76,000, while Keller Williams still holds the claim to being the brokerage with the highest agent count in the US.
eXp Realty vs Keller Williams in 2022
So now you know the history of the two companies and see why they are so heavily compared amongst agents in the marketplace. But how do the two business models actually compare? To answer that question, I have decided to break each company down using 5 measuring criteria that are most important to agents and team leaders. The first 3 based on income and opportunity, the last two are based on support and business functions.
The 5 measuring criteria of eXp Realty vs Keller Williams in 2022 are:
- The Sales Model
- The Residual Income Model
- Equity Ownership
- Training and Agent Development
- Team Structures for Agent Support and Leadership Opportunites
1) The Sales Model
The first and most obvious measuring aspect that we will look at when comparing eXp Realty to Keller Williams is the sales model. Namely, the compensation structures of each brokerage for agent production.
Keller Williams Sales Model – Franchise
At Keller Williams, agents receive a compensation plan that is very common amongst big box and other franchise brokerages known as a cap split model. On average, agents at a Keller Williams market center receives a 70/30 split that caps at $20,000 each year, meaning that when an agent pays into the company $20,000 in commissions splits in an anniversary year, they will receive 100% of their commissions on all sales until the end of the year.
And because KW is a franchise brokerage, they do charge agents a 6% real estate tax or “royalty” on every transaction. So really it is a 64/36 split with 64% going to the agent, 30% going to the franchise office, and 6% going to Keller Williams.
Now that is only the average cap and split numbers for a Keller Williams market center in North America, and that does not necessarily constitute that every agent at every market center will get those exact same numbers. Because Keller Williams is a franchise brokerage, their compensation models will vary from market center to market center because of the difference in location and more importantly, the difference in the expenses needed to run each market center.
This means that Keller Williams market centers usually have an accelerated cap based on the adjusted price of their real estate market and what each market center’s monthly expenses are. Usually, in a higher-priced market, such as locations in the North East or North West United States, the annual cap for agents will be much higher than that of a market center in a lower-priced market. For example, a Keller Williams market center in Charlottesville VA has an $18,000 annual cap, which is lower than the $20,000 average. But a market center in Manhattan, a much more expensive area, might have a $40,000 annual cap.
There are two reasons for this.
First, because every market center is going to be servicing a different location, the home prices and as a result, the agent’s commissions will vary. So in a higher-priced market, it makes sense for a KW office to charge agents a higher cap because they will be earning more commissions every year.
Second, and more importantly, because the different locations have different economies, the expenses that will take to run every market center will also vary. Like we mentioned earlier, an office in Manhattan will cost way more to run than an office in Texas. And since the market centers must be profitable in order to stay in business, they will charge their agents a higher cap so that they can actually cover their monthly brick and mortar expenses to run the office.
Think of it like any other franchise. A cheeseburger at a Mcdonald’s in Texas usually costs less than the same cheeseburger at a Mcdonald’s in New York.
eXp Realty Sales Model – Cloud Based Independent
At eXp Realty, agents receive a similar sales model compensation plan, the cap split plan, with a few major differences because eXp Realty is not a franchise.
Agents at eXp Realty are paid an 80/20 split with a $16,000 cap. Because eXp is not a franchise, there are no additional royalties or real estate taxes on the agents’ commissions. Also, because eXp is a cloud-based independent brokerage, which means that everything at eXp is and can be done through a cloud officing system called eXp World, there is no need for any franchising, which means there are no brick and mortar expenses to run the brokerage.
Without the variances of different market centers in a franchise model, every agent at eXp Realty receives the same cap and split in all of North America, with the only difference being country to country based on the adjusted currency exchange rate. So this means that it doesn’t matter where you are or where an agent on your team is (we will get to this later), you will all receive the same 80/20 split and $16,000 cap at eXp Realty.
2) The Residual Income Model
The second aspect that we will compare between eXp Realty vs Keller Williams is the residual income model and the team-building opportunity that each brokerage has to offer. Keller Williams profit share vs eXp Realty’s revenue share.
At Keller Williams, agents of all levels have the opportunity to participate in their 7 tier profit share model, which was introduced by Gary Keller in 1986 as an agent retention and attraction tool, rewarding Keller Williams agents for helping grow the company and becoming leaders at the company. How this works is that if an agent at Keller Williams introduces another agent to the company, they are then paid a percentage of that agent’s sales production from the market center every month after expenses.
So this means that at the end of every month, each Keller Williams market center will calculate their profits, and based on how much profit is earned, they will share back a certain fixed percentage of that back to the agents at the company who have taken an active role in attracting other agents to the company.
The profit share model is incredibly powerful and has created many real estate leaders out of average everyday agents, allowing them to build wealth and residual income every month so they can have financial security and time freedom. The profit share model is also responsible for helping propel Keller Williams to become the brokerage with the number one highest agent count in all of North America.
When Glenn Sanford launched eXp Realty, he recognized the power of the residual 7 tier profit share model of Keller Williams so he decided to adopt a similar, but enhanced version of it now called Revenue Share. Because eXp is cloud-based, there are no brick and mortar expenses to run the company, which means that monthly expenses to keep the brokerage up and running are drastically reduced compared to other brokerage models where brick and mortar offices and expenses are essentials.
This means that instead of having to only share profit back to the agents after expenses are calculated, eXp Realty is able to adopt the same 7 tier model that rewards agents massively for growing the company and sponsoring other agents to eXp, they are able to share revenue before expenses back to the agents.
At eXp Realty, if you sponsor one agent to the company, which means you introduced this agent to the company and they name you as their sponsor, then you will receive 3.5% of their GCI on every sale that they close before they cap at the company because eXp is sharing the revenue back to you from the company portion of the split, not the agent’s split. This means that whenever an agent closes a transaction before they have capped at the company, their sponsor will receive 3.5% of the gross commission. Every single time, every year as long as that agent stays at eXp.
If the agent that you sponsored decided to introduce an agent to the company, then they will fall one tier removed from you, which means that they will be on your second tier of compensation and your agent’s first tier of compensation. Here is a breakdown of the 7 tiers of revenue share compensation:
Also, because eXp Realty is not a franchise brokerage, this means that you are able to attract agents to your revenue share group anywhere in the world in all active markets. This is a fantastic opportunity because you are able to expand the market share that you can grow your team in and expand your horizons as a team leader. At the time of the conception of this article, agents at eXp Realty are able to attract agents to their revenue share teams in 14 different countries.
3) The Equity Model
The third income-based aspect that we will compare between eXp Realty vs Keller Williams is the opportunity to earn equity in each of the two brokerages. Although equity ownership and stock award programs are common in the corporate world, it is a relatively new concept in the real estate brokerage world.
eXp Realty is held under a publicly-traded company called EXP World Holdings LLC listed on the NASDAQ stock exchange under the stock ticker symbol EXPI. Because of this, eXp Realty is able to reward agents’ equity in the brokerage that they work at through stock ownership as an additional agent retention tool for the company and its leaders.
Agents at eXp Realty receive stock awards at varying amounts based on hitting certain production milestones through the year such as closing their first sale, or capping at the company. Top-performing agents at eXp who close 20 additional transactions after capping, the ICON agents, are also eligible to earn their entire $16,000 cap back in the form of stock awards every year that they are at the company.
Because real estate brokerages are usually franchised based companies, very few have actually been able to scale up to the point of being publicly traded companies. Although Keller Williams as a company has the single highest agent count in the US out of any brokerage, they are not yet a public company and as of 2022, there are still no widely known ways to earn ownership in the brokerage as an agent or even a team leader.
Now that we have covered the compensation plans at both companies and looked at the income-earning and wealth-building opportunities of each company let’s take a look at the most important aspect outside of income for agents and team leaders when it comes to comparing brokerages. Training and agent development.
Market Center Training at Keller Williams
Like any other franchise company, Keller Williams prides itself on its training and coaching systems that are available to all of its agents at every skill level. Agents at Keller Williams receive their training mostly in their market centers from the agents, productivity coaches, and outside guest trainers that each market center is able to provide. Their BOLD and IGNITE national training programs have usually been received well by new agents and seasoned agents alike.
Also, because Keller Williams is a franchise company, the training programs and deliverance of their training will vary from market center to market center. Because of geographical restrictions, agents at Keller Williams can only receive training from the coaches available to them in their market centers.
Remembering the Mcdonalds franchise analogy earlier on in the article, I am sure you have been to Mcdonald’s locations that were much fancier with much better service than others.
The same goes for Keller Williams market centers because they are only able to provide agents with trainers who are local to their office, there will be varying levels of quality on the training that you receive s a Keller Williams agent based on your market center.
ICON Training at eXp Realty
At eXp Realty, all agent trainings and development are conducted through eXp University inside the cloud office of eXp World, saving agents travel time and commuting expenses by allowing agents to take their training and coaching sessions anywhere they choose to. On top of that, all of eXp’s trainings are lead by ICON coaches, agents who are in the top 2-3% of production in the world, so that you or your agents can receive training from the best agents in the world, no matter where you are located.
Inside eXp University there are over 80 hours a week of live and recorded training held by elite agents at the company from around the world, sharing the same strategies that they use to achieve top production status. This is a major benefit for agents because these ICON trainers are incentivized to teach these classes as one of the requirements to earn their $16,000 stock award, and also because eXp’s training is not geographically restricted, your trainers will not hold back in fear of creating more competition for themselves.
Also, in terms of local and contracts support for new agents, eXp Realty assigns new agents a designated mentor in their local market to assist them with their first three transactions through the eXpand mentorship program. For contracts and legal support and training that are state or country-specific, eXp has a designated team of managing brokers in each of the 50 states in the US and each region that eXp is actively operational in that conducts their own weekly compliance, legal, and contract classes.
5) Team Structures and Agent Support
Lastly, the final aspect that we compare between eXp Realty vs Keller Williams is the team structure for leaders and brokers who are interested in partnering with a national brand, and the support that agents will get from each of those structures. As a team leader or a broker-owner, your biggest goal in your business is to find ways to outsource your support systems, liability, risks, and growth systems.
Keller Williams For Brokerages and Teams
At Keller Williams, team leaders operate under a traditional real estate team structure that is commonly seen in the marketplace. As a franchise company, there is a clear hierarchy of leadership and support structure for agents and teams that want to partner with Keller Williams.
At the very top of the hierarchy is Keller Williams, the brokerage and overall company. They provide the business systems, marketing, licensing, and training for the market center franchise owners and brokers. The franchise owner, who is usually also the broker, is responsible for all the legal and liability of the agents at the market center, conducting legal and compliance trainings for the agents, hiring other managing brokers and naming productivity coaches, and assigning team leaders.
Then it is the team leaders’ job to attract new agents to their teams or to the market center through profit share, providing their agents with additional support, one on one coaching, mentorship, and business coaching. Most independent brokers who join Keller Williams become team leaders at a local market center and bring their current agents over under their team.
In terms of compensation, the KW HQ earns their share through the 6% tax that they charge agents on their sales transactions, brokers and market center owners earn their compensation through the agent splits which are usually 30%, and team leaders earn their share usually through an additional split with the agents or through profit share alone.
So to recap, team leaders at Keller Williams get their legal and liability support from their market center owners and the staff that they have on their payroll during their office hours, and they get business coaching, agent development for their agents, and marketing support from Keller Williams HQ. Lastly, their growth is somewhat outsourced through the profit share model, which rewards their agents for attracting other agents under their team.
Teams and Brokerages at eXp Realty
At eXp Realty, there is no clear hierarchy for teams and brokerages who choose to partner their entire teams with the company because of the growth and outsourcing potential of revenue share. Like I mentioned earlier, one of the most important aspects for a broker or team leader to consider when moving their business is the outsourcing of their growth and liability. With the revenue share structure, your sponsors at the company are heavily incentivized to help you attract more agents to your revenue share group and grow your team.
Because of the guarantee that agents and leaders at eXp will get paid every single month from their agent’s revenue share as long as they produce sales, your partners in your sponsorship organization are dedicated to doing anything that they can to help you grow your team, but to also help increase the productivity of your agents with additional coaching and training on top of eXp University. Also, because revenue share is extended to every agent in your team as well, they are now also incentivized heavily to help you grow your team by attracting agents to the company themselves.
So you are not only getting support from at least 7 other partners at the company who are a part of your sponsorship lineage to help you grow your team because we have a vested interest in your success, but you are also able to develop leaders within your current team of agents so that you can completely outsource the entire growth arm of your business.
Now if you are a team leader that wants to keep your original team structure and agent split structures, there are a couple of traditional team structure options for you at eXp Realty. To learn more about these options click here to read o article on the 4 types of traditional teams at eXp Realty.
The next benefit for teams and brokerages at eXp Realty is the outsourcing of legal and liability for you as the broker-owner or team leader, and the internal business and admin support for your agents. Inside eXp World there are over 600 paid employees working in the cloud in over a dozen departments ranging from agent training to tech support to accounting to payment processing.
As a team leader at eXp Realty, you and your agents will have access 24/7 to all 600 employees for free so that you no longer have to answer your agent’s admin and legal questions yourself, saving you time. And if you used to have employees on your staff that did that for you, you no longer have to make payroll fr them, which saves you money.
Also, because eXp Realty has designated brokers in each state and each region, you are able to grow your team anywhere in the world without having to get a broker’s license in that region. This means that from the moment that you partner your business with eXp Realty, you are no longer liable for any of your agents’ actions and that responsibility is outsourced to eXp’s legal and brokerage operations department so that you don’t ever have to review a contract or see any paperwork ever again in your business and can never be sued.
To recap, at eXp Realty, team leaders and brokers are reducing liability and increasing scalability with the many outsourcing systems that are provided to them for free through the revenue share structure and the eXp World virtual working system. To learn more about why eXp Realty is the perfect destination for teams and brokerages, check out our articles below or book a free strategy session with me:
- Benefits of eXp Realty for Teams and Brokereages
- Why So Many Brokerages are joining eXp Realty
- eXp World – The Perfect Outsourcing system
- Revenue Share vs Profit Share
- Revenue Share Explained
By now you should have a good understanding of the benefits of eXp Realty vs Keller Williams, the pros and cons of each, and how they stack up against each other. When you actually take a detailed look at the two models, you can clearly see that they are actually quite different when it comes to the business models and income-earning opportunities for each brokerage.
To learn more about the potential opportunity to partner your business with the fastest growing team at the fastest growing brokerage in history and get additional business, self-development, social media, real estate investing, and lead generation training for free that you won’t find anywhere else at any other team at any other brokerage, click the link below and book your free strategy call with me.