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A Tale of Two Compensation Models: eXp and Keller Williams

Keller Williams and eXp are both companies that have their agents’ interests at heart. However, the ways in which they show this interest is slightly, though very importantly, different. Between KW and eXp, in terms of agent reward, this difference is Profit Sharing on the part of KW and Revenue Sharing on the part of eXp.

So, how do we compare these two compensation models? For both companies, in addition to an agent’s commissions, compensation is based on the production of agents which have been recruited by other agents. If you are an agent with either company, you get a percentage of the sales of each of those agents you have recruited. The difference is how this percentage of sales is calculated. For KW, the percentage is based on a share of the profits that the agent has generated on a sale. That is the revenue of the sale, AFTER expenses. For eXp, the agent receives a percentage of the sale revenue BEFORE expenses. This provides a significant increase in revenue for eXp agents over KW agents.

There is another difference in agent compensation between KW and eXp. This has to do with the transactional fees. In general, agents get to keep more of their commissions at eXp than they do at KW. Let’s look at the formulas: At KW agents typically have a 70/30 split which is capped at $18,000 a year. They also have to pay a six percent transaction royalty fee that is capped at $3,000 a year. And, depending on market center, they have to pay an E/O fee of $40-$75 per transaction without a cap.

At eXp, the split is 80/20 with a $16.000 cap. Brokers only pay a $25 broker fee per transaction and a $40 risk management fee per transaction which is capped at $500 annually. As you can see, eXp agents keep significantly more of their commissions than do KW agents.

All that we have discussed so far applies to seasoned agents who have established themselves with their respective firms. But, what if you are a new agent? What happens to your commissions then? Again, there are important differences between the two business models.

If you are a new agent at KW, you will get a 60/40 split for the first $1 million in sales. Once they reach that million dollar sales goal, they switch over to the schedule detailed above. With eXp, a new agent receives a mentor. This program applies to any agent that has not sold more than three properties in the last twelve months. When you are a “mentee” you receive help from the agent who is mentoring you and you also receive the 60/40 commission split that KW agents receive. However, with eXp, it is only for your first three closed sales, regardless of sales volume. Once you close three deals in the mentor program, you go on to the 80/20 split detailed above.

We have talked about the basic differences in this post between KW’s compensation model and eXp’s compensation model. We hope we have shown you how eXp is the right choice for the agent that wants to keep more of what they’ve earned while working with a great team. And speaking of teams, look for our next post on how teams benefit more at eXp than they do at KW!

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