In late 2008, when the housing market crashed in the U.S., Glenn Sanford, founder, chairman and CEO of eXp World Holdings, decided it was time for a paradigmatic shift in the real estate industry. With years of success since 2002 in the online real estate space, Sanford says he recognized the “perfect storm” to be his opportunity to rewrite the brokerage business model. In founding eXp Realty in 2009 he asked his team to not come into the office the next day, and moved to a borderless cloud office where agents, brokers and staff could learn, network and transact business daily in a collaborative, cost-effective and productive way.
Under the banner of its publicly traded holding company, eXp World Holdings, Inc. (OTCQB: EXPI), eXp Realty is a 3D virtual space that provides agents with 24/7 tech support and access to training, marketing and lead generation tools and networking. The company believes it makes affiliating to brick and mortar brokerages unnecessary.
Because of eXp Realty’s low overheads and an aggressive revenue-sharing and equity ownership model that “pays agents a percentage of gross commission income earned by fellow real estate professionals who they attract into the company”, according to their website, its growth trajectory rocketed to 2,000 agents by fall 2016.
In 2014 the company was introduced in Canada by Calgary’s Urban Realty Group. This year it expanded to Ontario.
Toronto-based broker of record John Lusink, who has more than 27 years of real estate experience with major brokerages, has been appointed regional vice president of eXp Realty’s Canada Brokerage Operations.
“In the traditional model of brokerages, there are 200 to 300 agents at least under each of the big brand names. The quality tends to suffer and Realtors get lost,” says Lusink. “They’re charged heavy franchise fees. But this is not the case at eXp Realty. There is a real sense of community when you attend agent-facilitated meetings in their virtual auditorium space.”
Lusink joined eXp Realty in May 2017. Although he started with no agents, currently 15 Ontario agents have signed up, and six are in the process of on-boarding. These include sales reps from Toronto, London and Ottawa. Calgary boasts 30 eXp Realty agents and Edmonton has three.
Signing in to this virtual world, called eXpWorld, feels much like walking into a university campus, only online. In a video game environment, agents can customize their avatars from the colour of the hair to their shoes. The 3D immersive experience, however, functions as a real estate ecosystem that includes brokers, corporate staff, high-performing agents who lead coaching and training sessions, interactions with top-selling teams across provincial and state lines, and all the documentation needed to maintain compliance and regulation.
The cloud brokerage comes complete with an “open air” welcome area where agents walk in and ask for help. They can choose between multiple training and meeting rooms to sit in, tech support and computer labs, a productivity centre, a transaction room, a human resource centre, peer-peer groups, mentoring sessions and even a soccer field. With the press of a spacebar, agents can look around the space to get introduced to others present in the room, or even do a celebratory cartwheel for an earned commission or accolade.
The software is equipped with a place where seasoned avatars offer their assistance. A microphone-enabled chat box allows participants to message each other and an interactive campus map facilitates navigation within the ecosystem.
Lusink says that with the spread of AI systems across all industry sectors, menial jobs will be the first to be compromised. Critical skills that will sharpen the human edge in real estate are that of leadership, training, negotiating, relationship-building and strategy, he says. eXp Realty’s focussed online community is one where “agents don’t have to worry about the noise element of working in brokerages, or filling out administrative paper work. They can access a comprehensive schedule of meetings or training modules listed on the eXp World website, and based on their need, find and go to rooms that will be the most-effective use of their time,” he says.
The company claims to support agents at all levels of business from entry level to veterans in the field and independent brokers to teams. It provides them with branding, marketing and advertising tools necessary for lead generation. Agents have full access to Google Suite for Business and can choose between lead generation platforms Kunversion or CINC internet marketing. They can integrate and customize their WordPress websites and MLS systems, enable video-hosting and run AdWords campaigns.
The operational costs for agents to sign up include a $113 start-up fee, $99/month tech fee, $479/year eXp University tuition and $29 broker review fee (GST applies to all costs). Every year the company hosts an annual convention at a physical location, where agents are recognized and celebrated for their achievements and get the chance to meet the faces behind the online avatars.
Jason Gesing, the Boston-based CEO of eXp Realty, says the ideal profile of an eXp Realty agent is that of an entrepreneur who isn’t reliant on the brand of the brokerage for their success. “Our agents are willing to experiment with leading technology and have the mindset of a being a shareholder in a company. They have the requisite leadership, talent and expertise needed to drive their own success,” says Gesing.
“Prior to joining eXp Realty in 2010, I owned an independent brokerage and did a lot of transactional work on the commercial side of real estate,” he says. “What that meant was that each day, I was driving to downtown Boston from my home, which on weekdays takes over an hour one way. My kids were very young at the time and there were many days when I wouldn’t see them because they were asleep by the time I got home. At the same time, fewer people were coming into the office every day.”
Looking back, Gesing found the decision to sign up with eXp Realty a no-brainer in lieu of the rising operational costs and expenses associated with a brokerage. “With eXp Realty, my clients didn’t have to pay more than they needed to, to cover my overhead expenses,” he says.
The company expects to surpass 5,000 agents this fall.
In August it announced Q2 revenue earnings of $39.6 million, which was up 198 per cent from $13.3 million in Q2 2016.