Full disclaimer, I never joined Keller Williams Realty in my professional life. I started straight out of my career as a flat fee real estate agent. But, what I can tell you is I am lucky enough to be able to sponsor so many superstars that used to be with Keller Williams.
These are two amazing real estate brokerages with two fantastic business models, similar but yet different. I don’t believe that one company is better than the others. It is your job as a real estate agent to understand the similarity and differences between eXp Realty vs. Keller Williams Realty and select the brokerage that will fit you the most.
If you are a Keller Williams agent and see any incorrect facts about the company, feel free to correct me. I don’t claim to know as much about Keller Williams as its agents do.
Let’s just quickly review the history of both companies. Sometimes history will tell us what the future will look like.
History of Keller Williams
Youâ€™ve probably heard the tale of the big names in the real estate industry. It was Century 21 in the 80s, then Remax in the 90s. The 2000s was the golden age of Keller Williams. Keller Williams was founded in Austin, Texas, by Gary Keller and Joe Williams in 1983.
Gary Keller’s leadership quickly grew the company to 173,274 agents within the United States and 14,847 agents worldwide, totaling 188,121 agents across the globe. A big part of the growth is attributed to its franchise partners. Another contributing factor was the profit share program designed to grow the company.
Today Keller Williams is still the biggest real estate brokerage in the world, with 331.9k transactions closed and $138.9 billion in sales volume. Garry Keller is still currently Keller Williams CEO.
History of eXp Realty
Compared to the rich history of Keller Williams, eXp Realty is still a new kid on the block. The company was founded in 2009 by Glenn Sanford. One key thing to note here is that Glenn was a real estate agent, then became a team leader at Keller Williams before he founded eXp Realty.
Remember that fight between Batman vs. Bane in the Dark Knight Rises? This is the scene where Bane said Batman only trained in darkness, but Bane was born in the darkness. He kicked Batman’s butt in that fight. eXp Realty was born in the housing market’s darkest moment in living memory. And we are going to kick everybody a**!
I digress, but you get the idea. Glenn founded eXp Realty out of necessity during the bleak housing market collapse of 2008. If a real estate business can not keep its expenses down, it will go out of business. Glenn did not want to go through this again and endeavored to build a company that remains sustainable, especially when the market shifts.
Today eXp Realty has surpassed an 83,000 agent count worldwide (check my article “Best eXp Realty Agents and Best Teams 2022“) and is the fastest growing real estate brokerage in America. Under the leadership of Glenn Sanford, the company has accomplished many incredible achievements despite being a new player in the industry
So, what’s the difference between the two? Let’s dive inâ€¦
Business Model: eXp Realty vs Keller Williams Realty
The main difference between Keller Williams vs eXp Realty is their business model.
Keller Williams is a Franchise Model
Keller Williams operates as a real estate franchise. Here’s how it works: Let’s say someone wants to open Share Tea or McDonald’s as a franchise. First, they have to buy the franchise, becoming franchise partners. Purchasing a franchise costs hundreds of thousands of dollars, but it is the only way you can own a piece of the company.
If you want to own KW, you must also buy a KW franchise. After that, you have to start recruiting and training agents. As a franchisor, Keller Williams provides all the tools and support necessary to ensure the franchisee becomes a successful Keller Williams owner. The real estate agent who enrolled in that particular Keller Williams region will pay the franchise – aka KW market center – a commission split and a royalty fee to the “KW mothership”.
What Does This Mean For New Agents?
Most of us who started out as new agents don’t think about the business model that much. We simply want to learn as much as possible and close some deals. When a big box broker like Keller Williams provides training and support and wants to take a split in your commission in exchange, most agents don’t complain.
I remembered sitting in a Keller Williams office and listening to the presentation. Somehow I had a feeling I’d be the one doing the hard work, but somewhere up there, someone else is getting all the six packs.
I was fortunate enough to read Rich Dad Poor Dad when I was young. I don’t know anything about real estate back then, but I know one thing now: the rich do not work for money. Wealthy individuals work for equity and cash flow.
I see no equity and cash flow in Keller Williams’s business model. I have no money as a new agent to buy a franchise. Keller Williams does engage in profit share from each local market center. That said, you will be lucky if you can get someone to explain it to you properly (and actually get rich doing it).
eXp Realty is not a Franchise
Like I said before, eXp was literally born in real estate darkness. There was no way the brokerage would survive as a young company if they had an office building to rent or other unnecessary expenses.
Glenn eliminated these issues by moving his entire company to the eXp world, the core technology of eXp Realty which allowed the brokerage to function and grow with the speed of the internet. Instead of holding meetings and conducting business at the office, eXp Realty operates its entire billion-dollar corporation from a virtual space called eXp world.
What does eXp do with all the cash they are saving? They pass all their savings onto YOU, the real estate agent reading this blog. We call this revenue share. Since eXp Realty only needs 50% of its revenue to support agents, the other 50% of its revenue gets distributed to the real estate agents helping to grow the company. More on that later.
My memory just recalled Wilco, one of the revenue share leaders in eXp. He was the first one to give me the eXp pitch. I showed little interest until he flashed me his monthly revenue share check. After I saw that, he sure had my attention.
What Does This Mean For New Agents?
Since there is no longer a franchise owner in the company, Glenn has provided every single eXp agent the opportunity to take ownership of the company. I won’t go into too much detail here, but when you hit a certain production level – for example, closing your first deal, capping, or becoming ICON agents – you get awarded with eXp stock. Our stock symbol is EXPI, which gets traded on the NASDAQ exchange.
Ask a Remax agent how many stock awards they get when they close a property deal, and you will get an unsurprising answer: zero.
This was one of the turning points for me as I considered both models: I didn’t need to spend any money to own the franchise. Instead, I could automatically become a shareholder by simply buying and selling real estate. Most real estate agents usually look for two financial metrics when they choose their brokerage, split and fee (which we will discuss).
I looked for two more things: equity and cash flow.
Training: Keller Williams vs eXp Realty
Keller Williams Training
Keller Williams has one of the best training systems in the industry. I enjoy working with Keller Williams agents on the other side of the deal. Keller Williams must have done something right to have awesome real estate agents like that.
I honestly can not talk about KW training since I was never there, so instead, you will hear me interview Chris at the end of this blog. Chris is a Keller Williams team leader that just moved over from eXp a couple of weeks ago. His memory is still fresh so let’s pick his brain on KW training later.
eXp Realty Training
I can, however, tell you a lot about eXp Realty training. I still had a full-time job when I started at eXp Realty, and it was difficult to leave my work and attend real estate training. You can only sneak out so many times before your boss notices and call you out.
Since Exp Realty hosts most of its training on eXp World, I only needed to plug in my headset and log into eXp World. I could listen to the training from my phone or my laptop, and pretend that I was working! Call it work-life balance – I just did what I had to do. eXp World is so flexible you can simply press a button to unmute yourself to ask the instructor a question, or watch the recording later when you get home.
Every night, I would log on to expcloud.com, mark the class I wanted to take on the cloud, hop on, and train. No need to drive anywhere.
Split and Fee: eXp Realty vs Keller Williams Realty
Keller Williams commission split and fee
From what I understood talking with Chris, there are all kinds of splits and fees in the Keller Williams system. Commission splits start from 50/50 for the new agents up to 95/5 for the superstars. Each Keller Williams region is owned and operated independently, so you would need to talk to your market center to figure out what their current split is.
For example, in Houston, we have KW Metropolitan, KW Memorial, KW Northwest, KW Southwest, KW Northeast, and KW Premier market centers. Each has different leadership styles, training, splits, and fees. Do they even like each other?
eXp Realty commission split and fee
There is no special treatment at eXp Realty. The company does not care if you are a rockstar or a newbie. Your commission split in the United States will be 80/20, capped at $16,000. After capping, there is a fee of $250 per transaction. Close 20 more deals after you cap and the transaction fee gets reduced to $75. This is when you become an ICON agent, the top 4% of the company.
There is a $40 E&O Fee per transaction capped at $500 annually and a $25 broker review fee. There is an additional $85 monthly fee, which covers all of the live training on the cloud and every opportunity you could utilize inside the massive eXp ecosystem.
There are self-organized teams, standard teams, and Mega Icon teams at eXp – none of which are covered in the scope of this article. Notably, the commission split and fee will vary depending on the team leader.
Office Space: eXp vs Keller Williams
Keller Williams is a brick-and-mortar company with physical locations in multiple states. When agents sign up to Keller Williams, they join a particular office location and can utilize the physical office either for a fee or for free, depending on the agreement. Each franchise owner will use the office location to conduct live training, meetings, and so on.
eXp Realty is a cloud-based brokerage, so there is no official office space. And trust me, if eXp had multiple physical locations like Keller Williams, there would be no revenue share left to pay you. With that said, it does not mean we all work from home. eXp agents can utilize Regus co-working offices for free, and they have locations all around the world. Some agents choose to rent out their own office space or already had a dedicated working space before they moved to eXp.
I utilize a very cool co-working space in Houston. I love working there instead of from home. If you are anything like me, the last thing you want to do is work from home. The business model of eXp is flexible and allows you flexibility too, having an office anywhere you want.
Profit Share vs. Revenue Share
Both Keller Williams and eXp Realty incentivize agents to grow the company by attracting other agents to join the company. Meaning that if you sponsor me into the company and I close a deal, you will get a little cut as my sponsor since I wouldn’t be here without you.
The major difference between the two systems is the bottom line.
Keller Williams shares the profit base of each market center’s profit and loss. This gets complicated. I can hardly find a person in Keller Williams that can explain the profit share system. If I sponsor you into Keller Williams and you close a deal, I have to wait until the end of the year when they finally calculate the profit and loss in that market center. If that particular office or Keller Williams region is profitable, you get a profit share check. If it’s not profitable, you get nothing.
Business and stock market analysis, finance and investment concept. Double exposure businessman analyzing financial graph, economic growth and buildings in the city.
I don’t know enough about profit sharing, but I know enough to understand that nobody from Keller Williams I spoke with is excited about it. For example, one of the top producers in Houston said she recruited two other agents that capped into KW. At the end of that year, she got a check for..$700 bucks. She couldn’t care less about that $700.
Revenue share, as the name suggests, is sharing the revenue, aka the gross profit. Since eXp is a financially “lean” company with no overheads, they only operate on 50% of its revenue and pass the other 50% of revenue directly back to the agents that grow the company.
You can click here for another article where I explain revenue share in detail. But in short, I could say that the amount is large enough that you actually care about the financial success of the people you sponsor in the company. You would help them and develop them into the next superstar. The person you invite into the company is no longer a number.
They could be the key leader for you to unlock your next level of wealth, so you give them everything you humanly can!
Each brokerage, either Keller Williams Realty or eXp Realty, has its pros and cons. It is actually up to you to figure out what will be the best fit for you. I would suggest you research more about each company, but most importantly, you have to know what you want.
Take my case, for example. On top of real estate commission, equity and cash flow are very important to me. Outside my job, my family is also important. Once I understood these, I knew eXp Realty would automatically be a better fit. But that’s me.
What about you? I would love to hear your take on the two biggest names in real estate.