Hey Marian,
I appreciate you taking the time to read my post and asking a great question.
I’ll try to keep my response short but I may struggle as I am very passionate about this topic.
There are several reasons why we decided to be 100% independent over partnering with eXp, but here are the main 3:
1. 100% ownership
Probably the most important reason being the financial benefits of being independent and owning the company.
eXp did it best with their model of being one brokerage per State and claiming all the revenue, opposed to competitors like ReMax who can only earn Franchise Fees and Royalties based on their model (also shows the difference in valuation despite agent count).
That being said, cloud brokerages clearly have the advantage of earning a very high valuation relative to Franchises based brokerages. Look at the Real Broker, they haven’t been around for very long and have a very small fraction of the agents that eXp have, yet they have a $400M + market cap (only $100M short of ReMax).
Based on this logic, my brokerage had a higher chance to 10x or even 100x on valuation opposed to eXp (what are the chances my company goes from $10M to $100M or $1B compared to eXp going from $2B to $20B+).
We also keep all the revenue generated. Most owners will agree the hardest part of being a brokerage owner is recruiting / keeping agents. Doesn’t make sense for us to recruit the agents, give up revenue share, deal with silly down lines and gain a portion of the benefit from the stock rising due to our hard work.
Yes, costs are high, It’s a lot of work and there’s much more risk / liability involved, but the reward outweighs it all.
2. HUGE Opportunity
eXp Realty is arguably the most successful Brokerage to date when it comes to innovation and valuation but there’s always room for growth.
A lot of Realtors love the cloud brokerage model but don’t like eXp and the Real Broker. Nonetheless, a lot of these people end up joining them because they don’t have many options. Within the states there are 100,000+ independent brokerages and within recent years we’re seeing more follow the cloud brokerage model. Why? Because there’s a MASSIVE opportunity out there that’s up for grabs. eXp doesn’t own a monopoly, they’re just one of the firsts to do it, and within the next 10 Years i guarantee they’ll face fierce competition.
We wanted to take advantage of this opportunity. Take advantage of the model but rebrand what it means to be a cloud brokerage. Compete with the juggernauts and take a piece of the market share, which was successful. Realtors love that this was “the next big thing” and that they had the opportunity to get in at the ground floor and earn that equity before the company could take off.
Additionally, their “tech” isn’t as advanced as you may think. Compared to other brokerages? Absolutely. But compared to where modern technology is as a whole, they are ages behind. There is A LOT of room for innovation within the industry, we took advantage of this and introduced tech that came at a surprise to many Realtors.
3. Freedom & Control
Lastly, we don’t want to be at anyone’s mercy for anything. We wanted 100% control over what we offered, how to brand ourselves, pretty much anything.
It’s really hard to innovate and offer added value as a Brokerage Owner if you’re under the umbrella of another brokerage.
I hope this answered your question and you can get a better idea of where my mindset was at.
Would love to connect and discuss this topic further!
