Brokerage

eXp Realty’s meteoric growth explored

Sanford says he's building a brokerage for agents, by agents

I arrive early for my interview with eXp World Holdings CEO and Founder Glenn Sanford, so I hang out in the virtual lobby waiting. But, I can see into Sanford’s office, which has a SUCCESS magazine with the leader on its cover hanging by the door.

Within minutes, he steps out of his virtual office and walks over to the lobby to greet me for our interview. I’m interviewing Sanford in the new, browser-based eXp metaverse – a virtual reality world in Frame where everyone is an avatar. Sanford’s avatar looks very much like a hip, tech CEO and next to his avatar is the real Sanford on video. This browser-based metaverse expands on eXp World in Virbela where agents go to learn, collaborate and meet.

The few times I’ve interviewed Sanford, he’s had a vibe about him and this day is no different. He’s calm, matter-of-fact, personable and never strays from his purpose. He is more than clear about his company’s mission.

He has a vision for eXp and that vision is quickly coming to life. The first year eXp qualified for the RealTrends 500 was 2017, when they ranked No. 47 by sides with 9,490 transaction sides (based on 2016 data).

Only two years later, in 2019, eXp rose to the top five brokerage firms by transaction sides. This year, they are No. 3 in transaction sides and No. 4 in sales volume, mirroring last year’s rankings.

Sanford did it simply by building a company of raving fans who are as passionate about growing their businesses as he is. No fancy acquisitions (at least of brokerage firms), no massive sign-on bonuses, just the promise of opportunity, revenue sharing, equity, agent perks and a culture of collaboration.

“From day one, I had a goal for agents to be shareholders in eXp,” says Sanford. “In 2012, we were at about 250 or so agents, so a little small to go public in a traditional setting. So, we went out and bought a public company, and, in 2013, merged eXp into that public company. That gave us the extra currency so we could distribute equity for our agents, which we started doing in 2014,” he notes.

Basically, Sanford was doing SPACs before they were popular. A SPAC, or special purpose acquisition company, “is a “blank check” shell corporation designed to take companies public without going through the traditional IPO process,” according to CBinsights.

But, he wants to make it clear. “We never raised money, because we never wanted to have to answer to a person who is only worried about their return on investment. We think you benefit in the long run if you’re making decisions for the agents first. Of course, we do have a lot of shareholders now,” he says, alluding to the fact that the shareholders understand the company’s mission.

Building a brokerage of raving fans

With that piece in place, Sanford continued his singular focus to offer agents the things he wanted when he was a salesperson. “I know that as a salesperson, I was focused on creating passive income. We took what Keller Williams had done in 2009 and built a better profit-sharing model,” says Sanford.

For eXp, that was a revenue-sharing model. “Without having to support the physical bricks and mortar infrastructure, we can [have] more predictable revenue targets, so we’re able to have a competitive split and cap,” says Sanford, who says they are a cloud-based hybrid between a split model and a 100% transaction-based model.

That resonated with agents. Elizabeth Riley joined eXp in April 2015. “There were about 400 agents with the company then,” she says. “I was burned out where I was. I was the No. 1 agent in my market center and thought, ‘I’m kind of done.'” Looking for somewhere that would “fill her soul,” she met Sanford and says, “He was so authentic and excited about building a brokerage for agents, by agents. It was a different narrative than what I was used to in the real estate industry,” she says.

Austin, Texas-based Riley says she loved the idea of the stock. “I didn’t understand it much, but I followed my gut.” Her thought was that if it works, it could be amazing. If it didn’t, she could always go to another brokerage. It’s safe to say that, for Riley, it works. “I am able to collaborate with agents all over the country who are doing bigger things than me. All of a sudden, I’m an owner of a company, and when you’re an owner, you look at things differently.”

It’s what also attracted Nashville-based agents Jay and Ashley Nelson. “We love collaborating with other agents. When you partner with agents, everybody’s got skin in the game,” says Jay. The Nelsons have 2,180 “partner agents,” these are agents who they recruited and now earn a percentage of their commission.

For the naysayers who say that the Nelsons only recruit agents, Jay says, “I sell an average of 50 houses a year, plus we’ve built the brokerage, why can’t I do both?” And, he echos what many of the agents I interviewed for the article have said, “When you care about your agents more than you care about yourself, you can build [what may become] the largest real estate company in the world, and that’s how Glenn makes decisions. It’s always in favor of the agent.”

Acting on agent feedback

Sanford highlights the fact that he was one of the first in the industry to use the Net Promoter Score to calculate agent satisfaction. “Our agents are always telling us what they want us to improve. We [eventually] see themes bubble up, and that’s when we know what to add to our ecosystem,” says Sanford. One example is healthcare, he notes. “That came up in 2017-2018, so in 2019, we introduced healthcare initiatives.”

What’s to come for eXp

Sanford says he is continually evolving the company, including hiring new-to-the-industry agents, which he didn’t do when he first started.

He’s also had to evolve his leadership style and team. “It takes a highly qualified team to make all this stuff happen. When I was a small broker-owner, there was a lot of stuff that you didn’t have to get right because you were under the radar. As a big, national brokerage, there’s very little you can get away with because of the size and complexity of the brokerage. So, figuring out how to get the right people that have the knowledge, credibility and connectedness to make this all work is something I had to learn,” says Sanford.

Sanford notes that in addition to core services, like title and mortgage, he is excited to improve other products and services available in the ecosystem for agents. “Financial planning and tax services are high on my list.”

He also discusses eXp Commercial and a plan “to innovate on the ideas that help agents be better agents, whether its working internet leads or differentiating themselves in local markets.”

Whatever is next for eXp, it may be partly driven by past Keller Williams CEO Mark Willis, although that remains to be seen. Willis is currently hammering out a settlement with Keller Williams to free him up to join eXp.

For Sanford, what’s next, is whatever his agents want. “I want to innovate on the idea that we just want to help agents be better agents, whether it’s on the business side or personal side — ideally a mix of both.”

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