T
he real estate brokerage landscape is witnessing a seismic shift, with profit share and revenue share models gaining traction. eXp Realty and The Real Brokerage have been at the forefront of this movement, but Keller Williams, founded in 1987, is often credited as the pioneer of the profit/revenue share model.
Gary Keller's vision for KW was to empower agents by treating them like legitimate partners in the business. Under this model, market center owners share approximately half their monthly profits with associates, provided the market center is profitable that month. This approach has yielded over $2 billion in profit share payouts since its inception.
Market center owner Marian Benton attributes the success of KW's model to its transparency and shared responsibility among agents and owners. "The profit share puts everyone on the same page," she explains. "We all have a common goal: making the business profitable." This sense of unity fosters a strong work ethic, as agents are invested in the company's financial well-being.
KW's director of operations, Kelly Cote, notes that not every brokerage can replicate this model's success. "It takes a special individual to commit to sharing profits at a high level," she says. The profit share model encourages collaboration and partnership between agents and market center owners, whereas revenue share models can create an adversarial relationship.
eXp Realty has experienced remarkable growth under its revenue share model, with over 85,000 agents as of March 2024. CEO Leo Pareja credits the company's focus on production and operational excellence for its success. "We are the most productive company in the U.S.," he boasts. eXp's top teams have achieved incredible results, with some selling over 69,000 homes in 2023.
However, not everyone is convinced of the revenue share model's merits. Former eXp agent Jeff Chubb moved to Real, which operates a similar model, citing concerns about the focus on recruiting and the potential for downlines to compete against one another. "At Real, you have more of a true communal company," he says.
Despite these criticisms, Pareja defends eXp's approach, arguing that it allows agents to benefit directly from their growth efforts. In 2023, eXp paid out $198 million in revenue share and an additional $34.7 million through its agent growth incentive program.
The Real Brokerage has also adopted a revenue share model, but with "guardrails" in place to prevent the focus on recruiting from overshadowing production. Founder Tamir Poleg emphasizes the importance of maintaining a balance between recruitment and sales performance.
