Key Highlights
- The Motley Fool anoints eXp World Holdings as the Amazon of real estate.
- EXp’s revenue growth rate far outstrips Zillow, Redfin and Opendoor
- Motley Fool points to eXp’s distinct business model
Who is the Amazon of Real Estate, according to The Motley Fool?
The Motley Fool, founded by the brothers Tom and David Garner in 1993, is an investor advisor service focusing on educating and improving subscriber investment portfolios, real estate holdings, personal finances and businesses. (The Motley Fool’sreal estate holding service is called Millionacres.)
Since Amazon is always capturing headlines for one reason or another (Bezos handing over the reins to Andy Jassy, Amazon’s market cap of $1.7T, Amazon “owning” some 40% of online shopping, etc.), The Motley Fool was recently asked, “Who is the Amazon of Real Estate? The Fool’s answer? Not the usual suspects like Zillow, Redfin or Opendoor.
The Motley Fool’s Answer is eXp World Holdings
According to The Motley Fool, any company that could conceivably be compared to Amazon must generate massive revenue growth.
Here is how The Fool compared Q3 2019 revenue growth rate to Q3 2020 revenue growth rate in virtual real estate sales among three real estate businesses:
Company Q3 2019 Q3 2020 % Change
Zillow $745M $657M (11%)
Redfin $239M $2.37M (0.7%)
eXp World $282M $564M 99.9%
eXp World Holdings, parent company of eXpRealty, has Unique Business Model Based Solely on Commissions Earned from Selling Houses
During the last quarter, eXp sold over $23B worth of houses, dwarfing Zillow and most every other competitor. Also, eXp does not own any houses as do iBuyers that then have to be quickly turned around and sold in order to generate razor-thin profits.
eXp’s revenue growth’s bottom line is based solely on commissions that its agents earn by selling homes. On the other hand, iBuyers operate on a “middleman” revenue growth model that is based upon the inventory it buys, renovates, finances and then sells, all done as quickly as possible to keep financing costs down.
To compete head on with iBuyers, EXp has introduced its Express Offers service to help homeowners needing to sell their homes quickly BUT eXp does NOT take ownership of those “fast sale” homes as do iBuyers.
eXp’s Sole Focus – Helping Realtors Sell Houses via its Internet PlatformVirBELLA
iBuyers truly believe that the internet will render real estate agents irrelevant. eXp, on the other hand, has put real estate agents at the very center of its universe. This virtual real estate business first built and then adapted VirBELA to help realtors sell houses. At this point in time, eXp is closing in on attracting and engaging nearly 40,000 agents who are selling homes in some nine countries around the world.
eXp Has Superior Agent Compensation Structure
EXp stands alone among all other brokerages (both virtual and traditional) regarding its agent compensation structure. EXp agents work on a 80/20 commission split until they pay $16,000 to the brokerage for the year. After that cap of $16,000, the agent keeps ALL 100% of the commissions she/he has earned via selling houses for the year.
Additionally, if the agent recruits another agent to eXp, that recruiting agent gets 3.5% of the recruited agent’s commissions up until the $16.000 cap is hit. No other brokerage has this kind of recruiting incentive for its respective agents.
eXp, like Amazon, has Optionality.
A few years ago, eXp World acquired VirBELA, a virtual world platform that helps real estate agents sell houses online. Just as Amazon has subsidiary businesses such as cloud computing, Prime, movies, etc. that give it optional revenue streams, eXp has VirBELA. EXp continues to use VirBELA to help its agents to sell houses AND it also “offers” VirBELLA to other businesses and government agencies to help them fulfill their respective needs.
Currently, eXp is considering tapping in to VirBELA in order to compete with Zoom Video Communications in the space of virtual meetings.
As Realtor and/or Investor, The Motley Fool Encourages Consideration of eXp World.
Agents are flocking to eXp as its agent compensation structure stands alone among virtual and traditional competitors. Additionally, eXp World Holdings valuation on the Nasdaq is growing leaps and bounds to the tune of +200%.
Thanks to The Motley Fool.
