How Does Revenue Sharing Work?

In August 2022, we launched our Revenue Sharing program and are excited to spotlight it as one of the five pillars of our brokerage. That month alone, we paid out $7,955 in revenue share. Although it’s small now, we expect to grow this number exponentially over the next year.

Revenue sharing allows our brokers to benefit from their contribution to the growth of our company, which I love.

I like to think of our Revenue Share model as a way for any broker to create passive income without having all the hassles of managing licenses, insurance, payroll, admin., etc.

Basically, it allows a broker to build a Brokerage Without the Brain Damage of running a traditional brokerage.

I often see brokers make the mistake—once they start funding a lot of mortgages—of thinking that the next logical step in their career is to start a brokerage.

In the vast majority of cases, they find that their personal production and income goes down, while their frustration and stress level goes up.(I share my experience here)

This is because running a brokerage is not the same thing as being a successful broker. They are two completely different businesses.

So how can a mortgage broker build a brokerage without the aforementioned brain damage?

Two words. Revenue Share.

What is Revenue Share?

Revenue Share is a percentage of revenue that agents earn for attracting other agents who generate revenue for the company.

All Pro brokers at BRX are on a capped 85/15 split. With revenue sharing, when an agent closes a deal, a percentage of the company's 15% goes back to the agent who sponsored them.

Let me break this down some more. The revenue share is paid by BRX from BRX’s commission of 15%, not from the agent's commission. We’ll refer to this 15% as “company money.” Revenue share is paid on every deal until the agent caps for the year and no more company money is earned.

The cap is $15,000 in gross commission income paid to BRX Mortgage. This totals $100,000 in total commissions. $100,000 x 15% = $15,000 paid to BRX Mortgage. At that point, the agent is on a 100% split until the end of the year, when their cap resets. (We currently have 3 agents on 100% split, with more to follow.)

Why is Revenue Share Important?

Revenue share allows a broker to build both passive income and a retirement plan. The mortgage industry has no retirement plan, and brokers generally have to work until they can’t, or no longer want to, work.

I believe that, if you help grow a company, you should be able to benefit from the growth of that company.

Which is why I love revenue sharing.

How Revenue Share Works

There are four tiers of Revenue Share payout:

Any agent you personally sponsor will be on your Tier 1. You cannot, nor would you want to, add an agent to any other tier.

Whenever an agent you personally sponsor attracts another agent, that new agent is now on your Tier 2. This continues in this manner until you have agents on your Tier 4.

The revenue share payout is based on two factors: the number of agents you personally sponsor, and your personal production.

Base Revenue is earned based on the number of agents you personally sponsor. You are paid this as long as you are licensed and with the company.

Your personal production is determined by the average number of mortgages you have funded over the past 90 days.

Let’s Look at Some Numbers

Let’s use the example of Bob. Bob sponsors 1 new agent per year, for a total of 5 agents over the next 5 years.

This is a passive example that someone could do without disrupting their personal mortgage business.

Let’s also assume that Bob helps his agents do the same.

Bob would now have 5 agents on his Tier 1 and 25 agents on his Tier 2.

Keep in mind that Bob can earn a Base Revenue share of $3,000 per agent in his Tier 1 and $2,000 per agent in his Tier 2. This assumes that all his agents cap every year (more on this later).

This means that Bob could be earning $65,000 in Base Revenue per year.

Now, if Bob averages 3 loans a month, he would be earning a Top Revenue share of 4% on his Tier 1 and 3% on his Tier 2. This means that Bob could earn $4,000 per agent in his Tier 1 and $3,000 per agent in his Tier 2.

Which means that Bob could be earning $95,000 in Top Revenue per year.

To be fair, it is unlikely that all of the agents in Bob’s organization will cap, so let’s assume that half of them cap, which would mean that Bob could earn $47,500 per year in Top Revenue share, simply by bringing on one agent a year for 5 years, and helping them do the same.

Let’s Look at a More Active Example

Let’s assume that Mary is a real go-getter. She goes out and recruits 10 agents in her first 2 years. For the next 3 years, she shows her 10 agents how to recruit 2 agents per year.

In the 5th year, Mary would have 10 agents in her Tier 1 and 60 agents in her Tier 2.

Since Mary is a baller and crushes 100 mortgages a year, she earns Top Revenue share on her entire organization.

If all her Tier 1 agents capped, she would earn 10 x $4,000 = $40,000/year. On her Tier 2, she would earn 60 x $3,000 = $180,000/year.

This would total $220,000 per year in Top Revenue share.

Now again, it is unlikely that everyone in her organization will cap, but even if half of them cap, Mary would be earning $110,000 a year.

Keep in mind that this does not include any revenue share from Mary’s Tier 3 and Tier 4 agents. I left out the additional tiers to keep the math simple, but as you can imagine, the number can add up.

It really is the power of compounding, but it is working for you, the broker.

This is also one of the reasons for eXp’s rapid increase in agents and income.

What happens when an agent retires?

Provided the agent maintains their license with the BRX they will continue to earn revenue share. I recently spoke with an agent who is 49 and she plans to retire at 55. She is intending on using this, and selling her book of business, as a way to supplement her income.

If you want to find out more about how we are transforming the mortgage industry, join me on Thursday for a live info session:

The info session is completely anonymous, and you can ask me any questions you like on anything to do with our brokerage.

Heck, you can ask me anything at all. I am an open book.