Is eXp Realty a Pyramid Scheme? Real Estate MLM Truth

exp reality review

This post is an unbiased review of network marketing cum real estate brokerage company eXp Realty.

The company claims to provide unique services like commercial brokers, relocation specialists and help with property buying/selling processes.

In this post, we will discuss what exactly eXp Realty is, its joining process & fees, compensation plan, and lastly our personal review regarding this company and its activities.

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eXp Realty
FounderGlenn Sanford
When Started2009
Head OfficeBellingham, WA, US
Opportunity TypeMLM
ProductsReal Estate Brokerage Service
Websiteexprealty.com
Joining Cost$149

What is eXp Realty?

Glenn Sanford is the founder, chairman and CEO of eXp Realty, which started in 2009.

exp realty founder

eXp Realty says that they make finding and buying a home easier for their clients. eXp Realty is a global online brokerage that claims to be powered by top agents and cutting-edge technology.

eXp Realty reported, in 2021 their revenue crossed $3.8 Billion.

As per similar web statistics, most visitors of exprealty.com are from the United States (90.23%), Canada (7.08%), and Philippines (0.66%).

eXp Realty is publicly traded on NASDAQ (EXPI) and it claims to offer shares as a reward to its agents.

eXp Realty has 67,000+ and 4,000+ active agents in the USA & Canada respectively. eXp Realty is expanding operations to France, India, Australia, South Africa, Portugal, Mexico and the UK.

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eXp Realty Joining Process

To be an eXp Realty Agent, one has to pay $149 as a start-up fee and an $85 monthly cloud brokerage fee.

eXp Realty Joining Cost

An agent has to pay $25 per transaction as broker review fee and $40 per transaction risk management fee, which caps at $500, after that it is waved off.

eXp Realty offers training and some virtual tools to agents in exchange for the fees charged.

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eXp Realty Products

eXp Realty affiliates market and sells listed properties to clients. You can find the property catalogue on eXp Realty website here.

Agents receive commissions on the trading of properties to clients.

exprealty customer review

On trustpilot.com, there was only a single review on eXp Realty services and that expresses its agent has very little knowledge about real estate.

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eXp Realty Compensation Plan

The incomes in the eXp Realty compensation plan are:

80/20 Rule

eXp reality provides straight 80% commissions to the agent who made the transaction. The remaining 20% is kept by eXp reality, part of it is used to provide commission to upline agents.

eXp Realty Commission Split

Agents receive 100% of their sales amount, after reaching the $16,000 cap limit of paying 20% deductions.

Later, they are charged $250 on every transaction till the $5,000 cap limit and afterward transaction fee is reduced to $75.

Hence, transaction fees are reduced from 20% to $250 and last $75 with a rising total sales amount.

Downline Sales Commission

Agents can do recruitment to earn commission on sales made by new agents.

Personally recruited agents are considered under tier 1, which is downline level 1. When tier 1 agents recruit new agents, they are counted in tier 2.

FLQA are Frontline Qualifying Agents, who are active and make at least 1 sale in the last 6 months.

Downline LevelseXpansion ShareeXponential ShareRequired FLQA
Tier 13.5%0 – 4
Tier 20.2%3.8%5 – 9
Tier 30.1%2.4%10 – 14
Tier 40.1%1.4%15 – 19
Tier 50.1%0.9%20 – 24
Tier 60.5%2.0%25 – 39
Tier 70.5%4.5%40+

When your tier-1 agents make sales with eXp Realty, you earn 3.5% of the total amount.

For example, if you recruited john and he makes a sale of $10000, then 3.5% (eXponetial share) of it, i.e. $350 will be your commission.

eXpansion & eXponential Share

Agents have to meet the required FLQA criteria to get both eXpansion & eXpotential share commission. If an agent fails to maintain the required FLQA then only eXpansion share is offered.

For example, if you want to earn a total of 4% (0.2% eXpansion + 3.8% eXpotential) from the deal made by a tier-2 agent named Mary, then you need to have 5 to 9 FLAQ in the downline. Otherwise, you will get only 0.2% on Mary’s sales and not a major one eXpotential share.

The same scenarios are for further tiers.

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To Be Concluded

Hope the above explanation helped you to understand the eXp Realty compensation structure.

eXp Realty is among the fastest-growing real estate brokerage services providers, as it has a unique business structure.

eXp Realty is different from other regular MLM where individuals have to make deals of million-dollar properties and not sell some snake oil products.

Controversies

In early 2019, the California Department of Real Estate (CDRE) filed a complaint against eXp Realty for several state regulations violations.

On June 24 2019 eXp Realty was sued by EXP Realty Advisor Associate for trademark infringement. Plaintiff filed lawsuits against eXp Realty in South Newyork district court.

Re/Max real estate competitor of eXp Realty has filed a lawsuit on August 27, 2021. Re/Max blamed eXp Realty has illegally interfered in existing contracts, which later got settled.

While a class-action lawsuit against eXp Realty for violating Telecommunication Act is filed by David W. Kaznecki. This lawsuit is in the Florida Southern District Court of August 2021. Plaintiff alleged he was kept receiving text messages from eXp Realty without concern and violated privacy.

Easy Compensation Plan

It offers unique services using the MLM concept. Its compensation plan is also simplified, Agents don’t need to calculate & maintain PV-BV.

The most challenging task is of having active agents in downlines, otherwise uplines’ get very little commission from indirect downlines.

Here the difference of 0.1% in commission rate, adversely affects earnings, as Agents are selling properties and not some cosmetic combos resulting in requirements of high-level MLM skills.

Hefty Fees

Most MLMs are free to join, but here agents have to pay for joining as well monthly $85 platform cost.

There are already real estate marketplaces available that offer some free listings and one doesn’t need to pay to enter costs.

eXp Realty says they provide training, CRM and other virtual tools. But how valuable and worthy these tools are, can only be understood after personal use.

Moreover $65 is also changed on every transaction and is waved off after paying $500 in total transaction fees, which is equal to doing 8 deals.

80/20 commission split is the backbone of its revenue share plan and offering commission to upline agents.

Overall all capping rules convey, eXp Realty takes major transaction charges from newly enrolled agents and not from agents who have closed many deals.

Should I Join eXp Realty?

First of all eXp Realty is not for everyone like other MLM companies. Even in normal companies, the MLM success rate is low, hence in eXp Realty, you will need to work extraordinarily to succeed.

Also, it is not any money circulation scheme such as Ponzi or Pyramid.

It is for professional agents and brokers. So agents can take look at their stance to understand it better and take the call.

eXp Realty’s 2020 US income disclosure statement says, 75% of agents make commission between $2,500 to $100,000 per annum. While only more than 1% of agents make $500,000 per annum who are the top earners.

eXp Realty Income Disclosure

At last, must answer these 2 questions to yourself, before joining it.

  • Is it worth paying joining & transaction fees for the eXp Realty marketplace?
  • Can you make enough from recruiting active agents, so you can share 20% from your deals?

Read: LegalShield Review

eXp Realty

$149
5

Company Profile

6.0/10

Compensation Plan

5.0/10

Products

4.0/10

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