eXp Realty Scam: Pyramid Scheme or MLM? [Review]

If you’re interested in buying or selling properties, you may have come across eXp Realty. It’s a real estate brokerage that offers services for property transactions. 

It’s possible that you learned about eXp Realty from a friend or family member who recommended it as a way to earn extra income from home. 

As an online entrepreneur, I have reviewed many similar online opportunities over the years. So I can tell you what you need to know.

First of all, let me be clear that I have no affiliation with eXp Realty, and I’m not getting paid to write this review. So you can trust that I’ll give you an unbiased assessment.

At the end of this review, I’ll share an alternative program that has helped me make a full-time passive income online.

What is eXp Realty?

eXp Realty is a subsidiary of eXp World Holdings, which is publicly traded on the Nasdaq stock exchange, and the SEC has verified that everything is above board.

Founded in 2009 by Glenn Sanford, eXp Realty now has over 20,000 real estate agents across all 50 US states and most Canadian provinces. The best part? Agents split their commissions 80/20 up to $16,000 and pay just an $85 monthly fee. That fee gives you access to a ton of useful tools and resources, like kvCORE, Skyslope, eXp World, Workplace by Facebook, and many others.

And here’s where it gets really interesting: since eXp Realty is publicly traded, brokers have the chance to own a piece of the company. You could receive shares each year when you sell your first home or when the company hires a new broker who sells their first home. How cool is that?

On top of that, high-performing agents who meet a simple benchmark through the ICON agent incentive program can get back the full $16,000 cap in company stock. Plus, eXp Realty offers a program similar to a 401k, where agents can use 5% of their gross commission to purchase eXp stock at a 20% discount to the current market price.

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Is eXp Realty An MLM?

When it comes to whether eXp Realty is an MLM, the answer is a bit of a mixed bag. While the company doesn’t appear on Wikipedia’s list of multi-level marketing companies, they do offer a compensation plan that resembles MLM-like revenue sharing.

So, what exactly is an MLM company? Essentially, an MLM has three main components: a product or service for sale, a way for distributors to profit from sales, and an opportunity for distributors to earn money by recruiting others to sell the same product or service.

Think of it like a triangle, where you’re at the top and everyone in your downline is below you. In an MLM, you earn commissions from everyone in your downline, which can be very lucrative if the person at the top recruits ten people, and each of those ten recruits ten more. With just ten recruits, you could make $1100.

For most people in an MLM, the goal is to earn a passive income from recruiting others, rather than a one-time commission from selling products. Unfortunately, this means that those at the top of the pyramid tend to have the most financial success, while those at the bottom have the least.

While eXp Realty doesn’t fit the traditional MLM mold, having a large downline is still important for agents who want to be successful. So, while it’s not exactly an MLM company, there are certainly some similarities in terms of the compensation plan.

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Is eXp Realty A Pyramid Scheme?

No, eXp Realty is not a pyramid scheme. It is a legit real estate brokerage where agents can make money by offering services to buy and sell real estate to their clients. 

A pyramid scheme promises members money or services in return for recruiting others, and it is unsustainable and often a scam. In contrast, eXp Realty’s agents earn money by providing valuable services to their clients.

In a pyramid scheme, those at the top of the pyramid receive a portion of the payments from every newly recruited member, making it profitable only for the company directors. The scheme continues as long as members recruit and funnel money to the top of the pyramid, with no valuable goods or services being sold. Eventually, the pyramid will fail if there are no new recruits or other sources of income, leaving most participants at the lowest level of the pyramid with lost money.

A well-known example of a pyramid scheme is Vemma, which sold energy and weight loss drinks. The FTC accused Vemma of operating a pyramid scheme in 2015, as the company paid more to recruit new members than to sell products. New members had to pay $600 for starter packages and hundreds more for monthly products, but the majority of participants lost money.

In summary, eXp Realty is not a pyramid scheme, but a legit real estate brokerage. Agents can earn money by providing valuable services to their clients, and the company does not promise money or services in return for recruiting others.

You may read our article on the difference between MLM and pyramid schemes here.

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Is eXp Realty a Scam?

No, eXp Realty is not a scam. It’s a legitimate real estate brokerage firm that has been around for a while now. However, that doesn’t mean it’s an easy job to make money as an eXp Realty agent.

It’s important to note that being a real estate agent with eXp Realty is not like any other regular job opportunity. Instead, it’s more like starting a new business. While it’s true that new agents can take anywhere between 3 to 6 months to close their first sale, in some areas where competition is fierce, it can take even longer.

That’s why it’s essential to have at least two years of savings before you start this career, as it will ensure that you have a sufficient financial safety net. 

It’s also important to realize that being a real estate agent means that you may have to work beyond the typical daily schedule, including weekends and evenings, which can impact your family time. If you’re not willing to put in the work every day to make sales happen, it won’t take long for you to start looking for another career option.

How eXp Realty’s Revenue Sharing Works

Revenue sharing is how eXp Realty compensates its agents and brokers. But, what exactly is revenue sharing?

Basically, revenue sharing is when a company distributes a portion of its total revenue to its contributors or participants. In eXp Realty’s case, current employees or contractors receive compensation based on their contribution to the company’s growth.

The best part is that eXp Realty doesn’t have to spend a lot of money on marketing or hiring employees to fuel its growth. By eliminating brick-and-mortar offices and housing all support and training in a virtual office known as eXp World, the company has significantly reduced its overhead costs compared to a traditional real estate broker.

Unlike profit sharing, where the money that remains after deducting costs is divided, revenue sharing allows the company to share revenue with its brokers. This way, eXp Realty’s agents receive a portion of the cost savings, which helps the company grow.

So, how does it work? When you recruit a new broker to eXp Realty, you get a percentage of the money that broker brings in, as long as you and the new broker work for the company. Additionally, you’ll receive a portion of the money when that broker recruits another broker who brings in sales for the company. This benefit is available for seven generations, also known as tiers.

That’s it! That’s how eXp Realty’s revenue share works. It’s a win-win situation for both the company and its contributors, as it allows eXp Realty to grow while providing its agents with an additional source of income.

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eXp Realty Compensation Plan

If you’re thinking about joining eXp Realty as an agent, it’s important to know how their compensation plan works. Here are the key details:

Commission Structure

eXp Realty pays a commission of 80% to the agent who closed the deal, with the remaining 20% going to eXp Realty. Some of this 20% is then used to pay commissions to agents higher up the chain.

Transaction Fees

When an agent sells $16,000 in goods or services, they receive 100% of the proceeds. However, they will be charged a transaction fee of $250 for each transaction until they reach $5,000 in fees. Once they reach $5,000, the transaction fee is reduced to $75. So, as the total sales amount increases, the transaction fees remain at $75.

Recruiting Other Agents

Agents can recruit other agents to join eXp Realty and profit from their sales. Tier 1 agents are those who brought themselves into the company and can recruit Tier 2 agents. Active Frontline Qualifying Agents (FLQAs) are agents who have made at least one sale in the last six months.

Commission from Recruiting

If you are a Tier 1 agent and you recruit Tier 2 agents, you receive 3.5% of the total amount when your Tier 1 agents sell something through eXp Realty. For example, if your Tier 1 agent, John, makes a $10,000 sale, you would earn a commission of 3.5%, or $350.

FLQA Requirements

Agents must meet the FLQA requirements to receive both the eXpansion share commission and the eXpotential share commission. If an agent fails to meet the FLQA requirements, they are only given the eXpansion share commission. To earn a total of 4% commission (0.2% eXpansion plus 3.8% eXpotential) from a deal made by Tier 2 agent Mary, you’ll need 5 to 9 FLQAs in your downline. If you don’t have the required number of FLQAs, you’ll only get 0.2% of Mary’s sales.

Overall, the eXp Realty compensation plan provides a clear path for agents to earn commissions on their sales and recruit other agents to increase their earnings. Just make sure you understand the FLQA requirements to maximize your commission potential.

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How Much Does It Cost To Join eXp Realty MLM?

So, you’re thinking of becoming an eXp Realty Agent? Cool! Here’s the lowdown on the fees you’ll need to pay:

First up, there’s a one-time fee of $149. Not too bad, right? Then, there’s a monthly fee of $85. That’s like Netflix and Spotify combined, but hey, you’ll be getting virtual tools and training in return, so it might be worth it.

Now, let’s talk about the transaction fees. You’ll need to pay a broker review fee of $25 per transaction, and a risk management fee of $40 per transaction. But here’s the good news: the maximum you’ll need to pay for these fees is $500. So, it’s not like you’ll be shelling out thousands of dollars every month.

Overall, eXp Realty provides pretty sweet training and tools for its agents, but of course, you’ll need to pay for it. 

Pros and Cons of Joining eXp Realty

If you’re considering eXp Realty as your next career move, you may be wondering what the company is really like. Here are some pros and cons shared by agents who have worked with eXp Realty:

Pros

• eXp Realty offers a great opportunity for those who have always wanted to become a real estate agent.
• Agents have the chance to purchase stock in the company, which can be a valuable investment opportunity.
• The company’s unique multi-level marketing structure provides opportunities for growth and increased earnings.

Cons

• It can be difficult to make money as an eXp Realty agent, and some agents have reported struggling to earn a livable income.
• Monthly expenses associated with the company can add up quickly and impact your bottom line.
• Building a large customer base is essential to success, and it can take time to develop this clientele.
• Commissions are split 80/20, which may not be as favorable as some other real estate agencies.
• The company’s structure and approach can be overwhelming and may not be the best fit for beginners or those who prefer a more traditional approach to real estate.

Ultimately, whether or not eXp Realty is the right fit for you will depend on your individual goals, preferences, and work ethic. It’s worth doing your research, speaking with current and former eXp Realty agents, and carefully considering all of the pros and cons before making a decision.

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Why I Don’t Recommend Working For eXp Realty

The Good Reviews are Written by eXp Realty’s Agents

You might have come across some positive reviews of eXp Realty, but keep in mind that most of these are written by the company’s agents. As their goal is to recruit more downlines and earn more commissions, these reviews can be biased and not completely trustworthy. They are essentially sales pitches that don’t reveal the hidden costs and challenges of making money as a real estate agent.

Instead, I recommend reading reviews written by non-affiliates of eXp Realty for a more objective perspective.

Very Few People Can Make Money With eXp Realty

Success can be hard to come by at eXp Realty, as your earnings are based on the number of transactions you have each month. However, real estate is not a business where you can easily generate repeat customers. Most clients only need your services when they’re buying or selling a home, and nothing more.

Many eXp Realty agents end up focusing on recruiting new agents rather than selling properties, leading to disappointment and financial loss for those who don’t succeed. If you’re considering working as a real estate agent, it’s important to have a savings fund that you can fall back on during slow months.

MLM-Like Commission Distribution

While eXp Realty isn’t an MLM, it does have a commission distribution structure that’s similar to one. Those at the top of the hierarchy make the most money, while those at the bottom struggle to make a living. This has led many people to question if eXp Realty is a good career opportunity.

Exaggerated Income Claims

Like many other MLMs, eXp Realty makes exaggerated income claims. However, in reality, very few people make a good living by promoting eXp Realty. Some agents even use misleading headlines like “Join my team and get a million leads” to lure people into their downline.

Recruiting is a Must

If you want to succeed at eXp Realty, you’ll need to put a lot of effort into recruiting. In fact, eight out of ten ways to earn money with eXp Realty require recruiting. This has created a culture where people are solely focused on recruiting rather than selling real estate.

No Standard Office Space

One downside of eXp Realty’s virtual office setup is that agents are responsible for finding and paying for their own office space. This can be a challenge for those who prefer the structure and resources of a physical office.

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Final Verdict

If you’re looking to make money in real estate, I wouldn’t recommend joining eXp Realty. In my experience, it can be tough starting out as you work to sell your first property and recruit new agents to boost your eXp Realty commission. Plus, you might feel pressured to get your family and friends involved in the business, which isn’t always comfortable.

While eXp Realty has some similarities to multi-level marketing companies, it’s not exactly the same thing. However, it’s true that many brokers leave the company, and the pressure to succeed is often a major factor.

If you’re interested in earning money and having a flexible schedule, I’d suggest starting your own online business instead. 

With an online business, you can promote whatever you want and have full control over your earning potential. And unlike MLMs, building a legitimate online business is sustainable and can provide a reliable source of passive income.

In the next section, I’ll share some tips on how to build a legitimate online business that can provide a full-time income within a year.

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Is There a Better Alternative to Make Money Online?

Starting an online business can be overwhelming, especially if you’re new to the game. But fear not! I have a great platform to recommend to you that will make your life a whole lot easier than joining eXp Realty as an agent. It’s called Wealthy Affiliate, and it’s my #1 recommended platform for building an affiliate marketing business from scratch.

When you sign up for Wealthy Affiliate, you get access to everything you need to get started, including top-notch web hosting services, keyword research tools, community support, comprehensive training, writing tools, and other software to help you build your online business step-by-step.

And the best part? You can register for a free account and start with affiliate marketing right away without spending a dime. If you like the platform, you can upgrade to premium membership to unlock even more features, but there are no upsells afterwards.

You may read our article about the difference between MLM and affiliate marketing.

But you might be wondering, how much can you actually earn with Wealthy Affiliate? Well, let me tell you about a 21-year-old student who was able to make $7,395 in just one week using what they learned from Wealthy Affiliate. That’s more than $1k a day!

You can read our full review of Wealthy Affiliate here.

Wealthy Affiliate has been around for 15 years and has over a million members, so you can see how popular this platform is. And there are many success stories to inspire you, including some of the ones I’ll mention below.

If you’re interested in signing up for Wealthy Affiliate, it’s easy and affordable. The platform has a simple pricing scheme with a free starter membership and a premium membership for only $49/month or $395/year. As a starter member, you’ll have access to the community, live chat, over 500 training modules, 2 classrooms, networking, commenting, 1 free website, and access to the keyword tool.

So what are you waiting for? Sign up for a free account today and start building your online business with Wealthy Affiliate. You won’t regret it!

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