eXp Realty Review – Legit Or Real Estate Pyramid Scheme?
You probably came across eXp Realty on social media or got it recommended by someone you know as a good opportunity to make money, and now, you want to ascertain if it is a scam or not.
Well, regardless of how you found out about this company, reading this will help you decide if it is a worthy investment of your time and money.
In this eXp Realty review, we’ll be discussing…
(1) What eXp Realty is all about, (2) the legitimacy of the company, (3) the profitability of its business opportunity, and (4) if eXp Realty is for you.
I understand how valuable your time is so, shall we get started immediately?
Founder: Glenn Sanford
Price to Join Opportunity: $149 + $85/monthly broker fee + various miscellaneous fees
Recommended? Only if becoming a real estate agent is a passion of yours and you’re willing to accept the fact that you probably won’t be making money anytime soon when you join eXp Realty. Otherwise, you may want to check this out instead.
Overall Business Opportunity Rating:
Quick Summary: Before you invest your time and money in eXp Realty as an agent, make sure that you understand exactly what the company is all about.
As a real estate agent, your main income source will come from selling a properties, and closing sales in this business is a tough nut to crack.
Consider the fact that most entrepreneurs have trouble convincing people to buy a product that only cost tens or hundred bucks, imagine selling something that’s worth thousands of dollars. You will also be spending money on monthly broker fees, gas money when meeting clients and showing them the properties, among others.
The good thing about eXp Realty is that it gives you a chance to receive commissions from the sales made by the other agents under your team. But even then, it is still very likely that you’ll lose money in this business rather than earn some if you’re not careful, and I will explain why below.
Nonetheless, no matter if you decide to become a real estate agent with eXp Realty or you’d rather look for other income opportunities that better suits your passion and interests, here are some training materials for the direction you choose…
FOR EXP REALTY AGENTS
IF EXP REALTY IS NOT FOR YOU
What is eXp Realty?
eXp Realty claims to be the nation’s first “Agent Owned Cloud Brokerage” that also uses a Multi-level Marketing (MLM) business model to pay its agents.
The company was founded in 2009 by Glenn Sanford, a former agent at Keller Williams Realty (a real estate franchise).
eXp Realty was born after Glenn’s “realization” that “a cloud-based brokerage that offered revenue share was the future of the real estate.”
A cloud brokerage, in layman’s term, is a brokerage that does not have physical offices and conducts business entirely online using the Internet.
You can think of it like Amazon, but instead of selling various merchandise, eXp Realty focuses on real estate services such as buying and selling properties.
Perks of a Cloud Brokerage
The company claims that operating in the cloud provides a lot of perks and benefits to its agents.
For example, an agent doesn’t need to drive to the office to meet with his/her team in eXp Realty and can do transactions at home, even on pajamas.
Well, I can see the beauty in that since I am making my living from home too, but in a totally different way. And if that interests you, here’s how I make money online.
But back to eXp Realty, don’t other realty agents from “non-cloud brokerage” companies also do meetings through Skype, WhatsApp, etc.?
Nevertheless, one of the best perks a cloud brokerage is said to offer is that you won’t have to worry about paying for overhead expenses like electricity, water, rent, among others.
But if you think about it, aren’t these things benefit of the company and not of the agents?
And while eXp Realty prides itself as a cloud brokerage, a few teams of the company agents still put up their own offices in some states.
For example, the eXp Realty agents team called “Mark Z Real Estate Experts” have an office in 40020 W 12 Mile Road, Michigan, which begs the question…
What’s the point of joining a cloud brokerage if agents still feel the need to put up a brick and mortar office? Anyways moving on…
The company currently operates in the US, Canada, the UK, and Australia during this eXp Realty review. It deals with residential, commercial, REO, and luxury properties.
How to make money as an eXp Realty agent?
eXp Realty pays commissions to its agents using what is called the “Revenue Sharing” business model, which in this case, just a fancy way of saying MLM.
And like most MLM companies, there are two ways you can make money in eXp Realty.
eXp Realty Compensation Plan (Revenue Share Plan)
As an eXp Realty agent, you can make money every time you sell a property, like most agents of other real estate companies do.
You will also earn commissions from all the sales made by all the eXp Realty agents under your team.
Every sale you make, there is an 80/20 commission split between you and the company. You will keep sharing your commissions until the required cap is met.
What is a cap, you ask?
Well, the “cap” in real estate business commonly refers to the point at which the brokerage (eXp Realty) will no longer take a commission split, and you are then entitled to earn 100% of the commissions.
Caps are usually restarted annually, which in eXp Realty’s case, every contract year or the anniversary of joining the company.
As an eXp Realty agent, you cap when you pay $16k to the company, which equates to generating $80k in gross commission.
You can receive commissions from the sales activity of the other agents recruited by you and other people as long as they are under your team.
eXp Realty refers to this as the “Cascading Revenue Sharing Program,” whereas it is commonly known as a Unilevel program in network marketing.
In a Unilevel, the Tier 1 (Level 1) of your team will be filled with agents that you personally recruited into the company.
Tier 2 is reserved for the personal recruits of your Tier 1 agents; Tier 3 is filled with recruits of your Tier 2 agents and so on.
Important: eXp Realty will pay you down to the 7th level (Tier 7), and you will earn what is called an “adjusted gross commission income” (AGCI) from each sales transaction closed in your team made by all capped agents.
Yes, you will only earn residual commissions from agents who already managed to pay the company 16k worth of commissions.
So even if you have recruited tons of agents, but neither of them has capped yet, you won’t earn commissions.
But that doesn’t end there.
The amount of commissions you’ll earn from each person in your team is limited on each tier, and you will also need to personally recruit a certain number of agents if you want to earn from all 7 levels of your team.
Below are your potential residual recruitment commissions as an eXp Realty agent, including the requirements.
- Tier 1 – Have at least 1 personally recruited agent and you can earn up to $2,800/annually for every agent that capped
- Tier 2 – 5 personally recruited agents, earn up to $3,200/capped agent in Tier 2 every year
- Tier 3 – 10 agents, receive up to $2,000/year for every capped agent in Tier 3
- Tier 4 – 15 agents, receive up to $1,200/year for every capped agent in Tier 4
- Tier 5 – 20 agents, receive up to $800/year for every capped agent in Tier 5
- Tier 6 – 25 agents, receive up to $2,000/year for every capped agent in Tier 6
- Tier 7 – 40 agents, receive up to $4,000/year for every capped agent in Tier 7
eXp Realty Business Opportunity Bottomline
Now, while these commissions are lucrative, let me remind you that you can only earn commissions when you sell a property, and you’ll have to share a total of $16,000 of your commissions to the company.
Furthermore, you might be thinking you’ll just recruit people so you can earn more commissions on top of your personal sales.
Not a bad plan! Except for the fact that you will only earn recruitment commissions if (1) an agent has capped and (2) if you meet the required numbers of personally recruited agents.
Also, I don’t know if you noticed, but it seems like eXp Realty is trying hard to use jargon and fancy terms like “revenue sharing” and “cascading revenue sharing program,” which I suspect to steer away from being branded as an MLM.
Nevertheless, it doesn’t change the fact that eXp Realty is an MLM company.
I assume the company does this to avoid the prejudice of being called a pyramid scheme, which is a common misconception towards MLM companies.
To be fair, there is nothing wrong about using such fancy terms and who am I to judge a company based on how they call their compensation plan.
That being said, I have reasons to believe that there might be a chance that you’ll get sucked into doing unethical business practices to make money in eXp Realty if you aren’t careful.
I’ll explain in the remaining sections of this eXp Realty review. But in the meantime…
What I Like about eXp Realty
1. Chance to realize your dream of becoming a real estate agent
If dealing with houses and properties have always been an interest of yours, but you haven’t found the time to get on the ground…
Then eXp Realty might be a good place to start, I mean if you’re planning in getting involved in real estate business anyway.
The company provides ample training and support to aspiring agents from all walks of life.
During this eXp Realty review, the company provides regular online classes, webinars, and mentoring sessions.
That being said, just be realistic and set your expectations low, especially if you have no experience in the real estate business.
As I’ve discussed above, making money with this company won’t be a walk in the park.
2. You can become a shareholder
EXP World Holdings (EXPI) is listed on the NASDAQ exchange, and the company allows agents to become shareholders.
You can become a shareholder at eXp Realty by earning equity awards for various achievements, such as closing their first transaction.
You can also choose to be paid a small percentage of your commissions in stock at a discounted rate.
Kudos to eXp Realty for coming up with such an idea.
As far as I know, the best way for an agent to reach the peak of success and become financially free is by starting their own real estate agency.
But I imagine the upfront cost that would require. Not to mention the other fees, overhead expenses, and legalities you have to undergo so you can operate your business.
3. A “unique” MLM company
Now, I was torn into adding this into the good points of the company but I decided to anyway. I’ll just let you come up with your thoughts.
Because while eXp Realty claims to be the first cloud-based real-estate company, making them a virtual brokerage, I see not much merit on it, nor its “uniqueness” in the MLM industry gives you less competition.
Firstly, in the eXp World (the virtual brokerage world of the company), you won’t actually meet any clients.
The eXp World is more of a way to provide convenience for agents with intra-brokerage transactions like training sessions and human resources questions.
The eXp Realty agents still have to drive around and show clients houses themselves.
Furthermore, being a cloud-based brokerage doesn’t really make you better than the recognized brick and mortar real estate agencies that already exist.
Cloud-based brokerage or not, It doesn’t change the fact that there are countless other real estate companies out there with hundreds and even thousands of their own agents.
So, I don’t see the point of less competition contrary to what some affiliates of the company claim.
My Concerns about eXp Realty
1. You might not earn money
Yes, there is a good chance that you won’t be making money within your first months as an agent of eXp Realty.
Selling real estate properties isn’t as easy as selling a 50-dollar multivitamin, and to think most people even have trouble selling the latter.
Furthermore, it will be much harder to close real estate sales with eXp Realty because of little brand recognition with clients.
Recruiting people won’t save you too because agents under your team need to cap first before you can earn commissions from them.
Making A Full-Time Income From Home Without Selling And Recruitment Is Possible! Here’s How.
2. Monthly fees
Like most real estate companies, there is a sign-up fee that covers administrative fees when you join eXp Realty, and there are monthly recurring fees.
While it is normal to pay for your brokerage, you’ll need to consider the fact that you a few months of paying monthly fees to eXp Realty without any sales could get you on financial troubles.
That is on top of your expenses while doing this business, such as driving around meeting clients, showing them properties, and yes, paying for their coffee from time to time, hoping they’ll do business with you.
3. You’ll have to find many clients
Because the chance of closing sales is relatively low in the real estate business, it only makes sense for you to get as many clients and leads as you can.
Now, let me ask you this…
How many people you know right now is planning to sell/buy properties? Probably not a lot.
And of the people you know, how many of them trust you and are willing to transact with you on real estate business?
So unless you learn how to utilize the Internet to find regular clients online, making money with eXp Realty might never happen.
4. 80/20 commission split
Aside from the various hurdles you have to overcome to make sales, you must also keep in mind that you won’t be keeping 100% of your commissions at first.
The 20% of your commission will go to eXp Realty, and as stated by them, it will be used to :
- Pay agents their residual income, based on revenue sharing
- Fund company operations, provide you with new contents, marketing tools, etc
However, I do find the second part questionable nonetheless.
It’s because you are already paying the monthly brokerage and miscellaneous fees to the company.
I also understand the idea of “cap” like I discussed above, so shouldn’t the company just come out and say they’re taking 20% for themselves?
I would be cool with that knowing it is the norm in the real estate business, rather than saying its for something cheesy, etc., etc.
5. Can be overwhelming; not beginner-friendly
In an eXp Realty review by one of its agents on YouTube, the agent made it clear that there is a steep learning curve in doing this business.
He also added that you could easily get overwhelmed with the influx of new information every now and then.
If you’re set in becoming an agent, you’ll have to buckle up and learn as fast as you can.
You also have to filter the right info based on what you actually need at the moment, rather than sponging up everything that comes your way.
Information overload is a real thing, and losing track of what really matters in this business isn’t uncommon.
And with so much to think and do, you might get burn out before you even make back your initial investment.
Find Out How You Can Make Passive Income Online, Even As A Complete Beginner!
Cost to become an eXp Realty Agent
To become an agent, you’ll need to pay a one-time administrative fee of $149 for your start-up cost.
After payment, you will be given access to 50hrs+ of live training sessions per week, workshops, coaching sessions, lead generation, and business management tools.
Part of that fee will also be used for your new business cards, brochures, and other tools to hit the ground running.
On top of the $149 start-up fee, here are the additional payments as an agent:
- $85/month cloud brokerage fee
- $25/transaction broker review
- $40/transaction risk management fee
Is eXp Realty a Scam?
Based on what I know and the things I discussed above, I believe that eXp Realty is a legitimate MLM company in the real estate niche.
It provides real services to its clients and offers a legal way for people to make money.
Nevertheless, I can also see eXp Realty become a pyramid scheme depending on an agent’s perception and understanding of the business.
Because most agents will have trouble selling properties, it’s not a crazy idea to think that some will focus on recruitment to earn commissions from other people without making any sales themselves.
To prove that such thing is already going on within the company, there are people on the Internet who voiced their annoyance towards some eXp Realty agents harassing them to joining their team.
My Sincere Advice (if you need it)
Here’s the deal, eXp Realty is not a scam nor a pyramid scheme, but it is NOT for everyone.
If you are someone passionate about real estate business as well as building a sales team of like-minded individuals, then this opportunity might be for you.
However, I cannot recommend you joining this company for financial purposes because, based on the things above, I feel like there is very little chance that you’ll make a decent income as an eXp Realty agent.
And unlike most real estate companies, I also didn’t find any benefits like health insurance given to agents.
Nevertheless, the final decision is in your hands.
But if while reading this, you’ve realized that eXp Reality is not the income opportunity for you, but you’re still looking for a way to make money…
Then I highly recommend that you check out this program.
It is the same program that turned me from a nobody to somebody online, and it allowed me to earn not just a part-time but a full-time income from home.
I’ve shared my early income proof here: 2015, 2016, 2017.
Thank you for taking the time to read this eXp Realty review. I hope that you now have a clear idea if this business opportunity is for you.
But if you have further questions, feel free to use the comments section below.
And if you find this review useful, kindly share this with the people you know.
So until here and whichever path you take towards your financial goals, I wish you all the success.