Some people think eXp Realty is a pyramid scheme, or a scam. Most pyramid schemes look very similar to Multi-Level Marketing companies. These schemes are where new recruits are promised huge salaries and prizes for recruiting new members and selling products.
However, these new employees will be required to buy into the company. They may end up losing all their money so that they and their fellow employees can actually get salaries when no one is selling the product enough to make a profit (because everyone is only focused on recruiting, not selling the product).
eXp Realty is NOT a pyramid scheme. Employees at eXp don’t make their money by bringing in new recruits, they make their money by selling real estate. However, there’s a reason eXp is labeled a pyramid scheme by competitors, so let’s take a closer look.
eXp Realty Is Successful
Pyramid schemes always fail after a while because those who started the company have no profit to work with and run out of money to pay employees. That’s just not the way it works with eXp.
In fewer than 13 years, eXp Realty became a Top 5 brokerage in the country in volume and transactions. That move is faster than one that any other brokerage has ever made!
Competitors say eXp is a pyramid scheme because every agent (not just franchise owners or regional franchise owners) are allowed to “sponsor” fellow agents into the eXp brokerage and earn some commission from those sponsored agents. So, large franchises (who shall remain nameless) are at a huge disadvantage. They can no longer get away with selling $50,000+ franchises to brokers because eXp has made a different way. The gate keeping to long term real estate wealth is over.
So, eXp Realty is not a pyramid scheme. It simply allows agents who are already working hard in real estate to join forces with other agents and earn more when they expand. It’s really as simple as that.
Yes, agents make money by recruiting new agents (up to 7 levels). But that’s not where the money comes from and is made. The money is made by selling real estate. eXp Realty just happened to democratize real estate selling to where EVERY agent benefits rather than just a select few.
Conclusion
eXp Realty does encourage recruitment. But if agents aren’t selling real estate, eXp doesn’t make money and neither do agents. If you’d like to learn more about how eXp works for agents who want to build a team and make more money while doing that (within brokerage bounds), reach out to me and I’ll share more about my group and how eXp Realty has changed our lives.