A lot of people accuse eXp Realty of being a Multi-Level Marketing company, also known as an MLM. An MLM is defined by the Federal Trade Commission (FTC) as a business that involves selling products to family and friends “in person” and recruiting others to do the same.
With MLMs, employees earn commissions on what the employees they recruit end up spending and earning in the company. A majority of the money that they earn comes from what they make from recruiting others to join the team.
So by definition, it’s safe to say that eXp Realty is NOT an MLM. However, let’s dive deeper into why people might think so.
eXp and Revenue Share
People generally think that eXp Realty is an MLM because it includes a component of “revenue share.” To be fair, it does work in a similar fashion. One agent sponsors another agent to join the brokerage and earns a percentage of the new agent’s earnings.
However, eXp isn’t an MLM because the job is not recruitment for a commission, the job is selling real estate. There’s where the money comes from…the selling of real estate. Sponsoring other agents is merely a bonus. Plus, sponsors are supposed to help new agents they bring on by providing support and resources for real estate.
So let’s go deeper. How is this different from the rest of the big box brokerages like Keller Williams, Century 21, RE/MAX, etc.? Those real estate companies allow franchise owners to earn some compensation for the exact same thing. Those franchise owners have to recruit agents, teach them to sell real estate, and then profit from the actual sale of real estate.
eXp does this a little differently. It allows agents to recruit other agents but does NOT force them to fork out tens of thousands of dollars to purchase a franchise. Agents get to build eXp up without having to spend a ton of money out of pocket to do so.
So, while the idea of inviting others to join a company and earning a commission from that new employee’s sales is the same, the basis of an MLM lies in recruitment while the basis of eXp lies in building a strong foundation of agents working together to support one another.
eXp is not an MLM, it’s a worldwide brokerage that encourages its agents to reach out and build individual teams with agents they know rather than simply performing their real estate work alone. If you’re interested to learn more, reach out to me. I can share some of the ways that my team works together at eXp to create an incredibly successful real estate team that wins often and wins big!