Is eXp a Pyramid Scheme? What You've Been Told May Not Be True
By Zachary Rosicka | November 30, 2022
eXp Realty is the best opportunity to ever happen to agents, team leaders and broker-owners, across the globe, since the beginning of the franchise model! This is my opinion, while also being a fact, judging by the number of millionaires that have been made in the shortest amount of time.
Standard franchise brokerages we all know, Coldwell Banker, Sotheby’s, Keller Williams, Compass, etc., are all top down models.
Here’s how they operate. Let’s take Berkshire Hathaway, for example. Berkshire Hathaway is owned by Warren Buffet. He’s at the top, the chief, the big cheese! Berkshire Hathaway then sells regions to a regional owner who pays big money to own a region of the said country. Next, that regional owner sells individual franchises to franchisee owners/buyers who open up local offices we all have and know. This top down model hasn't changed much at all since it was created in 1906 by Colbert Coldwell and his two business partners. Now known as Coldwell Banker. Outdated much?
We, the agents, pay 20, 30, 40 and sometimes 50% of our hard-earned commissions on every deal for 5, 10, 20, to 50 years until we retire. Oh, and there’s a franchise fee we never talk about at 6% or 7%, off the top, before a local broker takes our split, mentioned above. We run, sweat, take time away from our friends, family, kids and sacrifice years and years with determination to be the top agent in our office and then statewide and, you get the point.
At best, we get our trophies at our little Christmas parties and galas that make us feel really important for a few seconds or an hour or two. Then, the trophy goes on the shelf to sit and collect dust. You can never trade that trophy for cash or stock grants at a bank or a draw from a make-believe 401k.
Then, after you’ve run the hardest, paid the broker the most in the office and you get a pat on the back. Congratulations, you traded your time and life for a paycheck, and when you think about it, we may just be the biggest idiots to think we just gave our whole lives to make our broker live fat on their yacht, in their mountain home and many of their other homes across the US, that we helped fund! Trust me, I'm guilty of paying it all in, as well. You're not alone. I was there.
Now, let’s fast forward and you’re 65 years old, ready to retire. AMAZING! Congratulations and thanks for your dedication to our brand and you did a phenomenal job, the broker says. Take care and enjoy, see ya'.
You realize you just traded your whole life for no more income, and you won’t make money off your sales you closed in 2017, 2020, and 2022 ever again. You have 0 ownership in the company and are left with absolutely no leverage! Crap, maybe I should have looked at that eXp company everyone was talking about. Your broker said was a scam, a pyramid scheme. That model will never last. That was their response, when their only hope for their own future, is you staying and paying them. They don't want you leaving for a better opportunity. What would you expect them to say? Yes, go out and become an owner like me and enable yourself the chance to build wealth and have the power of leverage. Not a chance! Only a real friend would encourage you to get some leverage and ownership like they have now.
Is this all making sense? Is this hitting home? When I left my first company, I was super close with the broker and his wife. Hell, they were the reason I got into the business. Since leaving about 5 years ago, I’ve not once gotten a call from them to ask how I was… The only time I’ve spoken with them is when I’ve picked up the phone to call them. Hmm. Funny how this all works. I still love them and think the world of them, regardless.
We must realize we are in a business relationship with our brokers, not a friend relationship. This is YOUR FUTURE! Take charge, be strong in your efforts to preserve the rest of your only life and be open-minded, look at other opportunities. Keyword, opportunity. The most expensive thing an entrepreneur and agent/broker can have is a closed mind. You can either do what most people do, nothing. Or, you can jump-in like I did and in 2.5 short years, I have single-handedly changed the futures of my wife and I, our two beautiful boys and our future grand children, FOREVER! Revenue Share is willable. eXp allows your beneficiary 12 months to become licensed and legally take over your revenue share income. Talk about a legacy!
eXp Realty is now the #1 Independent Brokerage in the US and the world. EXP just hit 87,000 agents in 23 countries and our sales volume just surpassed Realogy, who have over 340,000 agents! So, I’d say eXp agents sell and sell really well. We are a sales brokerage, first and foremost, with wealth-building opportunities. Lots of them. But that’s another story. Let’s dive in!
Now, let’s look at eXp and just shine a light on this so-called pyramid scheme or is it?
We are focused on revenue share, so here it is. Every company is a recruiting company, first and foremost. REMAX and all of them. We, however, aren’t recruited by recruiters in an office paid by an agents' salaries from our broker, to recruit us. While having no experience in this business.
Remember we spoke about the top down models above? Well, here is the founder Glenn Sanford, who wiped out all franchise opportunities! There are no regional owners, local branch owners, managers, or recruiters. GONE! It’s just Glenn and all of us. Glenn did away with all that wasted income and put it back in our pockets. We are now OWNERS, alongside Glenn! Hello World!
eXp has shifted the duty to agents and brokers to benefit from their efforts to attract like-minded, hard-working leaders who want a better future. What better way to attract great agents and brokers than peer-to-peer! Wow!
Here, we all have the same opportunity. Do as little attracting or as much as you’d like. No one is pushing you or asking you to. Though, I implore you to look at the numbers. Come here and sell and benefit from the stock grants/rewards given to us for our sales milestones. You get $200 for your first sale every year and $400 when you cap after earning $80,000 GCI. You will have paid $16,000 in your 80/20 cap(remember, no franchise fee on top). That’s $600 in stock in EXPI, a top 10 stock globally on the NASDAQ in 2020! Now, if you do $500,000 GCI first or 20 deals with no required GCI amount, after capping, you get your full $16,000 back in an EXPI stock grant. Milestone rewarded, I’d say.
Now, say you have a growing business as a new agent, and your peers are reaching out, and you are with eXp. They want to know more about the opportunity. You share the opportunity; boom, they want to join. You have your first sponsee, congratulations! Now, they are making their first sale at $500,000. The following month after closing, you see $500 ‘to be paid’ in your revenue share dashboard. Wow! That’s roughly the payout/referral fee that you would receive eXp pays you from their pocket for bringing a successful agent onboard for that $500,000 sale. Yippie! You get paid every month on the 22nd, as your sponsored agents close deals until they cap.
Now, you bring on nine more good or great agents in the next two years. Now, you can be paid from eXp on all their deals each month and every year they are with the company. Let’s say they all cap. You’ll make an extra $28,000 each year, every single year! eXp pays $2,800 per capping agent each year. What could an extra $28,000 do for you?
Let’s get real here, say in those 10 you sponsor, one of those is someone like me. I brought on 20 agents to eXp in my first 10 months and had 0 experience in agent attraction. I went all in! eXp pays $3,200 for the second tier. Meaning, whoever you bring on, you get paid more for, and you get paid on everyone because you sponsored 10 agents, which opens up through Tier 3. I won’t go into the income on that level yet.
So, you brought on 10, and I brought on 20. Now you’re getting paid on 30 agents, potentially in multiple states and countries!
Say another agent you sponsored brings on 50, Suzy brings on 10, Michael brings on 10, Sally and Rob each bring on 5 each, and the other 4 don’t bring on anyone.
Now, you’re getting paid on 110 agents! You get paid on those 100 on your second Tier $3,200/capping agent or each deal until they cap.
Let’s say they are all cappers. That’s $28,000 plus $320,000 on your second tier each year! That’s an extra $348,000 a year! But, wait! They won’t all be cappers, will they? Probably not. Let’s cut that into about half. Let’s say $180,000 extra each year. Incredible, I’d say. That’s $15,000/month if the broker is down evenly. $180,000.
That’s like having $4,000,000 in an interest-bearing account and pulling out 4% a year for 20 years as a retirement. What’s easier? Earning $4,000,000 after taxes or attracting 10 good agents, who each attract 10? The answer is clear, I’ll take the latter. For a clear explanation, click here now!
Here’s the thing, this opportunity goes 7 tiers down. You can attract or not, no requirements. Keep in mind, the bottom never runs out, we will always be adding agents, as long as there are agents and brokers practicing. It's a known fact that roughly 90% of agents fail, so that leaves 10% in. There are roughly 3,564,537 agents in the US alone. 1,564,537 being licensed Realtors. That leaves 3,208,084 that will leave and be filled with newly licensed agents. They have to hang their license somewhere. This is the way the industry will look, where everyone benefits.
Revenue Share is paid out by eXp from the 20% they take of our commissions. eXp Realty shares 50% of the income, off the top globally and gives it back to us who participate in expanding the company by having our friends join us at our collaborative, future forward brokerage.
Everyone wins here, not just the local broker-owner and Warren Buffet. That’s the real pyramid scheme, if you ask me. Pay one broker for 30 years and leave with absolutely nothing. Or, you can partner with someone here at eXp, where we are all owners and everyone benefits from never before seen income opportunities and collaboration like you'll never see anywhere else! And why wouldn't we help each other? After all, we own the company!
I’m now a Top Global Leader for eXp Realty and am honored to be here and collaborate with the top agents and brokers worldwide. If you have questions, or want to hear and or see the numbers are and could be for you, let’s grab a call or Zoom and take a look. I’m an open book, if it’s not for you, all good. It’s your choice. I’m just here sharing love and the facts. Numbers don’t lie, but some brokers do… Wink.
Blessings to you and yours. Whether you’re here or not, I want you to succeed! Reach out if you’re struggling with lead generation, cold calling, etc. I’m here regardless of whether you are at eXp or not. Let’s build a better world together, one relationship at a time.
Top Global Leader for eXp
The Z Team
Brokered by eXp Realty