- eXp Realty was a real-estate juggernaut that swelled to greater than 80,000 brokers based mostly on a revenue-share plan that paid every staffer for bringing in new brokers. However a short-seller tells Fortune he believes the corporate is a multi-level advertising operation—and three lecturers advised Fortune they agree. eXp denies this and says its construction is an revolutionary strategy to reward profitable brokers. Founder Glenn Sanford has stepped again from the highlight after a pair of sexual misconduct lawsuits, reviewed by Fortune, alleged he knew girls had been being drugged and assaulted inside the corporate and did little to stop it. eXp denies the allegations in opposition to its management and claims the alleged assaults by impartial actual property brokers had been dealt with with seriousness as soon as the accusers introduced it to its consideration.
eXp Realty founder Glenn Sanford constructed the biggest impartial actual property brokerage on the earth, with about 83,000 brokers, by promising to share the corporate’s income together with his workers. However a decline in brokers on his look ahead to the primary time ever suggests the revenue-sharing mannequin that put eXp Realty on the map would possibly now be slowly eroding it from inside, Fortune has realized after interviews with a former worker and a brief vendor, and after reviewing two lawsuits filed in opposition to the corporate.
To complicate issues, the 2 ongoing lawsuits declare Sanford knew a few of his brokers had been sexually assaulting their friends however did little about it to be able to defend the revenues these brokers had been incomes. These fits, which allege sexual battery, declare eXp is basically two parallel companies. One is a conventional actual property brokerage that earns commissions from promoting property. The opposite is a pyramid-style scheme, whose fortunes are depending on brokers recruiting different brokers, each fits declare. The corporate and the accused males deny the claims.
The 2 lawsuits describe eXp’s compensation construction—the place brokers receives a commission for bringing in additional brokers, and get a reduce of their earnings—as a “multi-level marketing real estate company” and a “multi-level marketing revenue share plan pyramid.”
The variety of brokers and brokers at eXp declined by 5% in 2024, following a 1.8% quarter-over-quarter lower reported within the fourth quarter of 2023. eXp’s income is intently tied to the variety of brokers it has as a result of its gross sales are generated by commissions on actual property transactions carried out by its brokers. The corporate’s progress tends to correlate to the expansion of its agent and dealer base.
That raises an apparent query: Can eXp maintain itself if its agent headcount is in decline?
Some individuals are betting it received’t.
Bradley Safalow, founder and chief govt of funding companies agency PAA Analysis, positioned a brief wager in opposition to the inventory in September 2020; he wouldn’t disclose the dimensions of his place. “There is one universal truth about a multi-level marketing company, which eXp is,” Safalow advised Fortune, “if you don’t bring people in at the bottom of the pyramid, the whole thing kind of unravels.”
Three lecturers—Harvard Enterprise College professor Lauren Cohen, Johns Hopkins Carey Enterprise College professor Shubhranshu Singh, and Hamline College economics professor Stacie Bosley—advised Fortune they believed eXp is a multi-level advertising operation. They pointed to its revenue-sharing compensation construction, which they mentioned aligns with the definition of multi-level advertising as a result of it incentivizes brokers to recruit extra brokers and it permits top-tier brokers to earn income share on transactions made by these under them, one professor defined.
The corporate denies it’s a multi-level advertising operation. “eXp Realty is not a traditional multi-level marketing company; it operates as a real estate brokerage where agents earn direct commissions on property sales,” the corporate advised Fortune in an announcement. “Since Glenn Sanford introduced this innovative model, it has proven its viability and sustainability in the market, leading to its adoption by new entrants in the industry.”
A altering of the guard
Sanford, a 58-year-old who ran a profitable actual property crew at Keller Williams for 3 years earlier than leaving and founding eXp Realty underneath a holding firm in 2009, named it after the prefixes for “excellence” and “experienced.” He known as it “the agent-owned cloud brokerage” as a result of it was all-virtual and purported to be higher for brokers.
The brokerage gained traction. It had 25 brokers in 2009, however 10 years later, it had 23,000. On the finish of 2022, the quantity was a staggering 86,203.
Shares of eXp have been on a wild journey. After buying and selling at $77 in 2021, they’re presently just below $9.50, giving eXp a market capitalization of $1.44 billion.
Sanford and his ex-wife beforehand managed round 45% of the corporate between them. From 2017 to 2025, Sanford and his ex-wife agreed to vote as one, however after Fortune requested eXp for remark about their mixed 45% stake, the 2 severed their settlement. The top of the settlement “had been an ongoing discussion and consideration prior to receiving your request for comment,” the corporate advised Fortune.
Sanford bought some 1.6 million shares from the beginning of 2024 by means of late February 2025, for a price of $21 million, in response to an examination of the corporate’s disclosures by Michael Taylor, a analysis affiliate for Washington Service, a knowledge supplier, and a calculation by Fortune. Sanford nonetheless personally controls roughly 26% of the excellent inventory.
A 12 months in the past, Sanford appointed a brand new chief govt for the brokerage, Leo Pareja, and stepped again from the day-to-day enterprise. Sanford stays chairman and CEO of the mum or dad firm, eXp World Holdings. Pareja, notably, has no ties to the accusations of misconduct of years previous. “Sanford’s decision to step down as CEO of eXp Realty was not related to any misconduct claims,” the corporate mentioned.
The corporate declined to make Sanford obtainable for an interview, however in an announcement to Fortune mentioned: “eXp Realty has a strong leadership team, with Glenn Sanford providing vision and innovation as founder and CEO of eXp World Holdings, while Leo Pareja drives operational excellence and agent-centric growth as CEO of eXp Realty. Their complementary roles strengthen eXp’s commitment to delivering value to agents, brokers, and staff.”
In an e mail to Fortune, Pareja, on behalf of eXp, shared the identical response.
‘Growth over everything’
eXp formally describes Sanford as a forward-thinking, revolutionary entrepreneur, centered on the large image. He as soon as tried to launch an Uber Eats-like meals supply service years earlier than the market was prepared for it, in response to the corporate web site. eXp underneath Sanford bought Success Enterprises, and its journal, as a result of actual property and private improvement go hand in hand, the acquisition announcement steered. Billionaires and celebrities, equivalent to Elon Musk and Mark Cuban, have graced its shiny covers. Sanford himself was on the duvet as soon as. “The best way to predict the future is to invent it,” the location claims is a phrase he lives by.
There may be one side of the enterprise that Sanford has at all times centered on: agent rely, in response to Safalow, the quick bettor. As agent headcount grew into the tens of hundreds through the years, eXp’s income ballooned together with it. Now, agent rely is in decline. Which may threaten topline gross sales, if the corporate actually is a multi-level advertising scheme—because the sexual misconduct lawsuits declare and Safalow claims.
eXp claims its income share plan is a “competitive differentiator” that has disrupted the residential actual property brokerage mannequin, and permits brokers to make more cash by bringing different brokers into the fold at eXp. That self-perpetuating recruitment mechanism helped gas eXp’s fast rise. However the firm claims improved productiveness per agent offsets the decline in agent rely.
A high-level worker who labored at eXp for six years earlier than leaving to turn into a competitor mentioned Sanford was eager on besting his rivals and climbing to the highest. “It was growth over everything,” mentioned Erinn Nobel, a 25-year actual property veteran and founder and president of ENRG.realty. “He wanted to be the biggest and the best.”
The income share plan
On the coronary heart of eXp is the revenue-share program. The brokerage states, “eXp Realty is committed to sharing 50 percent of the company dollar with the agents who help the company grow.”
The plan features as a recruitment and retention software: brokers profit from bringing in different brokers and turning into their sponsor. Each time a sponsee agent closes a sale, the one who introduced them into the corporate receives a reduce of their fee. There are seven tiers that dictate what proportion is shared to whom. Brokers sponsoring different brokers can earn 17.5% of a income share pool from gross sales in tier-one transactions, for instance. Extra tiers and earnings are unlocked the extra brokers you sponsor, and the extra brokers your sponsee sponsors.
In 2024, eXp claimed it paid its brokers $220 million by means of income share and fairness advantages; that 12 months, it made $4.6 billion in revenues. In 2023, it was $230 million by means of income share and fairness advantages, and the corporate reported $4.3 billion in revenues.
When Safalow first delved into eXp greater than 4 years in the past, he acknowledged a “stunning achievement”—its progress. Nobody had ever seen agent-count soar as excessive. Nonetheless, he noticed purple flags. Nothing about its expertise, promoting methods, or fee construction was proprietary to the corporate—so Safalow shorted the inventory, betting its worth would go down.
“I just think he’s really focused on growing this business with agent count,” mentioned Safalow, referring to Sanford. Agent rely gave the impression to be extra vital to the corporate than the cyclical nature of actual property, or the best way rates of interest, or provide and demand have an effect on the market, Safalow mentioned.
In an announcement to Fortune, eXp mentioned its revenue-sharing mannequin helped incentivize progress. As for the discount in headcount, the corporate states it occurred to “off-board less productive agents.”
“eXp operates a real estate brokerage model that is healthy, successful, and remains one of the top-performing companies in our industry. eXp real estate agents are independent professionals who use the eXp brand and services. Our entrepreneurial agents seek to attract other serious and productive professionals, committing to provide support and assistance to those professionals throughout the course of their career with eXp Realty. Similar to other revenue/profit sharing companies, eXp offers a generous revenue sharing program, which incentivizes company growth and also helps agents build for their retirement,” the corporate mentioned.
A ‘sunset cruise’—and an alleged assault
In two separate lawsuits, filed within the U.S. District Court docket in California, in February 2023 and December 2023, 5 girls allege they had been drugged and sexually assaulted. Two male former actual property brokers who had been sponsors to a number of the girls are named within the lawsuits, however the accusations embody others. The ladies declare the corporate ignored the incidents.
One girl claimed that in a convention in Puerto Vallarta in 2020, which included a booze-soaked “sunset cruise” from Banderas Bay to Las Caletas, she met a pair: David Golden, an agent, and his girlfriend Emily Keenan. Keenan gave her a tablet and advised her it was Adderall, the swimsuit claims. She blacked out and has no reminiscence of the remainder of the night. The following day, her lawsuit claims, she met Keenan and Golden and once more grew to become intoxicated after the 2 supplied her a drink. She claims she was sexually assaulted by each of them whereas incapacitated.
One other girl, in response to the grievance that cites a police report, alleged she found different girls had been drugged and sexually assaulted after attending recruiting occasions.
A 3rd girl claims that, at an business occasion on the Pelican Hill Resort in California in 2018, she had a single cocktail with Michael Bjorkman, an agent, on the resort bar. She remembers nothing till the following morning when she awoke bare in Bjorkman’s resort room, her lawsuit claims, the place he and one other girl had been within the different mattress bare. One other man was on the ground; he was clothed.
Bjorkman was arrested on expenses of two counts of sexual assault in Miami-Dade County in 2021. Bjorkman denied the fees and the case was later dismissed. Golden was Bjorkman’s sponsor agent, in response to the 2 complaints. Each Golden and Bjorkman are named as defendants in each fits.
Throughout an earnings name in November 2023, earlier than the New York Instances revealed an investigation uncovering the lawsuits, Sanford referred to the 2 males as “bad actors.” Talking by means of an avatar of himself on a video, Sanford introduced the accused males had been fired and defended the corporate’s dealing with of the state of affairs.
“Mr. Bjorkman previously successfully defended himself, and we are litigating in court against these pending allegations. Mr. Bjorkman continues to fight for full vindication,” attorneys David Chesnoff and Richard Schonfeld mentioned in an announcement to Fortune.
Golden’s lawyer, Peter Levine, mentioned in an announcement: “Mr. Golden respects the legal process and looks forward to clearing his name in court. He unequivocally condemns sexual assault and exploitation and remains confident that when all the evidence emerges, he will prevail at trial.”
Sanford Passman, an lawyer for Keenan, advised Fortune, “the plaintiff does not have a case against my client.” Passman filed a movement to dismiss, however the choose has not dominated on it.
The corporate mentioned: “We take our responsibility to foster a safe and inclusive environment very seriously. eXp Realty has zero tolerance for abuse, harassment, or misconduct of any kind—including by the independent real estate agents who use our services. The claims in this case stem from alleged assaults by independent real estate agents who were never eXp employees—which we handled with speed, seriousness, and deep respect as soon as the accusers brought it to our attention, in line with our values and with the law. eXp hopes and trusts the court will give a full and fair hearing to the plaintiffs as they pursue claims against the individuals who allegedly assaulted them. However, the claims against eXp and its leadership have no basis in fact or law, and to which eXp vehemently denies.”
‘Turned a blind eye’
Earlier than she left and have become a competitor, Nobel labored at eXp Realty from February 2014 to March 2020. She started as an agent and have become a managing dealer and regional progress chief reporting on to Sanford, with whom she additionally cofounded an eXp nonprofit. She known as Sanford a visionary and an excellent man who had a behavior of avoiding onerous conversations, she mentioned.
“He would avoid it at all costs,” mentioned Nobel. He’d cross them alongside to another person. “It just was not part of Glenn’s repertoire to be able to have those conversations,” Nobel mentioned.
Early into her tenure at eXp, Nobel mentioned she was sexually harassed by a colleague. She didn’t share specifics, however mentioned she reported the harassment to her superiors. “Glenn never wanted to talk about it,” she mentioned. The individual she accused was by no means fired, so she needed to proceed to work with the individual. “Glenn said he would handle it, and nothing ever happened,” she mentioned.
“He absolutely knew what was going on and just turned a blind eye to it,” she mentioned.
The corporate mentioned it couldn’t touch upon issues to do with litigation, however offered an announcement: “eXp takes its responsibility to foster a safe and inclusive environment very seriously. eXp has zero tolerance for abuse, harassment, or misconduct of any kind—including by the independent real estate agents who use our services.”
It continued: “When any claim is made, we investigate the matter and decide on appropriate action as part of due process. When we learn of any behavior to the contrary, we take action to address it. We firmly reject the claims made in these lawsuits and stand by the integrity of our reports, investigations, and the decisive actions we have taken to uphold a professional, ethical, and inclusive work environment.”
One of many sexual misconduct lawsuits names Sanford as a defendant as a result of it alleges he “stood to benefit financially” by having Golden function a “sponsor” to one of many girls accusing Golden of sexual assault.
Within the different, an exhibit to the swimsuit exhibits textual content messages between Bjorkman and Sanford, after the alleged sexual assaults. On Oct. 13, 2020, Bjorkman texted Sanford and mentioned: “I’m so heart broken man…I’m so grateful for whatever you can do. I really do rely on rev share…If you would like to hear the stories etc I’m willing to share. It’s such bs.”
Sanford replied: “I have your back on the Rev Share. I haven’t been involved in the conversations and I can only imagine what you are going through. I’ve dealt with a few things in my day so I know that this a huge emotional roller-”. The remainder of the message is reduce off.
The 2 lawsuits name Sanford “agent #1” and declare he’s on the prime of the income share pyramid. However Sanford is not licensed to promote actual property, in response to Washington state data, and not receives income share. As a substitute, the board awarded him a quarterly money bonus equal to what his income share would have been, in response to a proxy assertion. Per the board’s calculation, Sanford is eligible for the utmost income share credit score at every degree. In 2023, Sanford’s money bonus was round $81,000, in response to a current proxy assertion. Even when Sanford leaves the corporate he’ll proceed to obtain that money yearly, as long as the corporate grows 30% yearly.
‘Zero-tolerance policy’
About 4 months after sexual misconduct allegations had been described in December 2023 by the New York Instances, the corporate introduced that Sanford was stepping down as chief govt of the brokerage. He was changed by Pareja, whom he introduced in two years prior.
Pareja was unable to inform Fortune in an interview in late Aug. 2024 whether or not the eXp board carried out an inner evaluation following the sexual misconduct allegations. “That’s a very specific question that I would have to get back to you,” he mentioned. “I just took over as CEO.”
When requested what steps he’s taken to restore the corporate’s tradition and repute, and guarantee his feminine brokers are protected, he mentioned, “we have a zero-tolerance policy.”
The corporate later offered an announcement that mentioned: “While we cannot comment on ongoing litigation, we absolutely investigate all allegations of violation of the code of ethics including the matter in question. In addition, we want to clarify that the board also conducted its own independent review. The claims against eXp and its leadership have no basis in fact or law, and eXp vehemently denies them.”
This story was initially featured on Fortune.com
