- eXp Realty was a real-estate juggernaut that swelled to greater than 80,000 brokers primarily based 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 and marketing operation—and three lecturers instructed Fortune they agree. eXp denies this and says its construction is an modern method 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 have been being drugged and assaulted inside the corporate and did little to forestall it. eXp denies the allegations towards its management and claims the alleged assaults by unbiased actual property brokers have been dealt with with seriousness as soon as the accusers introduced it to its consideration.
eXp Realty founder Glenn Sanford constructed the most important unbiased actual property brokerage on the earth, with about 83,000 brokers, by promising to share the corporate’s income together with his employees. 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 may now be slowly eroding it from inside, Fortune has discovered after interviews with a former worker and a brief vendor, and after reviewing two lawsuits filed towards the corporate.
To complicate issues, the 2 ongoing lawsuits declare Sanford knew a few of his brokers have been sexually assaulting their friends however did little about it with the intention to defend the revenues these brokers have 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 minimize of their earnings—as a “multi-level advertising and marketing actual property firm” and a “multi-level advertising and marketing income 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 persons are betting it received’t.
Bradley Safalow, founder and chief government of funding companies agency PAA Analysis, positioned a brief wager towards the inventory in September 2020; he wouldn’t disclose the scale of his place. “There’s one common fact a few multi-level advertising and marketing firm, which eXp is,” Safalow instructed Fortune, “when you don’t deliver individuals in on the backside of the pyramid, the entire thing form 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—instructed Fortune they believed eXp is a multi-level advertising and marketing operation. They pointed to its revenue-sharing compensation construction, which they stated aligns with the definition of multi-level advertising and marketing as a result of it incentivizes brokers to recruit extra brokers and it allows 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 and marketing operation. “eXp Realty shouldn’t be a conventional multi-level advertising and marketing firm; it operates as an actual property brokerage the place brokers earn direct commissions on property gross sales,” the corporate instructed Fortune in a press release. “Since Glenn Sanford launched this modern mannequin, it has confirmed its viability and sustainability out there, resulting in its adoption by new entrants within the business.”
A altering of the guard
Sanford, a 58-year-old who ran a profitable actual property workforce at Keller Williams for 3 years earlier than leaving and founding eXp Realty below a holding firm in 2009, named it after the prefixes for “excellence” and “skilled.” He known as it “the agent-owned cloud brokerage” as a result of it was all-virtual and imagined 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 slightly 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 dialogue and consideration previous to receiving your request for remark,” the corporate instructed Fortune.
Sanford offered some 1.6 million shares from the beginning of 2024 by late February 2025, for a worth of $21 million, in line with an examination of the corporate’s disclosures by Michael Taylor, a analysis affiliate for Washington Service, an information supplier, and a calculation by Fortune. Sanford nonetheless personally controls roughly 26% of the excellent inventory.
A yr in the past, Sanford appointed a brand new chief government for the brokerage, Leo Pareja, and stepped again from the day-to-day enterprise. Sanford stays chairman and CEO of the dad or mum firm, eXp World Holdings. Pareja, notably, has no ties to the accusations of misconduct of years previous. “Sanford’s choice to step down as CEO of eXp Realty was not associated to any misconduct claims,” the corporate stated.
The corporate declined to make Sanford out there for an interview, however in a press release to Fortune stated: “eXp Realty has a robust management workforce, with Glenn Sanford offering imaginative and prescient and innovation as founder and CEO of eXp World Holdings, whereas Leo Pareja drives operational excellence and agent-centric progress as CEO of eXp Realty. Their complementary roles strengthen eXp’s dedication to delivering worth to brokers, brokers, and employees.”
In an e mail to Fortune, Pareja, on behalf of eXp, shared the identical response.
‘Progress over every little thing’
eXp formally describes Sanford as a forward-thinking, modern entrepreneur, centered on the massive 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 line with the corporate web site. eXp below 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, reminiscent of Elon Musk and Mark Cuban, have graced its shiny covers. Sanford himself was on the duvet as soon as. “One of the best ways to foretell the long run is to invent it,” the positioning claims is a phrase he lives by.
There’s one facet of the enterprise that Sanford has all the time centered on: agent rely, in line with 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. That may threaten topline gross sales, if the corporate actually is a multi-level advertising and marketing scheme—because the sexual misconduct lawsuits declare and Safalow claims.
eXp claims its income share plan is a “aggressive differentiator” that has disrupted the residential actual property brokerage mannequin, and permits brokers to earn more money 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 grow to be a competitor stated Sanford was eager on besting his rivals and climbing to the highest. “It was progress over every little thing,” stated Erinn Nobel, a 25-year actual property veteran and founder and president of ENRG.realty. “He needed to be the most important and the most effective.”
The income share plan
On the coronary heart of eXp is the revenue-share program. The brokerage states, “eXp Realty is dedicated to sharing 50 p.c of the corporate greenback with the brokers who assist the corporate develop.”
The plan features as a recruitment and retention instrument: brokers profit from bringing in different brokers and turning into their sponsor. Each time a sponsee agent closes a sale, the one that introduced them into the corporate receives a minimize 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 income share and fairness advantages; that yr, it made $4.6 billion in revenues. In 2023, it was $230 million by 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 “gorgeous achievement”—its progress. Nobody had ever seen agent-count soar as excessive. Nonetheless, he noticed crimson 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 simply assume he’s actually centered on rising this enterprise with agent rely,” stated 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 stated.
In a press release to Fortune, eXp stated its revenue-sharing mannequin helped incentivize progress. As for the discount in headcount, the corporate states it occurred to “off-board much less productive brokers.”
“eXp operates an actual property brokerage mannequin that’s wholesome, profitable, and stays one of many top-performing corporations in our business. eXp actual property brokers are unbiased professionals who use the eXp model and companies. Our entrepreneurial brokers search to draw different severe and productive professionals, committing to offer help and help to these professionals all through the course of their profession with eXp Realty. Just like different income/revenue sharing corporations, eXp provides a beneficiant income sharing program, which incentivizes firm progress and likewise helps brokers construct for his or her retirement,” the corporate stated.
A ‘sundown cruise’—and an alleged assault
In two separate lawsuits, filed within the U.S. District Courtroom in California, in February 2023 and December 2023, 5 girls allege they have been drugged and sexually assaulted. Two male former actual property brokers who have been sponsors to a few of the girls are named within the lawsuits, however the accusations embrace 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 “sundown 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 instructed her it was Adderall, the swimsuit claims. She blacked out and has no reminiscence of the remainder of the night. The subsequent 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 line with the grievance that cites a police report, alleged she found different girls have been drugged and sexually assaulted after attending recruiting occasions.
A 3rd girl claims that, at an business occasion on the Pelican Hill Lodge in California in 2018, she had a single cocktail with Michael Bjorkman, an agent, on the lodge bar. She remembers nothing till the following morning when she awoke bare in Bjorkman’s lodge room, her lawsuit claims, the place he and one other girl have been within the different mattress bare. One other man was on the ground; he was clothed.
Bjorkman was arrested on prices of two counts of sexual assault in Miami-Dade County in 2021. Bjorkman denied the costs and the case was later dismissed. Golden was Bjorkman’s sponsor agent, in line with 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 “unhealthy actors.” Talking by 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 beforehand efficiently defended himself, and we’re litigating in court docket towards these pending allegations. Mr. Bjorkman continues to battle for full vindication,” attorneys David Chesnoff and Richard Schonfeld stated in a press release to Fortune.
Golden’s legal professional, Peter Levine, stated in a press release: “Mr. Golden respects the authorized course of and appears ahead to clearing his identify in court docket. He unequivocally condemns sexual assault and exploitation and stays assured that when all of the proof emerges, he’ll prevail at trial.”
Sanford Passman, an legal professional for Keenan, instructed Fortune, “the plaintiff doesn’t have a case towards my shopper.” Passman filed a movement to dismiss, however the decide has not dominated on it.
The corporate stated: “We take our accountability to foster a secure and inclusive surroundings very severely. eXp Realty has zero tolerance for abuse, harassment, or misconduct of any form—together with by the unbiased actual property brokers who use our companies. The claims on this case stem from alleged assaults by unbiased actual property brokers who have been by no means eXp workers—which we dealt with with pace, seriousness, and deep respect as quickly because the accusers introduced it to our consideration, in step with our values and with the legislation. eXp hopes and trusts the court docket will give a full and truthful listening to to the plaintiffs as they pursue claims towards the people who allegedly assaulted them. Nonetheless, the claims towards eXp and its management haven’t any foundation the truth is or legislation, 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 a superb man who had a behavior of avoiding exhausting conversations, she stated.
“He would keep away from it in any respect prices,” stated Nobel. He’d cross them alongside to another person. “It simply was not a part of Glenn’s repertoire to have the ability to have these conversations,” Nobel stated.
Early into her tenure at eXp, Nobel stated she was sexually harassed by a colleague. She didn’t share specifics, however stated she reported the harassment to her superiors. “Glenn by no means needed to speak about it,” she stated. The particular person she accused was by no means fired, so she needed to proceed to work with the particular person. “Glenn stated he would deal with it, and nothing ever occurred,” she stated.
“He completely knew what was happening and simply turned a blind eye to it,” she stated.
The corporate stated it couldn’t touch upon issues to do with litigation, however offered a press release: “eXp takes its accountability to foster a secure and inclusive surroundings very severely. eXp has zero tolerance for abuse, harassment, or misconduct of any form—together with by the unbiased actual property brokers who use our companies.”
It continued: “When any declare is made, we examine the matter and resolve on acceptable motion as a part of due course of. After we be taught of any habits on the contrary, we take motion to deal with it. We firmly reject the claims made in these lawsuits and stand by the integrity of our experiences, investigations, and the decisive actions we’ve taken to uphold knowledgeable, moral, and inclusive work surroundings.”
One of many sexual misconduct lawsuits names Sanford as a defendant as a result of it alleges he “stood to profit 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 reveals textual content messages between Bjorkman and Sanford, after the alleged sexual assaults. On Oct. 13, 2020, Bjorkman texted Sanford and stated: “I’m so coronary heart damaged man…I’m so grateful for no matter you are able to do. I actually do depend on rev share…If you need to listen to the tales and so on I’m prepared to share. It’s such bs.”
Sanford replied: “I’ve your again on the Rev Share. I haven’t been concerned within the conversations and I can solely think about what you’re going by. I’ve handled just a few issues in my day so I do know that this an enormous emotional roller-”. The remainder of the message is minimize off.
The 2 lawsuits name Sanford “agent #1” and declare he’s on the prime of the income share pyramid. However Sanford is now not licensed to promote actual property, in line with Washington state data, and now 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 line with a proxy assertion. Per the board’s calculation, Sanford is eligible for the utmost income share credit score at every stage. In 2023, Sanford’s money bonus was round $81,000, in line with a latest 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 coverage’
About 4 months after sexual misconduct allegations have been described in December 2023 by the New York Instances, the corporate introduced that Sanford was stepping down as chief government 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 inside evaluate following the sexual misconduct allegations. “That’s a really particular query that I must get again to you,” he stated. “I simply took over as CEO.”
When requested what steps he’s taken to restore the corporate’s tradition and popularity, and guarantee his feminine brokers are secure, he stated, “we’ve a zero-tolerance coverage.”
The corporate later offered a press release that stated: “Whereas we can not touch upon ongoing litigation, we completely examine all allegations of violation of the code of ethics together with the matter in query. As well as, we need to make clear that the board additionally carried out its personal unbiased evaluate. The claims towards eXp and its management haven’t any foundation the truth is or legislation, and eXp vehemently denies them.”
This story was initially featured on Fortune.com
