I don't like Dave Ramsey's advice.
I don't give a crap.
You're wrong.
In today's video, we're going to be going over why Dave Ramsey kicked out all eXp Realty
agents from his real estate referral program.
So we're going to go over exactly what the referral program is, why he kicked everybody
out, eXp's response to all of this, as well as at the end of this video some conspiracy
theories as to why he did this.
So let's jump into it.
Okay.
So to start with what exactly happened.
Recently, Dave Ramsey basically told all eXp agents and his real estate referral program
that unless they switched brokerages, they were not going to get any leads anymore and
they were not going to be a part of this program.
Now, I don't think it was Dave Ramsey himself exactly saying this, but it was from the coaches
that were emailing back and forth with some different eXp agents telling them basically
they needed to switch brokerages.
And I'm sure that ultimately it came from Dave Ramsey, although he hasn't, as far as
I know, he hasn't publicly come out and said anything.
But I'm sure the direction came from him.
And according to Inman News, the Dave Ramsey coach who basically told all these eXp agents
that they couldn't be a part of this anymore was because eXp has a recruiting model that
takes away from the customer experience, which we're going to talk about in a second here.
So to start with, how does this referral program work?
Well, Dave Ramsey obviously is a massively successful personal finance guru, if you want
to call him that.
And he has a list of recommended resources on his website and different sources.
And one of them is for real estate agents.
So if you're a real estate agent, you can actually apply to become one of his agents.
You have to pay a pretty substantial fee.
I think it's a few thousand dollars.
And then you pay something like $500 per month.
I could be wrong about this, but that's what I've heard.
And then for every deal that you do, you pay him a 30% referral fee.
But because he has such a massive network and such a wide reach, he gets a lot of leads.
So these could be pretty high quality leads.
And you have to pay the amount, but it's going to be worth it for a lot of agents.
Let me first tell you I was a part of the Dave Ramsey program.
I'm not bashing it.
I am just saying that if you're relying on referrals for your business where you're paying
out high fees, one thing you might consider is looking at your cost of goods sold.
And understanding your cost of goods sold is what did you have to spend in order to
acquire that customer?
A Dave Ramsey lead in my business for the longest time was one of the more expensive
transactions because of all of the people who got paid.
And also, to become one of these agents, you do have to meet a certain criteria.
So his whole thing is that he's only recommending the top tier agents.
So you do have to pass some set of criteria.
I think you have to do a certain amount of deals or meet some certain criteria to become
one of these agents so that you can pay him money so that you can get these really high
quality leads pretty much nationwide.
And Dave Ramsey is actually really smart if you weren't aware.
So when I was looking on his website, he actually has this type of affiliate referral program
for many different types of businesses.
So it's not just for real estate agents.
He has it for tax services, property insurance, long-term care, health insurance.
And when I was looking through this, he's probably one of the top affiliate marketers
in the world because he's making a substantial amount just from the real estate referral
program, but also from insurance and all this other stuff.
I mean, I can't even imagine, it's probably easily tens of millions of dollars if I were
to just give some ballpark estimates.
So that's basically how the referral program works.
So you sign up, you pay a pretty substantial fee, but then you get Dave Ramsey's high quality
leads with people that are looking to buy.
Now, can Dave Ramsey even do this?
Can he just completely shut off a brokerage because he doesn't like their business model?
Well, yeah, absolutely.
He can shut off any brokerage.
As far as I know, there's no fair housing laws about saying you can't use this brokerage
or you can't use that brokerage.
Dave Ramsey apparently just does not like eXp and their business model.
And a little background on eXp Realty if you're not aware.
It's the fastest growing brokerage in the history of real estate.
As of right now, I think there's 55,000 or 60,000 agents.
By the time you're watching this video, it might be significantly more than that.
But one of the reasons they were able to grow so fast and also the reason why Dave Ramsey
doesn't like them is because of their revenue share model.
So basically for every agent you bring in, and then if that agent brings in someone and
on and on for seven levels deep, the initial agent will actually get a portion of those
agents' commissions up to a certain percentage.
And it can be a substantial amount.
There's agents in eXp Realty making six figures per month, just from residual income from
different agents that they've recruited.
Most brokerages, if they offer any incentives at all, don't offer anywhere near this type
of incentive for bringing people on.
Now, it's not just the cloud that's so disruptive.
Remember all that money eXp is saving without having the bricks and mortar?
Well, [inaudible 00:04:26] understood that the value of a real estate brokerage is its
agents.
The agents are who have the relationship with the consumer.
The agents are who bring in all the commissions.
So why don't we use that money we're saving to reward the agents for helping us grow the
company?
So how does revenue share work?
Well, first of all, it's revenue share off the top, unlike profit share, which is after
all expenses.
For every agent you attract to eXp, you can earn part of the revenue they pay into the
company as part of their cap.
As you tell more producing agents about the opportunity, you can unlock up to seven levels
of compensation, as you can see here.
That means if for every agent that joins eXp and every other agent tells another agent
and so on and so on, you're going to get paid revenue from those agents who were paying
towards their cap.
They are simply rewarding you for helping them grow the company.
It gets pretty exciting too.
Let's look at this scenario.
Let's say you tell 10 producing agents about eXp and you unlock two levels of compensation.
The agents you bring on do the same thing, and they tell 10 agents.
That means you'd have 110 agents on your second level.
You would make $28,000 a year off your first line and 320,000 on your second line.
That's $29,000 a month in passive income.
Now, one of the downsides of being at eXp Realty is that it does get somewhat of a reputation
of being a recruiting company because there's so many incentives.
And Dave Ramsey does not like the fact that some of these agents might even be making
more just bringing people onto their team versus actually selling real estate.
However, if you've read the news recently, if you follow Inman News and different sources,
you've probably seen that a lot of the most productive teams, a lot of the top agents
and top teams nationwide are joining eXp.
So it's not just a recruiting company.
And not only that, but there's some very aggressive companies out there in terms of recruiting
like Compass right now is involved in multiple lawsuits because of their recruiting practices.
I think I get emails every single week from Keller Williams, Century 21, RE/MAX, all these
different places.
So every brokerage is trying to recruit.
I think eXp just has some more incentives there.
Now the big question is how big of a deal is this for eXp with Dave Ramsey kicking out
every single eXp agent?
Well, it's not really that big of a deal.
In the grand scheme of things, like I mentioned, eXp has about 55,000, 60,000 agents.
And from what I've read from different sources, there were about 100 to 200, maybe as many
as 300 agents that were involved in this program.
And there were actually some agents that were making six figures per year in commission.
I think I read one agent was making as much as 400,000, just from this program alone.
And even Glenn Sanford, the CEO of eXp came out and said, he said, "I didn't even know
how big a deal that Dave Ramsey was."
And he said agents were making significant amount of money.
Now it wasn't a ton of agents, but it's a pretty big loss.
If you're an eXp agent and you were involved in that program, you're going to have to find
another source of leads.
And the thing with lead generation is that every agent has their own way of getting leads.
There's a thousand different ways to get real estate leads.
This from what I've heard was like a more expensive way of getting real estate leads
that are very high quality, and that's why people paid a premium for them.
But there's so many different ways to get leads.
So I'm sure these agents will find a different source of generating leads.
Now, as far as some conspiracy theories as to why Dave Ramsey kicked out all the eXp
agents.
The first one is that he does not like Grant Cardone.
So Grant Cardone recently affiliated with eXp Realty.
He's helping out eXp agents with their sales training programs and probably recruiting
a lot of agents as well.
And if you follow the content of Dave Ramsey and you follow the content of Grant Cardone,
you can see they're on pretty much opposite sides of the spectrum.
Lastly, I'll say this about Dave.
If I was on TV every damn day, man, you know how rich I would be?
Dave's worth about 50 million bucks.
Okay.
That's what my plane costs.
He ain't buying the plane.
And obviously my personal opinion, I think if you're smart, you should take a little
bit from Dave Ramsey and a little bit from Grant Cardone.
You should try to get out of debt, but you should also go into good debt at the same
time in terms of buying cashflow in assets, like multi-family apartment buildings and
things like that.
Another conspiracy theory is that Dave Ramsey does not like Tony Robbins.
Tony Robins recently started affiliating with eXp Realty.
I think he's giving some talks, so probably do some sales training.
And I'm sure the relationship will probably grow over the next few years.
And sometimes these big gurus, they don't like each other.
If you follow some big gurus, they're always talking trash about each other and doing this
and doing that, or maybe they just have opposite opinions.
I don't know if any of that's actually happened.
This is just pure speculation, but that could be one reason why.
The next conspiracy theory is that Dave Ramsey has an affiliation with RE/MAX, which is much
more of a traditional company that doesn't offer anywhere near the incentives of eXp,
and actually eXp and RE/MAX are in some type of lawsuit right now.
I think hundreds of RE/MAX agents just joined eXp and there was a lot of issues with that.
And so that could be one reason why.
And I don't know the full extent of Dave's relationship with RE/MAX.
I'm sure he probably has relationships with many different real estate brokerages who
probably pay him to give talks or give advice or who knows what.
But he recently did speak at a RE/MAX event.
So I'm sure he's getting paid by them and probably other real estate brokerages as well.
So what's next for exp Realty with all this drama going on?
Well, Glenn Sanford said his team of lawyers is reviewing the situation.
I don't think they're actively planning any type of lawsuit.
I don't even know what the lawsuit would be.
It's Dave Ramsey's leads.
He can pretty much do whatever he wants with them.
However, they're more just trying to understand why only eXp agents were cut off.
And Glenn Sanford is also creating a competing type of affiliate referral program within
eXp.
So Glenn Sanford just recently bought Success Magazine.
He has a lot of internet marketing experience.
Obviously he's like a tech billionaire, so he knows a thing or two about generating online
leads.
So he realized the success of the Dave Ramsey program, and he's going to try to create something
similar just for eXp agents.
So it'll be interesting to see how that evolves over the next few years.
And my own personal experience with eXp referral programs, and this was before he even created
this referral program.
This was just from like Facebook groups because eXp is nationwide.
They always have different clients looking.
Someone might live in Hawaii and be looking to buy a house in Virginia.
So they'll say, "Hey, any Virginia agents?"
So within my first month or two, I think I closed two deals just from the affiliate program
that's already there just on the Facebook workplace groups.
So I think it has a lot of potential for sure.
Now what is my opinion on all of this?
Look, I think Dave Ramsey is going to be just fine with a few hundred eXp agents not in
his referral program.
There's going to be other agents that are willing to pay pretty good money, but to get
really high quality leads.
However, I bet if Dave Ramsey was open-minded enough to spend about 15 or 30 minutes and
just mapping out what he currently makes now with his referral program, with what he could
be making if he was with eXp, I bet it would actually be a complete no brainer for him
to join eXp Realty.
And not only that, but if you're a real estate agent at a different brokerage and you are
open-minded enough just to spend about 15 or 20 minutes just mapping out what you're
currently paying, what you're currently making at your brokerage first, what you could be
making with eXp, a lot of agents who have come over from different brokerages have said
it's a complete no brainer.
Once they were open-minded enough to actually listen to what eXp is all about and not just
get caught up in the MLM and recruiting stuff.
So Dave Ramsey, if you're watching this video, reach out to me via Instagram, email, whatever
it is, and we can talk about eXp.
Or if you're an agent at a different brokerage and you want to learn more, just reach out
to me directly.
We can chat more and I can answer your questions.
And another thing to add is that Dave Ramsey just pissed off a tech billionaire, Glenn
Sanford.
That's usually not a good idea.
It's also usually not a good idea to piss off a self-proclaimed redneck like Dave Ramsey.
I think I can say that because he said that in some of his videos.
The thing you didn't understand about me is I am not your typical person that's on the
air.
I'm a hillbilly.
And when you insult a hillbilly's honor and integrity, we get pissed off.
And hillbillies don't do drive-by shootings.
We buy the house next door to you and lay siege.
But who knows, that could actually be a good match of a good one-on-one match up.
And the thing to know about Glenn Sanford is that he had some type of falling out with
Keller Williams and then basically did their entire business model, but made it 10 times
better.
And that's how he created eXp Realty.
So it's kind of interesting because a lot of the agents that joined eXp Realty come
from Keller Williams because they just see it's pretty similar, but just a lot better.
And Glenn Sanford might look to do the same thing with this referral program that he's
creating.
So just something to keep an eye on.
Tell me your thoughts in the comments below and be sure to watch this video right here
and I'll see you on the next one.
Bye.