Is Real a pyramid scheme or MLM?

by Dec 29, 2020Real News

One brokerage that has risen rapidly in the world of real estate is the Real Brokerage, or Real for short.It is a different business model that is mobile app based and does not make use of brick and mortar office. Any real estate agent across the country can join Real, earn higher commissions and revenue share. The revenue share portion is what makes agents who are interested in joining ask whether Real is a pyramid scheme or MLM.

At its core, Real is an evolution of the capped commission model introduced by companies such as Keller Williams and eXp Realty. Real’s commission splits are some of the highest in the industry. You get to keep a minimum of 85% of your commission, and 100% after reaching the low cap of $12,000. Real earns 15% of the deal, which it invests in operations and a very generous revenue share program.

So, is revenue sharing a pyramid scheme?

If you look up the definition of a pyramid scheme, it reads

a form of investment (illegal in the US and elsewhere) in which each paying participant recruits two further participants, with returns being given to early participants using money contributed by later ones

It would be illegal for any company to run a pyramid scheme, since they don’t generate real revenue but require new participants in order to pay the earlier ones. Revenue sharing models have been used in various forms in the real estate industry for many years now and Real’s model is based on the 15% of the company’s portion of the real estate commission. When you recruit agents, and they start to sell real estate, Real pays out a portion of its 15%  to the sponsoring agent as a referral fee for helping grow the company.

 In short, Real is not a pyramid scheme, MLM or network marketing company. Real is a real estate brokerage that has created generous incentives to help the company grow, funded by the 15% portion of the commission split the company earns when real estate sells. This works because of the investments in back office automation and the elimination of brick and mortar offices.

If you are interested in learning more about Real and how you can keep more of your commission, earn residual income through revenue share, and earn equity, you can reach us at erinn@realbrokerusa.com