It made a boom when personal finance expert Dave Ramsey began booting eXp Realty agents out of his premium referral network.
So what were the grounds behind this controversial David Ramsey eXp Realty scrap?
We’ll get to the bottom of it in this post.
Agents reported to Inman that they felt betrayed, and Ramsey’s company, Ramsey Solutions, remained silent about the incident.
This silence sparked a considerable industry debate about what really was going on.
However, this dispute has shone a light on the world of lead generation.
It turns out that it’s far more extensive and more intricate than it appears.
It also prompted a discussion about what obligations members of that sector have to both agents and consumers.
Dave Ramsey Going Head-to-head With eXp Realty
Ramsey is opposed to eXp agents because he believes they are deceitful and are con artists.
They manipulate clients to make quick money rather than get them the best offers available (think “purchasing leads”).
Dave Ramsey ELP is one of the companies that Dave endorses.
It also accepts expensive eXp agent referrals.
Ramsey outlines why buying leads could be harmful to your business in one of his podcast episodes.
Even though his method looks to be sound at first glance, it may not work for everyone.
Some brokerages demand a commitment from sellers who need to sell their properties quickly before losing too much equity.
They might have to rent out their property while waiting for better times.
Ramsey also decided to become a business coach since he believed his firm wasn’t developing as quickly as it should.
It seemed like people were no longer paying attention (a typical issue for entrepreneurs).
In the end, he decided to support local agents and not eXp agents.
Ramsey decided to transfer brokerages and, in the end, adopted a hostile attitude against eXp Realty.
They can get better rates elsewhere, just like other firms that have shifted over after being charged hefty fees.
Related Reading: How to Make Money in Real Estate – Find Out Here.
What is eXp Realty?
eXp Realty has been in business for over a decade and provides full-service brokerages, house construction, and financing services.
They also have local agents with whom Ramsey has no affiliation or trust.
He expressed in a podcast show that depending on where the lead comes from, eXp’s referral fee might be up to $5,000.
Of course, this is especially true in higher-priced areas like Los Angeles.
Due to the high eXp referral expenses, sellers may lose equity if their property does not sell within 30 days.
While you might be able to save money on commissions, the expense of referrals may end up costing you more.
Who Is Dave Ramsey?
Dave Ramsey is a famed personal finance expert recognized for his anti-debt and anti-credit views.
He’s also famous for his Baby Steps program, which teaches followers how to reach “financial freedom.”
It encourages folks to pay off existing obligations and increase their savings.
Ramsey is the author of several books and a popular radio show host.
Ramsey Solutions, his company, offers a variety of additional products and services.
They offer budgeting software, a financial education program for schools and churches, and a variety of events.
Ramsey’s evangelical Christian religious beliefs are prominent in his shows, books, and company’s “righteous living” practices.
He has made the news for several contentious actions like:
- Taking a loaded pistol out of a bag at a staff meeting
- Hosting a 1000 attendance maskless Christmas bash during this pandemic
- Firing some employees for engaging in premarital sex
- Keeping his physical offices open during this pandemic
Ramsey frequently incorporates his personal beliefs into his financial advice and business practices.
Take it or leave it, but I believe it’s vital to be aware of this before supporting his company.
Related Reading: How To Get Most Out Of The Dave Ramsey Budget – Click Here To Learn.
What Is The Dave Ramsey ELP Program?
Ramsey Solutions operates the Dave Ramsey Endorsed Local Provider (ELP) program.
It connects Ramsey’s audience with local service providers, such as tax consultants, insurance agents, and realtors.
Of course, these connections are familiar with “The Ramsey Way.”
Ramsey previously included investment advisors in Ramsey’s ELP program.
Because endorsing financial experts is unlawful, Ramsey Solutions renamed that part of the program “SmartVestor.”
In actuality, Ramsey does not personally vet and endorse the ELP program’s suppliers.
Instead, they’ve applied to be a part of Ramsey Solutions’ referral network, which was created to capitalize on Ramsey’s popularity.
The Dave Ramsey ELP and eXp Realty Connection
Dave Ramsey, a business consultant, and eXp realty have a long history of collaboration, with both parties profiting from it.
eXp Realty bought Ramsey Solutions in 2010 without outside participation or disclosing the terms to investors.
The acquisition aided the company’s revenue and client base growth.
Dave still owns Ramsey Solutions, but he has no operational authority over either company.
However, employee cross-pollination did not prevent both organizations from benefiting from each other’s services.
The Truth Behind The Dave Ramsey vs. eXp Realty Feud
The feud began in 2010 when eXp Realty purchased Ramsey Solutions, which Dave launched in 1992.
There were no outside parties involved in the acquisition, and the terms of the deal were not disclosed.
In an interview, David D’Alessandro and Tim Rosenzweig of Rich Dad Radio talked about how this acquisition will influence their businesses.
It became clear-cut that there was still some hostility on both sides.
A well-known financial advisor, Dave Ramsey, took a hard line against eXp Realty.
D’Alessandro stated that Ramsey flat-out said that he doesn’t like him or their brokerage.
Dave gathers it would be more beneficial to take some commercial or personal stance against one another.
That’s so they could stand apart as competitors.
It’s clear that Dave believes this because of how close they are now with this latest acquisition.
If you listen to Ramsey’s podcasts, you’ll hear him talking about things that aren’t in eXp Realty’s favor.
But the real question is why he opposes them in the first place.
One of the reasons he opposes eXp Realty is that he believes the company’s president, David D’Alessandro, dislikes him.
Also, after accepting expensive referrals from eXp Realty, Dave Ramsey ELP grew lukewarm towards them.
Related Reading: How exp Realty Works – Click Here To Find Out.
The Issue With Ramsey Solutions Accepting Expensive Referrals
Ramsey revealed his stance on accepting pricey leads in an interview with Rich Dad Radio.
He explained that he made the decision to only connect customers to real estate brokers who worked only for him.
He believes it is crucial since they are attempting to distinguish themselves from the competition.
This is in stark contrast to the advice he gives listeners on today’s podcast.
He claims to provide names of local folks if you want somebody else to deal with them.
This suggests Ramsey Solutions accepts expensive real estate agent referrals.
He states, “We’re going to provide you some names of local folks if you want somebody else to deal with.”
Dave Ramsy’s Endorsed Local Partner, according to eXp, is an expensive service to their clientele.
You may listen to the podcast to learn more about what occurs when someone transfers brokerage firms.
Even so, there are no specifics on whether they collect referral money from agents who support them.
Dave Ramsey has taken such a stance by refusing to hire eXp agents for his brokerage firm.
Ramsey claims that his agents may only work with them if his firm entirely employs them.
He gave them a deadline to leave unless they switched brokerages.
Is There Sense behind Dave Ramsey’s Stance Against eXp Realty?
eXp agents should not be a member of the Dave Ramsey team, according to Dave Ramsey.
Ramsey refuses to recommend eXp agents as an agency with whom to work or sell leads.
One reason could be that they refuse to comply with his financial product criteria.
Yes, most real estate businesses have allowed eXp Realty agents into their brokerage.
However, Ramsey doesn’t want people who don’t follow these standards working for him.
Another factor is that people are beginning to switch to Exp Realty from other brokerages.
On the other hand, Ramsey has been providing real estate services for a long time. In addition, he takes part in coaching programs.
Sure, he claims that his agent would no longer work for his brokerage unless they move away from eXp.
However, it’s evident that he is still connected to them.
In a way, his antagonism makes sense, but I’m not sure it’s rooted in pure logic.
Related Reading: How To Join Exp Realty – Click Here To Learn More.
Dave Ramsey refuses to hire eXp Realty agents because he disagrees with their business practices.
By refusing to promote their brokerage or sell leads, he takes a strong stance against them.
Dave has nothing to do with these guys because they refuse to comply with his financial product criteria.
If you’re a Ramsey fanatic, it’s not hard to understand his reasoning.
If you look at the other side, eXp Realty agents succeed despite his attacks.
According to their agents, working with eXp Realty is a positive experience.
They have a great deal of expertise and are on par with many other real estate firms.