I remember the first time I was asked by a real estate broker, here in Georgia, why I came to Keller Williams to "hang out my shingle" (i.e. my real estate license), I said, “Your real estate signs are everywhere." That turned out to be even truer than I imagined (and in more ways than one).
Real Estate Brokers by the Numbers
Keller Williams is the largest real estate company, by associate count, in the country. They recently claimed 129,000 real estate agents! What advantage would that be to you? If you see their signs all over the place, who are you going to think of first when you want to buy or sell a house? I thought it made good business sense to be in the most popular real estate office. It turns out that there are lots of reasons why they are the largest and the fastest growing real estate company. Entrepreneur Magazine rated them number one in their top 500 Franchise list. Inc. Magazine rated them one of the fastest growing private companies. They were rated number 2 on the best training organizations across all industries. And Forbes named Keller Williams (#17) as the only real estate company on their list of the Happiest Companies to Work for in 2016. Plus, the first real estate book I picked up was a national bestseller The Millionaire Real Estate Agent by one of the founders of Keller Williams, Gary Keller, along with Dave Jenks and Jay Papasan.
Learning and Development for Real Estate Agents
As a new real estate agent, I wanted to be with a company that offered lots of education, training, and coaching. One of the first things they offer is a 25 credit course called Ignite. Unlike the real estate course and exam, this course really gets into the nuts and bolts of being a real estate agent. And it also happens to meet the 25 hours of continuing education required to maintain your real estate license. The amount of information you have to take in as a beginner can be overwhelming. They joke it is like trying to drink water from a fire hose. And I would have to agree. There are all kinds of software applications you need to learn – from searching the Multiple Listing Service (MLS), to accessing the required legal forms from the real estate board (GAR), to setting up a web site, to working within eEdge/Dotloop, the market center intranet, a variety of marketing programs, Chartmasters, creating Comparative Market Analyses (CMA), and setting up a database – just to name a few. The Keller Williams office I work at here in Georgia (and I don’t think this is unusual) provides lots of help with this in terms of an in house tech support person, as well as speakers and workshop facilitators on a regular, ongoing basis, all with various areas of expertise, both from within and outside of our office. To top it off, you can ask any real estate agent that is around for help and unless they are on their way to put out a fire, they will gladly try to assist you. If you are really feeling overwhelmed, you can even hire a virtual assistant – someone who will do whatever needs to be done – without having to hire a full time employee that you probably wouldn’t know how to train anyway.
Profit Sharing with Real Estate Agents
The culture turns out to be one of the most important features of a Keller Williams office. Their motto is “Careers worth having, businesses worth owning, and lives worth living.” They want to help you succeed and it’s not just by chance. There is a structure in place to encourage cooperation and it is called PROFIT SHARING. It’s a win-win situation. In fact, Mark Willis former Keller Williams CEO says, “culture starts with profit share.” If you are successful, you bring profit to the market center. That profit is subsequently divided among the rest of the real estate agents participating in the profit share program. You become a participant by bringing new real estate agents into the company. To put it simply, if you are a real estate agent and you bring in another agent and that agent makes a profit, you get a percentage of it -not from the agent but from the profit pool. I’ll explain that in more detail later, but lest you think that must be a small amount, Keller Williams is on track to give out $140 million this year alone! Can you imagine a better incentive to help each other succeed? Some people are so good at recruiting new real estate agents that they no longer sell houses. Others are retired from selling and just sit back and collect their share which I am told exceeds a million dollars a year for some people. I know one team in my office is on track to receive $100,000 this year -just in profit share! What a great retirement plan. And guess what, after 3 years and one day you are vested. This means you will continue to get a share even if you retire. Plus, you can will it to your heirs.
Real Estate Agents: The Heart of the KW Organization
But there is more. Keller Williams is a private company unlike most of the other real estate franchises. This means they don’t have shareholders that they are responsible to, so profits at KW go to the stakeholders (i.e. real estate agents). They have no debt! KW is focused on branding you the agent, not the company. Therefore, they are not competing with you. You are their customer not the home buyers or sellers. KW doesn’t spend money on marketing either. Think about it. When was the last time you saw a commercial on TV for a Keller Williams balloon or whatever? You are encouraged to brand your own business. Gary Williams says “ The agent is the brand of recognition, KW is the brand of reputation.”
Decisions about the direction of the company are made by the Agent Leadership Council (ALC) which is composed of people from the top 20% of producers in the office so they have a vested interest in our success and you have a voice through them. This same structure used here in Georgia is used on the national level as well. Keller Williams also has an open book policy so you can see exactly where the money is going
The Real Estate Agent’s Commission Schedule
Finally, the commission schedule is unique. As you probably know, a typical commission on a sale of a house is 6%. This is split equally between the sellers broker and the buyers broker. These individuals then generally split their 3% with the actual real estate agent, often resulting in 1.5% to the agent. At KW, they operate with what is called a cap. Of that 3%, 64% goes to the agent, 30% to the market center, and 6% to KW. That split changes once the cap is reached. Although the cap varies at different market centers, where I work (in the Roswell, Georgia office) once the percentage going to the market center reaches $15,000, the cap is reached. And when the 6% yields $3000 it is capped. So, let’s say the agent generates $50,000 of commission (which is 3% of sales of approximately $1,667,000). 30% of $50,000 equals $15,000 and 6% of $50,000 equals $3000 and the cap is met. The agent gets to keep $32,000. Thereafter, the agent keeps the whole 3% so on the next $50,000, the agent keeps all $50,000. So on sales of $3,333,334, net to agent would be $82,000 of the $100,000 in commission generated. As a rough estimate, you can figure just under 2% (actually 1.92% which beats the typical 1.5%, and it gets better) of sales would go to the agent until the cap is met. An interesting effect of this set up is that the high performing agent is worth the same to the market center as the agent just making the cap. Their cap is the same.
But there is more. The profit share goes for 7 levels. You get 50% of what the agent on the first level under you earns after expenses of the market center and the split with the owners. Drop me an email and I’ll send you the rest of the breakdown.
So, as you can now clearly see, I would love to have you in my level one. And, naturally, I would love to help you fill up your levels as well. It’s a win-win! Of course, it’s not just about the commissions–as I think I’ve clearly shown. The fact is I couldn’t be happier with Keller Williams, and I’m sure you will feel the same way. If you’re interested in learning more, of if you just have a few quick questions, give me a call. I’d love to talk to you more, and help you think your decision through!