Charles's Blog

Coaching Vs. Consulting

Charles Brown (Counts Real Estate Group) — Wed, 10 Mar 2010 22:20:42 -0800

As all of us move forward in the trying market should we be looking at how we spend our business dollars. Most agents are moving towards coaching to improve their business. I truly believe that is a great decision. However, are you being coached or consulted?

Consulting- The process of making average feel good about not being the best. Your accountability is paying the bill and answering the phone when they call. Usually there are no materials exchanged. You get to buy books. They feed your excuses not your business. These calls become more personal than business. They speak in theory about systems and models not actual plans to improve your business. They don't say look if you do this, this is what will happen. They only have one plan and it is a one fits all. They don't take any responsibility for your failures but boy do they jump on your successes. Oh by the way you pay rather you have success or not. They have no skin in the game.

Coaching-Does not accept average and if you don't put in the work then you don't get to play. The accountability is the on both sides. There will be tasks that you must complete to move on to the next task. No coaching until you complete the assigned task. They actual instruct, provide materials, systems and models (A Playbook) and they are in the trenches with you. They don't feed you through a fire hose. They make a systematic business plan for you to follow. There not just an assigned call time. When you need assistance you need it. They win when you win they lose when you lose. They get paid on results not promises. Wow, that sounds a lot like how REALTORS get paid. You pay when you have success, that's right when you close a transaction you a pay your Coach.

As Real Estate professionals, we seem to have someone reaching in our pockets all the time. Rather is marketing avenues with no guarantees on return on investment, coaching programs with no guarantees on return on investment. The Real Estate professional is the one who is supposed to take all the risk. Remember the life you are suppose to fund is yours, Pay yourself first.

www.charliebrowncoaching.com It is a true Coaching Company-they are in business with you not giving you the business. You pay a small set up fee(as little as $100.00)which includes a business evaluation and begins your path to success. You pay your coach when you get paid not in advance. They have programs for whatever level of business you or your company are doing. It is a LOW RISK HIGH REWARD

State of the Real Estate Industry Is it Broken

Charles Brown (Counts Real Estate Group) — Tue, 26 Jan 2010 23:02:35 -0800

State of the Real Estate Industry Is it Broken – The Real Estate Profession is the one profession where its leaders settle for a 10% TO 20% success rate. Name one other profession where you would be employed if your success rate was that low. As they say it’s a numbers game. The fact is that the same number of Real Estate Brokerages have this same success rate is amazing. The 80/20 rules always applies in life and business. It is the responsibility of the Brokerage and Franchise to provide the Training, Coaching, Models, Systems, and Support to make every sales associate and/or owner successful. Currently this is done through the process of giving every associate and/or owner business theory and then stepping back and seeing who makes it. Today’s professional is looking for a different approach. One where the person they look to for advice takes some responsibility towards their success and/or failure. That is why we have started this company and offer proven Real Estate Coaching systems to work beside any agent from any company to take their business to the level of success they desire. We customize a plan for each client, market and individual goals.

Example of information Provide;

Sources of Real Estate Listings

As a Real Estate coach, I speak to individuals' everyday asking where they can find their next listings gold mines.

We have all been taught from our mentors and brokers that the one with the listings is King or Queen.

However, when consulting with top agents they are not using all of the sources that are available to them. This means that they have not mastered the listing skills to reach their full potential.

We hope that pointing out these sources that those who choose will begin their journey to the mastery and change their personal and business lives.

1. Sphere Of Influence (SOI)

Your SOI is made up of people you know and the people they know, but they don't know you yet. Everyone in your SOI will have at least five friends or family members that will ask and accept their advice.

The Numbers

If you have 100 people in your SOI, then there is a potential of 500 referrals.

2. For Sale By Owners (FSBO)

FSBO stands for more than For Sale By Owners, it truly stands for Fastest Source of Business Opportunity. In today's market it is imperative that we work with the motivated, guess what this group has done? They stood up and raised their hands, they need Help! 8 out of 10 FSBO'S will eventually list their home or use an associate for the buying source.

The Numbers

The average seller listed their properties 6 to 8 weeks after they begin the process.

3. Expired or Withdrawn Listings

This is another excellent source because the home owners have shown that they are motivated to sell their homes. Listings expire or are withdrawn due to issues with the listing. Your job is find out what those issues were and assist the homeowner in correcting them.

The Numbers

In today's Market less than 20% of all listings will sell.

4. Your Local Business Community

Your local business community is an excellent source of listings because they are small business owners too. They have empathy for you, they are in a position to influence others and they might be interested in building a business relationship with you.

The Numbers

The Small Business world is built on referrals. The local business owner has a strong and growing business if they have a referral base of 35% to 50% for closed business.

5. The Internet

The internet is fast becoming a great source for listings, especially in cities with high-tech companies. Currently, most associates are using the internet as an excellent buyer source. Your listings site should be information based and allowing potential sellers to ask for additional information.

The Numbers

Associates who currently capture listing leads for the buyer sites have a conversion rate above 75%.

6. Your Yard Signs

The signs that you place in yards and with the proper riders definitely attract other sellers to you. The more signs you can post, the more yours will be identified with a particular area.

The Numbers

Signs that go up and come down within 90 days will insure you more listings where you are the Real Estate expert.

7. The Listing Farm

Your farm is an area of listing concentration where you become the area expert and you build relationships with the residents. Building your farm requires commitment and planning and may take up to 18months to produce results in today's market.

The Numbers

Remember there are a percentage of sellers that will use the associate who sold them the property. This percentage is somewhere around 25% or 35% depending on your local market.

8. Bank Owned Real Estate

REO'S have been around since Real Estate was sold. They occur even in the best markets. Your ability to get REO listings will be directly proportionate to relationship you have with asset management companies and banks.

The Numbers

This listing source can be an expensive endeavor to begin. Usually the REO associate will be asked to pay for services and then be reimbursed. Some top REO associates have as much as 6 figures out of pocket monies at any giving time.

9. Short Sales

This listing source is an intensive burden on associates who do not have systems and models to maintain the proper communication with bank negotiators. Having a great Pre-listing package for short sales is vital to your success.

The Numbers

Short sales are one of the 9 avenues to relieve property owners of the ownership burdens of their current home.

Summary

These listings sources can all drive your business. The key is the foundation you lay out in your listing plan.

There is no one plan fits all out there, you need to look at your available revenue, what your listing goals are and what percentage of your business will come from listings.

Your success is our success.

It's called a Pyrmid Scheme-When you have to pay in to receive passive returns!!

Charles Brown (Counts Real Estate Group) — Fri, 27 Jun 2008 15:56:56 -0700

I have seen all these blogs about this new way to make money by referring agents to a new listings service. There are numerous ways to join, you pay this much or that much and you have a special position in the order of things. Get more to sign up and you get more money. The questions I must ask Does it sell Real Estate? Who captures the e-mail addresses? How do I know when someone is looking at my property? How does this system find it's way to the general public? Can the data be sold to a 3rd party? What guarantees come with this system?

The key to selling any type of property is to price it right, provide the property the most exposure through known media sources. Real Estate is a Local Business driven by local Real Estate agents using their local influence. There is no magic bill but go back to the basics and get out there an meet people face to face. This will be the 4th or 5th best year in Real Estate in Bay County. You just got to go back to work. People are not falling out of the sky and landing in your car. You have to prospect, prospect and then market. Your Real Estate Business is directly proportional to when someone thinks of Real Estate, they think of you.

It has that feel of picking up pennies and walking over dollars. Learn to run your Real Estate Business as a Business not some Hobo shack full of lets try this and that. I do agree that all associates need 5 to 7 streams of passive income at retirement. During times like this Real Estate associates need to keep their eyes on the ball not the magic trick. Become education based, look at new ways to do business, get back to the phones and provide their clients/customers the best customer service they can provide. I know that this works. The proof is in the numbers!

Commercial Division Comes to Keller Williams Realty

Charles Brown (Counts Real Estate Group) — Fri, 28 Mar 2008 14:58:18 -0700

We are pleased to announce that 2008 will mark the launch of the Keller Williams Realty Commercial Division!

Our goal is to make Keller Williams the commercial real estate platform of choice by providing our commercial associates the technology, marketing tools, and resources to succeed in their commercial businesses. We want to create synergy and referrals between the residential and commercial sides of Keller Williams Realty, increasing the income and production potential of all our agents. And we look forward to adding to our associates' profit sharing through increased profitability of our Market Centers.

We are also honored to announce that Buddy Norman, a true leader in commercial real estate, has joined the Keller Williams family to spearhead this new venture.

Buddy has more than 15 years of experience in the commercial real estate industry - including leadership within international commercial firms, such as Cushman & Wakefield and The Staubach Company. He has built new divisions and trained commercial brokers all over the U.S. - including Dallas, Atlanta, Washington D.C. and San Diego. A consistent top producer, Buddy has averaged more than 400,000 square feet per year of commercial leasing and sales transactions over the last 10 years.

Buddy will serve as the President of Keller Williams' Commercial Division, and will be working closely with a Commercial Advisory Council (CAC) of top commercial brokers within our company that will guide the launch and implementation of this new division.

Our plan is to launch Keller Williams Commercial this fall. And as an agent-centric company, we want to ensure that we build this division for our agents and by our agents. We ask that you take a few moments to fill out the short survey below. If you are a commercial agent or have interest in commercial real estate, please share your input on how we can build this new venture to be a true win-win for our offices and our associates:

Click here to take our short Commercial Agent survey.

We know that with the leadership of Buddy, our Commercial Advisory Council, and your input, we can truly build a Commercial Division that will create the commercial real estate platform of choice! If you have any questions or would like to find out more about the KW Commercial Division, please contact us at commercial@kw.com.

New Year is it time for a change

Charles Brown (Counts Real Estate Group) — Mon, 28 Jan 2008 14:33:54 -0800

Happy New Year!

I think everyone in our industry will acknowledge that we find ourselves in a very challenging market. I consider this to be a time of great opportunity. History shows that there have been several of these cycles in nearly 30 years. One thing I know is that Real Estate careers will be made in the coming year and smart agents will take their "unfair share" of the market in a way that will help them build their brand and their business for years to come. Likewise, agents will leave the real estate business in record numbers if they don't have the skills, systems and support needed to sustain them.

This is a time when many agents are considering their options...and they should be. In considering your options please ask yourself the following questions:

1. Does my company have a retirement program in place for me? Do the owners share their profits with agents in addition to paying commissions?

2. Does my company's Risk Management program include training, E&O insurance and an attorney on call and does it cost $600 a year or less?

3. Does my company's commission structure limit (cap) the amount of money the company takes and allow me to go to 100% commission split?

4. If my company is a franchise does it limit (cap) the Royalty fee or franchise fee I pay?

5. Does my company offer a group Health insurance plan?

6. Does my company offer an in-house training program that gives me the systems, models and dialogues I need to be competitive in today's market?

7. Is my Manager/Owner NON competing? Is all the referral business coming into my office referred to the agents in my office?

8. Does my company permit me to put MY name and cell phone number on For Sale signs on MY listings thus assuring sign calls go to me?

9. May I put my name and cell number in my listings when they are advertised in the company ad?

10. Does my company have an in-house coaching and mentorhsip program dedicated to helping agents build their brand and their business?

11. Does my company have state of the art technology tools, a Technology Director and an in-house technology training program? Do they offer me a free website?

12. Does my company open its books monthly so I can see how the money I make for them is being spent?

13. Do I have a say in company policies and the way in which my office is run?

14. Has my company's overall agent & office count grown dramatically over the past year?

15. If I decided to leave my current company would they allow me to take my listings with me? If no, why not I was the one that earned the business? If I left would they cut my commission split on the deals I currently have with them? If so, why?

16. Why does my current broker make me charge a transaction fee to my customers and then keep it for his/her use? Would my broker consider allowing me the option of charging this fee and keeping it to help me in my business?

17. Can I get leads from my company free from referral fee? Can I get leads from my current company without having to sit floor time (which is a passive activity) just to get them?

18. Do I love where I work? Is the culture of my office and the attitude of the support staff upbeat, positive and service oriented? Do I feel like the valued customer of my office?

19. Does my company consider me to be their partner and a valued asset?

20. Does my broker really care about me in every area of my life and not just my business growth, work with total integrity, character and professionalism?

If your answer to any of these questions is NO, please consider that you have options and may want to explore them.

These topics above are just a few of the many our company has worked on to give it's agent/partners the benefits they've asked us for. So, if the answer to most of the questions above was No, we should talk as soon as possible! I would love to share with you what your options truly are at Keller Williams Realty.

My cell phone number is 850-276-4365; my e-mail address is cbrown@kw.com Please call me right now. All conversations will be held in strictest confidence. Placement services Nationwide. Learn more at http://www.kwsuccessrealty.com/

2008 is the Year of Opportunity, may it be your best year in real estate ever and remember, the market is the market but success is a choice! The speed at which you succeed is directly tied to whom you are in business with and the speed at which they function.

The Buck Stops Here! Let's make this Market instead of it making us!!

Charles Brown (Counts Real Estate Group) — Thu, 27 Dec 2007 09:44:29 -0800

TRAINING NUGGET

The First Decision For Success

Article by: Andy Andrews from "The Traveler's Gift"

"The Buck Stops Here!"

From this moment forward, I will accept responsibility for my past.
I understand that the beginning of wisdom is to accept the responsibility for my own problems, and by accepting responsibility for my own past; I free myself to move into a bigger brighter future of my own choosing.
Never again will I blame my parents, my spouse, my boss, or other employees for my present situation.
Neither my education nor lack of one, my genetics or the circumstantial ebb and flow of every day life, will affect my future in a negative way.
If I allow myself to blame these uncontrollable forces for my lack of success, I will be forever caught in a web of the past.
I will look forward; I will not let my history control my destiny. The Buck Stops Here!
I accept responsibility for my past.
I am responsible for my success.
I am where I am at today, mentally, physically, spiritually, emotionally, and financially because of the decisions I have made.
My decisions have always been governed by my thinking; therefore I am where I am today mentally, physically, spiritually, emotionally and financially because of how I think.
Today I will begin the process of changing where I am mentally, physically, spiritually, emotionally and financially by changing the way I think.
My thoughts will be constructive, never destructive.
My mind will live in the solutions of the future; it will not dwell in the problems of the past.
I will seek the association of those who are working and striving to bring about positive changes in the world.
I will never seek comfort by associating with those who have decided to be comfortable.
When faced with the opportunity to make a decision, I will make one.
I understand that God did not put in me the ability to always make right decisions, he did, however, put in me the ability to make a decision, and then, make it right.
The rise and fall of my emotional tide will not deter me from my course.
When I make a decision, I will stand behind it.
My energy will go into making the decision. I will waste none on second thoughts.
My life will not be an apology. It will be a statement.
The Buck Stops Here!
I control my thoughts. I control my emotions.
In the future when I am tempted to ask the question, "Why Me?" I will immediately counter with the question, "Why Not Me?"
Challenges are gifts, opportunities to learn.
Problems are the common thread running through the lives of great men and women.
In times of adversity, I will not have a problem to deal with; I will have a choice to make.
My thoughts will be clear; I will make the right choice.
Adversity is preparation for greatness. I will accept this preparation.
Why Me? Why Not Me!
I will be prepared for something great!
I accept responsibility for my past.
I control my thoughts. I control my emotions.
I am responsible for my success.

THE BUCK STOPS HERE!

Seek Wisdom

Charles Brown (Counts Real Estate Group) — Thu, 27 Dec 2007 09:41:42 -0800

TRAINING NUGGET

The Second Decision For Success

Article by Andy Andrews, from the book "The Traveler's Gift"

"I WILL SEEK WISDOM"

I WILL SEEK WISDOM
Knowing that wisdom waits to be gathered, I will actively search her out.
My past can never be changed, but I can change the future by changing my actions today.
I WILL change my actions TODAY!
I will train my eyes and ears, to read and to listen to books and recordings that bring about positive changes in my personal relationships and a greater understanding of my fellow man.
No longer will I bombard my mind with materials that feed my doubts and fears.
I will read and listen to only what increases my belief in myself and my future.
I will seek wisdom.
I will choose my friends with care.
I am who my friends are. I speak their language and I wear their clothes.
I share their opinions and their habits.
From this moment forward, I will choose to associate with people whose lives and lifestyles I admire.
If I associate with chickens, I will learn to scratch the ground and squabble over crumbs.
If I associate with eagles, I will learn to soar to great heights.
I AM an eagle!
It is my destiny to fly.
I will seek wisdom.
I will listen to the council of wise men.
The words of a wise man are like raindrops on dry ground.
They are precious and can be used for immediate results.
Only the blade of grass that catches a raindrop will prosper and grow.
The person who ignores wise council is like the blade of grass, untouched by the rain, soon to whither and die.
When I council with just myself, I can make decision only with what I already know.
By counseling with a wise man, I add his knowledge and experience to my own and dramatically increase my success.
I will seek wisdom.
I will be a servant to others.
A wise man will cultivate a servant's spirit for that particular attribute attracts people like no other.
As I humbly serve others their wisdom will be freely shared with me.
Often the person who develops a servant's spirit becomes wealthy beyond measure.
Many times the servant has the ear of the king.
And a humble servant often becomes a king, for he is the popular choice of the people.
He who serves the most, grows the fastest.
I will become a humble servant.
I will not look for someone to open my door.
I will look to open the door for someone.
I will not be distressed when no one is available to help me.
I will be excited when I am available to help.
I will be a servant to others.
I will listen to the council of wise men.
I will choose my friends with care.

I WILL SEEK WISDOM!

From The Stanford Graduate School Of Business

Charles Brown (Counts Real Estate Group) — Mon, 19 Nov 2007 10:21:28 -0800

The Keller Williams Business Model is now being taught as a course at Stanford University. The Model is being review due to the growth of Keller Williams Reaty.

CASE: HR-29

DATE: 04/12/07

Professor James N. Baron and Brian Tayan prepared this case as the basis for class discussion rather than to

illustrate either effective or ineffective handling of an administrative situation.

Copyright © 2007 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved. To order

copies or request permission to reproduce materials, e-mail the Case Writing Office at: cwo@gsb.stanford.edu or

write: Case Writing Office, Stanford Graduate School of Business, 518 Memorial Way, Stanford University,

Stanford, CA 94305-5015. No part of this publication may be reproduced, stored in a retrieval system, used in a

spreadsheet, or transmitted in any form or by any means .. electronic, mechanical, photocopying, recording, or

otherwise .. without the permission of the Stanford Graduate School of Business.

KELLER WILLIAMS REALTY

There is nothing that Coldwell Banker or any other company has that can compete with

this model.

. Mark Willis, President and CEO, Keller Williams Realty

INTRODUCTION

Mark Willis had just finished meeting with Mo Anderson and Gary Keller. Willis, who was the

president and CEO of Keller Williams Realty, was discussing with his vice chairman and the

founder of the company plans to expand Keller Williams. presence on the East and West Coasts.

The three executives knew the financials extremely well. They knew that the company.s

operating model made it among the most profitable (if not the most profitable) of the major real

estate companies in the United States. In addition, the company was also on its way to becoming

one of the largest real estate companies by number of agents, having grown from 8,000 in 2000

to over 70,000 in 2006 through the sale of new franchises and through agent recruitment.

Nevertheless, the plan to increase Keller Williams. presence on the two coasts was not without

risk. Willis, Anderson, and Keller knew that preserving the culture of the company was critical

to its future success. It would be easy to replicate the operating systems⎯everything from the

economic model to the compensation plan, the profit share, and the organizational

structure⎯most of which were unique to the industry. But if Keller Williams could not find new

franchise owners or recruit agents who lived the company.s culture, expansion would fail. As

Anderson told Willis in the meeting, .The culture in this company is like the life blood flowing

through a body. Culture supplies the oxygen for the body to live, and without it, this system falls

flat on its face.. Willis knew she was right. Competitors had woken up to Keller Williams.

success, and several upstarts had tried to replicate their systems. None had adopted the culture

and none to date had been financially successful. As Keller Williams expanded to a much larger

size, competition would increase from both new and established players, and the company would

have to be careful to find new franchise owners who would continue to implement the culture

and systems that were responsible for its success.

Keller Williams Realty HR-29

p. 2
RESIDENTIAL REAL ESTATE INDUSTRY1

The housing market constitutes a significant portion of economic activity in the U.S.,

representing approximately 15 percent of gross domestic product (GDP). In 2005, 1.3 million

new homes and 7.1 million existing homes were sold.2 The median price for existing home sales

was $208,300, up from $185,200 the previous year.3 The housing sector provided millions of

jobs directly in construction, mortgage finance, property management, and real estate brokerage,

and indirectly in the form of home improvement and property management.

Home ownership represents a significant source of wealth for individuals and their families. In

2004, 69.0 percent of U.S. households owned the homes in which they lived, up from 64.7

percent in 1995 and 63.9 percent in 1985.4 Home ownership accounted for 32.3 percent of U.S.

household assets in 2004, compared to 35.7 percent for financial assets such as stocks, bonds,

and other savings.5 Low long-term interest rates allowed many families to refinance their

mortgages and withdraw cash to provide for personal consumption.

Real Estate Brokers - Principles of Operation

Most home sale transactions are facilitated through real estate brokerage firms whose agents

represent either the buyer or the seller. In 2004, there were 236,000 real estate office locations in

the U.S. These offices included all ownership structures.from independently owned and

managed to regional or national franchises. Major nationwide brokerage firms included

Coldwell Banker, Century 21, and Prudential. Despite the nationwide presence of some real

estate brokerage firms, the industry remained local and fragmented. The top ten regional

brokerage firms had only a 9.1 percent market share in 2004.

In order to operate in a local market, a brokerage firm must be licensed by the state. The

individual real estate agents also must be licensed. Brokerage firms earn revenue through

commissions generated by the sale of a home. Standard commission rates are typically 5 to 6

percent of the transaction value, although in some cases the customer can negotiate a discount.

Commissions are split when two brokerage firms are associated with a transaction, in order to

compensate for the work performed by both the buying and the selling agent. The broker

compensates the agent responsible for the transaction with either a fixed fee or, more typically, a

1 Industry information from: National Association of REALTORS®, .Structure, Conduct, and Performance of the

Real Estate Brokerage Industry,. November 2005,

http://www.realtor.org/Research.nsf/Pages/CompetitioninRealEstateResearch, (April 3, 2006), except where

noted.

2 U.S. Census Bureau and the Department of Housing and Urban Development, .New Residential Sales,. 2005,

http://www.census.gov/const/www/newressalesindex.html (April 3, 2006).

3 National Association of REALTORS®, .Existing Home Sales, Monthly Data for the U.S. and Regions,. 2005,

http://www.realtor.org/Research.nsf/Pages/EHSdata (April 3, 2006).

4 U.S. Census Bureau, .Homeownership Rates for the U.S. and Regions: 1965 to Present,. 1985-2005,

http://www.census.gov/hhes/www/housing/hvs/historic/histt14.html (April 3, 2006), average over four quarters.

5 Bucks, Brian K. et al, .Recent Changes in U.S. Family Finances: Evidence from the 2001 and 2004 Survey of

Consumer Finances,. Federal Reserve Board, http://www.federalreserve.gov/pubs/bulletin/2006/financesurvey.pdf

(April 3, 2006).

Keller Williams Realty HR-29

p. 3

percentage of the commission. In 2004, a common split was 60 percent paid to the agent and 40

percent retained by the broker to cover operating expenses.

Brokerage firm expenses include rent and occupancy, advertising, listing service fees, local real

estate board fees, insurance, recruiting, training, and miscellaneous office expenses. Some

brokers seek to differentiate themselves in the market by entering into franchise agreements with

a national firm. Under such an agreement, the regional brokerage office pays a franchise fee in

exchange for the right to use the national firm.s name. These franchised brokers remain

independent, with local management; however, they have to agree to adhere to the basic

operating principles of the national firm as outlined in the franchise agreement. Home Sale Process

Home owners sell their property by listing it with a local brokerage firm. An agent for the

brokerage firm enters the property information into a regional or local database, called the

Multiple Listing Service (MLS). Access to the MLS is restricted to licensed real estate agents.

Most MLSs make their listing available to all licensed participants in the area, thereby ensuring

that most brokers in a region have access to the full inventory of properties on the market at a

given time. As a result, home sellers can list their property with one brokerage firm and still be

certain that it is available to the entire market of buyers. Likewise, home buyers need to contact

only one brokerage firm to have access to the complete listing of properties for sale.

Customers typically choose a brokerage firm or agent based on referral or their experience in a

previous transaction. The National Association of REALTORS® estimated that, in 2004, 60

percent of customers relied on a referral or past experience when selecting an agent. In addition,

homeowners consider such factors as reputation in the market, expertise with a particular type of

transaction, or brand name. In many cases, the customer chooses a particular agent with a

reputation of knowledge and good service rather than the brokerage firm.

In some cases, homeowners choose to offer their property without listing through a broker.

These transactions are called for-sale-by-owner (FSBO). In FSBO transactions, the homeowner

seeks to execute the transaction without the help of a seller.s agent and the property is not listed

in MLS. However, the seller might be contacted by a licensed real estate agent representing the

buyer, in which case the seller has to negotiate directly with the buyer.s agent for appropriate

compensation. In 2004, approximately 14 percent of home sales were FSBO.

Real Estate Agent

Most real estate agents are independent contractors representing a particular brokerage firm.

Agents typically do not receive salary, health and retirement benefits, or paid time off. In most

cases, the single source of compensation agents receive is the commission split negotiated with

the broker.

Real estate agents are required to pass a qualifying exam and be licensed in order to do business

in a particular state. New real estate agents often have to climb a steep learning curve in order to

gain expert knowledge of the local market and build a reputation in the community. As a result,

it often takes several years before a real estate agent gains financial success.

Keller Williams Realty HR-29

p. 4

Agents select the broker they work for based on the commission split offered, the broker.s

franchise name and reputation, or other work arrangements directly negotiated. Successful

agents often seek improved compensation terms from their existing broker. If they are unable to

achieve improved compensation terms, they might choose to switch to a competing broker that

offers a more favorable commission split, or start their own independent brokerage firm.

Because agents are the main source of contact with a customer, they have strong influence over

that customer.s satisfaction. As an agent becomes more successful in a given local market, his or

her reputation often becomes more important than that of the brokerage firm when it comes to

attracting business. Because the relationship between the agent and his or her customer base is

transactional, there are low switching costs for the homeowner to continue working with the

same agent if s/he changes firms. As a result, the agent, too, faces low switching costs when

deciding whether to change brokerage affiliations.

National Association of REALTORS®

The National Association of REALTORS® is a trade organization that provides political

lobbying, advertising, and economic analysis in support of the real estate industry. A National

Association of REALTORS® membership serves as a professional designation for real estate

agents and is a signal of professional quality to many prospective customers. In 2004, there were

approximately 2.5 million licensed real estate agents in the U.S., not all of whom were active in

the market. Of these 2.5 million, more than 1.2 million were members of the National

Association of REALTORS®.

RE/MAX: THE 100 PERCENT COMMISSION COMPANY6

In 1973, a new competitive model was introduced to the real estate industry. David Liniger, a

real estate agent in Denver, Colorado, perceived many deficiencies in the operations of

traditional real estate brokerages. He believed that the real estate profession was widely

characterized by junior-level, inexperienced agents whose lack of knowledge led to poor

customer service. For the owner of the brokerage firm, these agents were expensive to maintain,

because they required the same amount of overhead expense as top-producing agents but did not

contribute the same level of commission revenue. In many cases, a junior-level agent might sell

only one or two houses per year, barely generating enough commission to cover his or her costs

to the firm. By and large, these agents ended up leaving the profession after only a few years,

leading to expensive turnover for the brokerage.

The favorable economics of the industry were largely generated by top-producing agents.

Liniger observed that the top 20 percent of agents generated approximately 80 percent of the

commission revenue for the industry. In addition, these agents had reputations for providing the

highest level of customer service and were most knowledgeable about their local markets.

Nevertheless, these agents were employed under compensation agreements that obligated them

to split their commissions evenly with their brokerages. The commission split was generally the

6 RE/MAX information from: Harkins, Phil and Keith Hollihan, Everybody Wins, (Hoboken, New Jersey: John

Wiley & Sons, 2005).

Keller Williams Realty HR-29

p. 5

same for top-producing agents as for low-producing ones, even though top producers were

significantly more profitable for the firm. In effect, top-producing agents were subsidizing lowproducing

agents. Unable to negotiate substantially better compensation terms, these agents

often left to start their own brokerage firms.

Liniger.s vision for RE/MAX was to create a company that employed only top-producing agents.

To attract these agents, RE/MAX would offer 100 percent of the commission as compensation to

the agent, and in turn would charge the agent a flat fee to cover operating expenses and use of the

RE/MAX name. The flat fee would be set such that an agent would break even at approximately

three sales transactions per year. Above that level, commission revenue would flow entirely to

the agent; below that level, an agent would be better off under the standard industry split. This

compensation structure would be attractive to top-producing agents who were confident in their

future success and would deter entry-level of low-producing agents who could not afford the risk

of such an arrangement. The result would be a self-selection process whereby the best real estate

agents would flock to and remain with RE/MAX.

From Liniger.s perspective, RE/MAX was not in the real estate business so much as it was in the

real estate agent business. In order for RE/MAX to succeed, it needed to offer the best

environment for its agents to succeed. As a result, in addition to its compensation system,

RE/MAX focused on creating a training-based organization that would increase the success of its

agents.

KELLER WILLIAMS HISTORY

In 1986, Gary Keller, real estate agent and president of a small real estate company in Austin,

Texas named Keller Williams Realty, found that he was losing a significant percentage of his

top-producing agents to a fast-expanding RE/MAX franchise in the area. They were leaving

because a crash in the Austin real estate market made economic conditions difficult and

RE/MAX was offering 100 percent commission, which was superior to the standard 50 percent

split that Keller Williams offered at the time. To Keller, it was expensive to dedicate resources

to the development of agents, only to lose them once they became productive.

Keller gathered his remaining agents and asked them to work with him to create a system that

would encourage people to stay. Together, they designed a new model for managing the firm,

which he implemented the following year. Keller believed that this new model would not only

stem the tide of losses to 100 percent commission firms, but would reverse the trend in Keller

Williams. favor. He was convinced that the system that he and his agents designed was superior

from both an economic standpoint and from a management and cultural standpoint, and that it

would ultimately provide a sustainable competitive advantage in the real estate brokerage

industry.

Keller continued to manage the company throughout the 1980s and into the early 1990s, opening

additional offices in Austin and other cities in Texas. Not all of these offices proved to be as

successful as the original Austin office, although Keller had continued confidence that the Keller

Williams model would work. In 1992, he began to consider taking the company national. At

that time, he met Mo Anderson and discussed with her the idea of opening an office in

Oklahoma. Anderson, who was in her mid-50s at the time, had grown up as the daughter of a

Keller Williams Realty HR-29

p. 6

tenant farmer and spent her early career as a public school music teacher. Later, she entered the

real estate industry and successfully managed a Century 21 office in Edmond, Oklahoma, which

she eventually sold to Merrill Lynch. At the time, it was the third most productive office by

transaction volume in the Century 21 franchise system (7,500 offices) even though the average

home price in Oklahoma was substantially below the national average.

Anderson recognized the promise of the Keller Williams model, having herself implemented

similar policies and practices in her Century 21 office, and quickly went to work building the

Oklahoma Keller Williams office. By 1995, Keller recognized that Anderson held many

leadership skills that he himself lacked and asked her to take over as CEO of the company.

Under Anderson.s leadership over the next 11 years, Keller Williams corrected operational

issues at offices established early on, standardized its operational model, and successfully grew

to over 600 offices and 72,000 agents (see Exhibit 1 for Keller Williams growth statistics). By

2006, at the age of 69, Anderson ceded much of the management of the company to Mark Willis,

who assumed the role of president and CEO, and to Mary Tennant, COO. However, Anderson

continued to play a very visible leadership role in the company as vice chairman.

The Keller Williams Model

The Keller Williams approach combined an economic model that delivered profits through

economies of scale and a cultural model based on interdependent relationships and succeeding

through the efforts of others. Keller Williams believed that its model was uniquely differentiated

from that of its two primary competitors: traditional real estate brokerages and 100-percent

commission organizations.

Traditional real estate brokerages that were either part of a national franchise or independently

owned operated under what Keller Williams described as a .dependent-relationship model..7

These companies spent millions of dollars on advertising to increase local awareness of their

brand, which they believed gave them an advantage in attracting business in the marketplace.

The agents who worked at these companies sought to gain business referrals and increase their

own reputation in the marketplace through an association with this brand. Even though agents at

these brokerages were independent contractors, the office manager made all major decisions in a

top-down manner and the relationship was culturally one of employer-employee. For example,

in recruiting a talented real estate agent to his office, the broker could cut special side deals that

included a more attractive commission split or other financial terms without the other agents in

the office knowing.

The 100-percent commission organizations, in particular RE/MAX, operated under an

.independent-relationship model.. In charging agents a fixed expense for the use of office space

and the company.s name brand, these firms effectively created a culture where agents operated

largely as independents within the office. Very successful agents were attracted to the model

because it provided generous commission splits; however, it did not create a culture of people

working together to improve their own success and the success of the whole office.

7 Interview with Mark Willis, president & CEO, Keller Williams Realty, November 8, 2006. The language of

dependent, independent and interdependent relationships adopted from Stephen Covey.

Keller Williams Realty HR-29

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Keller Williams described its own business model as an .interdependent relationship. between

the owners of the local office and the agents, designed to achieve profits through economic scale.

Both the brokerage and the agent were expected to profit as partners, sharing in both the net

income and the decision making. Not liking the connotation implicit in such words as .broker,.

the company referred to its brokerages as .market centers,. the owners of the market centers as

.operating principals. (or OPs), and the individuals who led the market centers as .team

leaders.. The agents, the OPs, and the team leaders were expected to succeed through each

other.s efforts.

The Economic Model

The Keller Williams economic model was based on keeping fixed expenses low and generating

high commission volume to achieve economies of scale and excess profitability at the marketcenter

level. This economic leverage was driven primarily by having a significantly larger

number of agents per market center than competitive real estate companies. Where the average

brokerage in the U.S. had 49 agents per office in 2006, the average Keller Williams market

center had 174 agents. As a result, the average Keller Williams market center generated

significantly higher transaction volume and gross commission income than its competition. This

higher aggregate transaction volume at the market-center level more than compensated for lower

average sales productivity per agent (see Exhibit 2 for information on Keller Williams market

center productivity versus its competition).

Both traditional brokerages and 100-percent commission organizations failed to achieve similar

economies of scale because their offices were located too close together. The international

headquarters for those companies, seeking to maximize franchise fees by increasing the number

of offices opened, allocated too small a territory to each brokerage. These brokerages might

achieve a large market share of both agent count and transaction volume in a given territory but

this market share was split among more than one office. As a result, these franchises operated

with a larger fixed cost base that decreased their profitability.

In contrast, the Keller Williams model encouraged each market center to keep overhead low and

to lead growth by building revenues before incurring the associated expenses. The main driver

of profitability was agent count, with market centers designed to break even at approximately 40

agents. Keller Williams referred to the first 18-month period that a market center was in

operation as the launch period. The most profitable Keller Williams market centers often had 40

agents recruited within the first month of operation and increased that count to 100 agents by the

end of the launch period.

Finally, Keller Williams gave explicit instructions to OPs and team leaders about how to manage

a market center to maximum profitability. The instructions covered such specific issues as

budget and cash flow management, through which Keller Williams sought to instill a regimented

business management perspective to the operation of the market center.

Compensation Model

The commission split that Keller Williams offered agents was a hybrid of that offered by

traditional franchises and 100-percent commission organizations. The Keller Williams agent

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received a 70/30 commission split from the first dollar of gross commission income (GCI)

generated. The agent was responsible for paying a franchise fee to the international office each

year, which was capped at $3,000. The agent was also responsible for paying a fee to the market

center, referred to as company dollar. The company dollar was also capped, at a level that varied

by region, with areas with high average home prices having a higher cap to account for the

general higher cost of doing business in such areas. The cap was determined by the OP at the

time of launch and generally varied from $20,000 per year to upwards of $50,000 per year. The

agent kept all GCI generated above these payments. The agent was charged for all variable

expenses out of their retained portion of GCI (see Exhibit 3 for a comparison of Keller Williams

and competitor commission splits).

Agents who generated sufficient GCI to pay the maximum company dollar to the market center

were referred to as cappers. From the perspective of the market center, it was profitable to

increase the number of cappers because these individuals were making the maximum

contribution to cover the market center.s fixed costs; that is, they were the most efficient revenue

producers. Agents who produced above the cap did not generate additional revenue to the

market center and therefore made no additional contribution to profitability. Because the market

center was largely a fixed-cost operation, a high number of cappers led to a high level of

profitability.

Keller Williams was unique among real estate companies in that it offered a second source of

income⎯profit share⎯to its agents. The formula for distributing profits was based on the

agents each agent recruited to the company, the productivity of those agents, and the cash profits

generated by each market center. This formula gave agents credit not only for the productivity

of agents they directly recruited but also agents that those agents recruited in an elaborate stepfunction

that extended seven levels. Importantly, agents were given credit and a piece of profit

share regardless of which market center they recruited an agent to; an agent in Texas could

received profit share for the productivity of an agent that s/he referred to a Florida market center.

Every month on the 21st day of the month, each market center was required to transmit a report

of the profits it had made to the international office. These numbers were fed into a centralized

system which computed the profit share owed to each agent in the company. All market centers

used the same profit share calculation:

! 25 percent of the first $2,990 in market center profit was contributed to the profit share pool.

! 35 percent of the next $8,250 was then contributed to the pool.

! 50 percent of any profit above $11,240 was also contributed to the pool.

! The remaining profits belonged to the OP of each market center as a return on his or her

capital.

The total profit pool was then allocated to all the agents in the company according to the profit

sharing formula (see Exhibit 4 for the profit sharing formula). Effectively, the profit share

rewarded the recruitment of high productivity agents. Although the size of the profit share

varied based on a number of factors, an agent with approximately 10 people in his or her .tree.

(at all seven levels) would receive about $200 per person annually from the profit share formula;

an agent with 200 people in the tree would receive about $90 to $95 per person; and an agent

Keller Williams Realty HR-29

p. 9

with 500 people would receive $75 per person. Importantly, a Keller Williams agent who retired

from the company would continue to receive profit share so long as the agents they recruited

remained with the company. Even if the agent died, his or her estate would continue to receive

the profit share. This policy represented a rare form of residual income in an industry where

agents typically saw their income stop entirely upon retirement.

In 2005, Keller Williams shared profits of $48.5 million with its agents. The company expected

to have a total profit-share pool of $150 million by 2010 (see Exhibit 5 for the historical growth

in profit share). No other national franchise in the real estate industry had a common technology

and accounting platform shared by all offices whereby it could easily replicate this calculation.

Implementing such a system for established real estate companies would represent a significant

investment.

The combination of the Keller Williams economic model with the two-part compensation system

resulted in a system that offered high profitability both to agents and to the market center OPs

(see Exhibit 6 for a comparison of the profitability of Keller Williams to that of top real estate

companies).

Cultural Model

Two essential factors that led to Keller Williams. rapid growth were the economic model of

achieving outsized profits at the market-center level through economies of scale and the

compensation model of offering a generous commission split and a share of the profits. Yet

according to the leaders of Keller Williams, it was the cultural model of interdependence and

success through the efforts of others that was the critical element leading to Keller Williams.

overall success. Mary Tennant, COO, stated: .We know for a fact that our systems don.t work

without our culture. We need our culture to reach our full potential..8 Mo Anderson called the

culture .the glue that holds it all together..9 According to Sharon Gibbons, former vice president

of finance, .It.s very difficult to separate the culture and the systems, because the systems are

written for the culture and the culture exists for the systems..10

The Keller Williams culture was described in the company.s mission, values, and belief

statements and was reflected in all aspects of the company.s systems, policies and practices.

Mission, Values, and Beliefs

The Keller Williams mission was: .To build careers worth having, businesses worth owning, and

lives worth living.. Building careers worth having meant that every individual⎯whether an

agent, an OP, a team leader or other position⎯was expected to strive to reach the highest level

of professional performance. It also meant that those individuals should help those around them

to reach that highest level. Building a business worth owning meant a company that was highly

profitable, with those profits shared by the OPs and agents alike through profit share. Creating

lives worth living meant behaving at the highest ethical and moral level possible, with the fruits

8 Interview with Mary Tennant, COO, Keller Williams Realty, November 8, 2006.

9 Interview with Mo Anderson, vice chairman, Keller Williams Realty, November 8, 2006.

10 Interview with Sharon Gibbons, VP of MCA Division, November 8, 2006.

Keller Williams Realty HR-29

p. 10

of that effort clearly visible through a sound reputation and a practice of giving back to the local

community.

The company.s values were:

! God, family, then business.

! We believe real estate is a local service business driven by individual real estate agents, their

local images, their centers of influence, and their client base.

! We believe our associates should be treated like stakeholders.

! We believe stakeholder companies always measure profit or loss, open the books, and tell the

truth.

! We believe who you are in business with really does matter.

! We believe profit matters.

! We believe no transaction is worth our reputation.

Mo Anderson elaborated on the company.s value system:

The first one is the most important one to us and that is .God and family first, and

then business.. Well that.s about as politically incorrect as you can get, but you

know what, I don.t care. I tell the people who come to see us . because we make

everybody come to see us before they think seriously about buying a franchise . I

tell them up front that you need to know that God and family are really important

to this company. Now you may be Jewish or Buddhist or you may be Christian,

but whatever your thing is, that and your family are supposed to be first. And this

business is second. And if that doesn.t feel right to you, then we.re not a match.

Because that.s the most important value we have.11

Keller Williams. belief system was documented by Gary Keller in collaboration with a group of

his top-performing agents from the original Keller Williams office in southwest Austin. They

were written as a description of the aspects of the work environment and professional standards

that these agents felt led to their success as a business. This belief system was later

institutionalized by Anderson and the other leaders of Keller Williams as a set of standards that

all team members were expected to use to guide their professional interactions. According to

Gary Keller:

Working together successfully with anyone else, one of the things that you begin

to realize is there has to be a certain amount of commonality, and usually it.s

commonality of culture . of how you think, how you talk to each other, how you

make decisions together, how you interact together.12

The common culture of Keller Williams was described in this belief system which Gary Keller

encapsulated with the acronym WI4C2TS (pronounced .why four see two tees.):

! Win-Win Or no deal

11 Interview with Mo Anderson, Keller Williams, July 17, 2006.

12 .Gary Keller on the History of Keller Williams,. Keller Williams Realty, Inc., 2006.

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! Integrity Do the right thing

! Customers Always come first

! Commitment In all things

! Communication Seek first to understand

! Creativity Ideas before results

! Teamwork Together everyone achieves more

! Trust Starts with honesty

! Success Results through people

Of these, Gary Keller believed that the first and the last were the most important:

Really it became the .win-win philosophy. because that was the first one. and it

became known for the last S, which is .success through others, not around them..

And I really believe that when you talk to people about WI4C2TS that even

though there are some who can recant all of it, what almost everyone remembers

is the first and the last. When you go to make decisions, and you go to succeed,

that you literally include everyone that you can in the decision-making process

and ensure that everyone gets a success through it. And so for me, .win-win.

and .succeeding through others. were like book ends to a philosophy that has

built this incredible culture.13

Mark Willis, president and CEO, agreed that the company.s belief system was integral to the

growth of Keller Williams and used the .independent-relationship model. of RE/MAX as a point

of contrast. Specifically, he disagreed with RE/MAX President David Liniger.s assertion that

brokers were in the real estate agent business, with agents as the customer of the broker:

The agent is not your customer. The agent is your partner. And you have got to

treat them like your partner. If you want a doomed relationship, go into a

customer relationship and overcharge them or give them less than what they can

get some place else and you will be the problem. But the language of partners is

that we are in this together, we.re going to own problems together, we.re going to

solve them together, we.re going to work in a win-win solution where you are

going to get the most out of a relationship and I get the most out of a relationship,

and it.s a higher level relationship. Partners won.t leave you. They won.t hold a

gun to your head, but customers will.14

In order for an agent to feel like a stakeholder and partner of the company, Willis believed that

the company had to maintain four practices. First, the company had to share its profits. Second,

the company had to involve agents in the decision making. Third, the company had to open its

financial books. And fourth, the company had to train its agents to be better agents and business

people. Together, these practices created a culture of interdependent relationships that allowed

team members to reach a high and satisfying level of success.

13 Ibid, op. cit.

14 Interview with Mark Willis, president and CEO, Keller Williams Realty, November 8, 2006.

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p. 12
Organizational Structure and Policies as Manifestation of Culture

The leaders of Keller Williams believed that the structure of the company grew out of its culture

and that the company.s systems, policies and practices were a product of the WI4C2TS belief

system. Also, they believed that the economies of scale and high profitability of their market

centers were the direct result of the culture and organizational practices, and that market centers

that failed to achieve high levels of profitability failed because they did not successfully

implement the culture and practices.

Structure of the Market Center

The market center was owned by an operating principal (OP) who was then responsible for

hiring a team leader to lead the market center. It was important that these two roles be separated

and that the OP not also serve as the team leader. Gary Keller believed that in order for the team

leader to improve the market center over time and help it achieve its full potential, an outside

person should hold him or her accountable for results. In addition, a successful team leader

required a unique personality set that was different from that of an OP, because of the

responsibilities required by the position.

Before being hired as the team leader for a new market center, the candidates for the position had

to take a personality test designed for Keller Williams by a third-party consulting company. The

model evaluated individuals according to four personality attributes and each job function had its

own optimum mix. The ideal profile of a team leader was:

! Drive: The team leader was expected to have high drive in that s/he was resultsoriented,

decisive, demanding, and direct. A person with low drive would be

described as process-oriented, cautious and conservative.

! Sociability: The team leader was expected to be highly sociable. Sociability should be a

natural quality and not something that required a lot of effort or psychological

energy to maintain.

! Calmness: The team leader should not score high on this factor but instead should be

impatient, constantly changing, and fast-paced.

! Conformity: The team leader should also not score high on this factor but instead should be

self-reliant, free in his or her actions, opinionated, and individualistic. S/he

should not be a perfectionist, overly precise, detail-oriented or require direction.

A unique personality profile was designed for all positions within Keller Williams, including the

CEO, and all candidates hired into the company were expected to take the test in a process called

Recruit Select. Candidates who did not have matching personality profiles were encouraged to

apply to more appropriate positions.

The first responsibility of the team leader in launching a new market center was to recruit a core

group of five top-performing agents from other companies in the local area. It was important

that the team leader recruit a core group of agents who were influential in their market, because

these agents would be responsible for recruiting additional agents during the launch period.

Successful agents who were respected in the local market but did not have influence would not

be effective recruiters. Because a market center did not begin to break even in profitability until

it reached 40 agents, it was important that the size of the team scale quickly. Both the team

Keller Williams Realty HR-29

p. 13

leader and the core group had to be in place before the franchise agreement for a new market

center was approved by the international office.

Because the role of team leader was filled by someone other than the owner, the team leader built

his or her income primarily through profit share by recruiting agents, particularly cappers. A

team leader who was able to recruit an influential core group that in turn recruited several more

agents to the market center would quickly build his or her income through profit share. Because

the profit share formula gave credit for individuals recruited up to seven degrees of separation

away, the team leader received a share of the profits for all of the agents recruited to the market

center. The economies of scale implicit in the fixed-cost market center meant that the team

leader and core group had every incentive to build the agent count quickly (see Exhibit 7 for

information on the companies from which Keller Williams attracted its most successful agents).

Agent Leadership Council

The management of the market center was not the sole responsibility of the team leader, nor was

it the joint responsibility of the OP and the team leader. The leaders of Keller Williams believed

that agents had an equal stake in the success of the market center and therefore should share in

the decision-making process. As a result, management of the market center was a shared

responsibility of the OP, the team leader, and the top agents within the market center who all

jointly served on what was called the Agent Leadership Council (ALC). Subcommittees of the

ALC made recommendations on specialized issues such as financial planning, recruiting and

retention, marketing and advertising, training, technology, social events, and philanthropic

giving. The ALC structure ensured that each market center was run as a true partnership.

The leaders of Keller Williams believed that having an ALC management structure

accomplished several goals. First, because the top 20 percent of agents in a market center

(measured by gross commission income) were invited to sit on the ALC, the committee was

comprised of the agents with the most knowledge of the local market. These individuals would

be able to make better decisions affecting the success of the business. Second, and closely

related, management decisions that were made by top agents instead of an owner would have

better validity throughout the market center, particularly with agents. Decisions would be

recognized as having gone through a negotiation and buy-in process and were less likely to be

perceived as .cram downs.. Third, by participating in management decisions, agents would

learn a business mentality with special attention to cost control. When agents were asked to

approve fixed costs and pay for them by effectively reducing their own profit share, they had

more incentive to be cost-conscious. Finally, the ALC structure led to better retention of topperforming

agents who felt they were truly managing their business.

Willis explained how the ALC structure and shared decision making led to a greater sense of

partnership:

What we do is we empower our people to make decisions that they literally own

and are accountable for, because they have been given a voice. They.ve been

treated like partners and they.ve been respected.. If I define your win for you,

and I tell you how we are going to win on some level you are going to resent me.

Whereas on the other hand, if you get to define your win, and I help you get that

Keller Williams Realty HR-29

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win, then you.re going to feel good. You.re going to feel like you.re contributing

and that somebody has given you what you want.15

In Keller Williams, there was an ALC not only at the local level, but also at the city, regional,

and international office levels. Agents who served on these higher-level ALCs were greatly

respected throughout the company.

Open Books

In order for the profit share and ALC decision-making systems to maintain their integrity, Keller

Williams operated an open book policy in each market center. All agents had access to view the

expenses and revenues of the market center. Because the profit share formula did not change,

agents could run the calculations themselves to make sure they were receiving their proper share.

Although books were not officially open across the company, an individual who recruited an

agent to another market center could have access to that market center.s books on a one-off

basis, if requested. In addition, the minutes of ALC meetings were available for agents to

review, which meant that there were no secrets between the leaders of the market center and the

agents. For example, in the event that the team leader made a special arrangement in recruiting a

top agent into the office, the details of that deal were decided by the ALC and became public

information throughout the market center.

Training

The leaders of Keller Williams believed that if individuals were expected to play a significant

role in the decision making and management of the company and their careers, then the company

had an obligation to provide the training needed for them to achieve their full potential. Training

was such a key element of the company culture that Dave Jenks, vice president of research and

development, referred to Keller Williams as .a training and consulting company masquerading

as a real estate company.. He went on to describe Keller Williams as .the most training-oriented

company in the industry..16 The company used extensive training to turn real estate jobs and

real estate office management into a business. Examples of training events and seminars

included:

! Camp 4-4-3: Training for all agents to achieve 80th percentile industry

productivity.

! Millionaire Real Estate Agent: Training for Keller Williams and non-Keller Williams

agents based on techniques published in the book with the

same title.17 It was also an effective recruiting tool for the

company.

! Mega Agent Camp: Training for top-producing agents (GCI greater than

$180,000) designed to take their productivity to the next

level.

! Mega Management Camp: Training for OPs and team leaders focused on leadership

and management issues.

15 Ibid, op. cit.

16 Interview with Dave Jenks, vice president of research and development, Keller Williams, November 8, 2006.

17 Keller, Gary, Dave Jenks and Jay Papasan, The Millionaire Real Estate Agent, (New York: Rellek Publishing

Partners, McGraw Hill, 2004).

Keller Williams Realty HR-29

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! Masterminds: Group seminars and break-out sessions for OPs, team

leaders, and agents, led by Keller Williams leadership.

! Family Reunion: Combination of educational, inspirational, and fun

activities for all Keller Williams team members.

The leaders of Keller Williams believed that education was an ongoing process within the

company. In addition to real estate and management techniques, the company also taught lifeimproving

perspectives that the company thought led to improved performance. According to

David Osborn, vice president of CORE Services:

Education in our company is massive, focused, and ongoing. People think you

get out of college and education ends but in reality the education just begins. It.s

not so much education focused on how to sell another deal, and we do plenty of

that, but it.s life mastery. How do you think correctly to succeed? We teach that

all the time. Now if only 5 percent of our people get that, they will permeate the

entire organization. You need a few people in the office to get that and they will

set the standard for everyone.18

(See Exhibit 8 for an example of life perspectives taught by the company.)

BE THE BEST THAT YOU CAN BE

The leaders of Keller Williams believed that business should be infused with a higher purpose,

and the company.s culture encouraged team members to commit to a lifestyle of self-mastery

that would improve both business and life skills. People within Keller Williams spoke of the

company.s .productivity warrior attitude. about increasing efficiency and profitability. They

spoke of a desire to .absolutely develop wealth and then share it. through charitable activities.

According to Mo Anderson, .The energy this culture creates feeds the bottom line..19

Although the company was very selective in terms of the individuals to whom it awarded

franchises, almost any aspiring real estate agent could be hired. Over time, these agents were

expected to prove themselves, and those that did not reach minimum levels of productivity and

contribute to the bottom line were asked to leave. As a result, agent turnover could be high.

Dave Osborn cautioned: .Judge us by who we keep, not who we hire.. Part of that assessment

was sales productivity, with the specific criteria decided by each market center. Just as

importantly, however, agents were expected to buy in to the culture, policies, and processes of

the company; those that did not often self-selected out of the company.

Also, agents were expected to adhere to a basic level of moral conduct, and part of the

independent contractor agreement that each agent signed granted Keller Williams the right to fire

the agent for .moral turpitude.⎯grossly inappropriate behavior that harmed other team

members, external partners, or customers. In addition, agents were asked to leave if their

conduct undermined the integrity of the company or its processes, such as using a position of

influence to try to claim credit for recruiting agents who had actually been recruited by another

18 Interview with David Osborn, vice president of CORE Services, Keller Williams Realty, November 8, 2006.

19 Interview with Mo Anderson, November 8, 2006.

Keller Williams Realty HR-29

p. 16

person (in order to redirect profit share to themselves). Keller Williams was unique in the

industry, however, in that all terminated agents were given the rights to the homes they had listed

in MLS; by law, listing rights were held by the brokerage, and other companies in the industry

insisted on retaining the listings of a terminated employee.

Once an agent did achieve high levels of profitability, s/he was expected to be an engaged

contributor to the community. The company did not mandate contributions, but implicit in the

.win-win. belief system was the notion that the more an individual gave, the more s/he would

receive, and the boundaries of this behavior extended beyond the company to the community.

The leaders of the company were active philanthropists through a foundation they established out

of their own income called KW Cares, a 501(c)3, which provided emergency financial assistance

to any member of Keller Williams in need because of tragedy or illness. For example, after

Hurricane Katrina, KW Cares raised $5.3 million dollars from Keller Williams offices

nationwide to support more than 700 Keller Williams team members who were displaced by the

catastrophe. By comparison, the National Association of REALTORS® with more than 1.2

million members raised $5.8 million.

Keller Williams agents were encouraged to give 10 percent of their income to the charity or

community organization of their choice and to make giving a part of their lifestyle. According to

Mo Anderson:

I want people to experience the higher purpose of business. In my humble belief,

the higher purpose of business is to absolutely develop wealth, become wealthy,

and then share that wealth with the charities that you are passionate about, with

the religious organization you are passionate about, the poor, or whatever it is that

moves your heart. I encourage our people that if you have wealth, and you.re not

sharing it, you.re going to miss out on one of life.s great learnings .. There.s no

joy in life like being able to step up to the plate and help somebody in need.20

Looking Forward

The leaders of Keller Williams believed that they had a competitive model that was superior to

that of every other major company in their industry. The successful application of this model led

to exponential growth in market centers, agent count, and company profits. The company

expected to end the year 2006 with over 75,000 agents. Looking forward, they expected to have

over 150,000 agents by 2010 and 300,000 agents by 2015. .At that time,. said Mark Willis,

.any agent who is not with Keller Williams probably shouldn.t be..

No single policy or practice accounted for the company.s financial success. It was the unique

way in which the company.s economic model, compensation model, culture, and company

practices worked together to achieve results. According to Mark Willis:

Keller Williams is not different because we profit share. We aren.t different as a

company because we educate. We aren.t different because we open the books.

We aren.t different because we have an ALC and give agents a voice in the

20 Ibid, op. cit.

Keller Williams Realty HR-29

p. 17

decision making. We are different because we succeed through others. We are

all about succeeding and achieving results through other people.21

Expanding into New Territories

As Willis thought about the expansion plans he discussed with Anderson and Keller, he knew

that it was critical that the company find OPs who would take both the systems and the culture

with them into their territories. He and his regional managers would have to review very

carefully the applications they received requesting franchise rights for new territories to ensure

that the applicants understood both the economics and the vision of the company.

QUESTIONS

1. Explain the way in which the company.s economic model, compensation model, culture and

company practices work together.

a. What role does the Agent Leadership Council play from both a management

perspective and a cultural perspective? Is it necessary for Keller Williams to have an

ALC?

2. In general, how important is the compensation system to Keller Williams?

a. What is the potential payout curve for commission splits for a Keller Williams agent

versus an agent at a traditional real estate company?

b. What is the potential payout from profit sharing for a Keller Williams agent?

c. What behaviors do you believe are encouraged by the Keller Williams compensation

structure?

d. How important is the company policy of maintaining open books?

e. Does Keller Williams have a competitive advantage because of its culture? Could a

competitor successfully compete against Keller Williams by adopting its economic

models but without adopting its culture?

3. Assume Keller Williams were planning to add a new market center in the Laguna Niguel, CA

area and you were applying for the franchise rights to that territory (see Exhibit 9 for market

data on Laguna Niguel).

a. How many agents would you plan to recruit before launch and how many would you

expect to have by the end of 18 months?

b. From which companies would you expect to successfully recruit these agents?

c. How would the recruitment of a core group help you to achieve your 18-month

recruitment goals?

d. What sales productivity (gross commission income) would you expect your agents to

have achieved by the 18th month?

21 Mark Willis, speech at Keller Williams Launch Boot Camp, November 9, 2006.

Keller Williams Realty HR-29

p. 18

e. What is the expected profitability of your market center after 18 months and how is it

dependent upon the number of agents? Their productivity?

f. How does the profitability of your market center after 18 months compare to that of

your competitors?

Keller Williams Realty HR-29

p. 19
Exhibit 1

Keller Williams: Growth Statistics (1996 . 2006)

Source: Keller Williams Realty.

KW Agent Count

20,000

40,000

60,000

80,000

# of Agents

KW Market Center Count

250

500

750

96 97 98 99 00 01 02 03 04 05 06

# of Market Centers

KW Commissions

500

1,000

1,500

2,000

2,500

96 97 98 99 00 01 02 03 04 05

$ in millions

Keller Williams Realty HR-29

p. 20
Exhibit 2

Keller Williams vs. Industry Competitors: Productivity Statistics

Agents per office Volume per office ($ in millions)

2002 2003 2004 2005 2002 2003 2004 2005

National average 47.1 45.2 47.2 49.1 113.5 125.8 140.3 154.7

Century 21 37.8 37.9 37.2 36.1 74.6 78.7 88.7 93.6

Coldwell Banker 42.3 35.8 34.6 50.1 124.6 87.3 94.9 172.5

ERA 34.0 24.6 24.7 28.2 89.9 56.8 61.7 68.4

GMAC 33.8 35.7 37.6 45.6 89.9 92.3 105.2 129.7

Keller Williams 116.0 163.1 138.1 174.1 155.6 214.9 194.5 367.1

Prudential 38.2 41.6 43.5 44.4 89.2 100.8 117.0 120.9

Realty Executives 32.1 39.7 43.2 41.6 108.9 132.1 153.2 162.7

RE/MAX 44.1 42.5 42.3 45.3 172.7 182.1 190.0 212.6

Independents 39.6 45.0 45.3 46.8 107.5 118.4 126.6 133.0

Sides per office* Sides per agent*

2002 2003 2004 2005 2002 2003 2004 2005

National average 493 508 508 504 11.9 11.2 10.8 10.2

Century 21 424 424 414 377 11.2 11.2 11.1 10.3

Coldwell Banker 491 495 481 468 10.4 13.7 13.9 9.3

ERA 455 343 346 372 13.4 14.0 15.1 13.2

GMAC 347 337 335 338 10.3 9.5 8.9 7.4

Keller Williams 885 1252 929 1653 7.6 7.7 6.7 9.5

Prudential 383 397 392 364 10.0 9.5 8.9 8.2

Realty Executives 606 622 643 586 18.9 15.7 16.1 14.1

RE/MAX 861 776 761 745 19.6 18.3 18.0 16.1

Independents 462 486 465 475 11.7 10.8 10.3 10.1

* The term .sides. refers to transactions done by either the selling agent or the buying agent. Because there are

usually two agents on each real estate transaction, the industry reports approximately twice as many sides as home

transactions.

Source: Real Trends 500 Survey.

Keller Williams Realty HR-29

p. 21
Exhibit 3

Keller Williams vs. Industry Competitors: Commission Splits

1. Century 21 . Starts at 50 / 50 split with 8 percent off the top (6 percent royalty, 2 percent advertising fee).

At $25,000, GCI split 55 / 45

At $50,000, GCI split 65 / 35

At $75,000, GCI split 70 / 30

At $100,000, GCI split 75 / 25

2. RE/MAX . Charges $2,000 per month desk fee.

3. Keller Williams . 70 / 30 split. 6 percent royalty, capped at $3,000. Company dollar capped at $30,000.

Volume GCI Century 21 RE/MAX Keller Williams

Agent Dollars

$ 1 M $ 30,000 $ 14,030 $ 6,000 $ 19,200

$ 2 M $ 60,000 $ 30,130 $ 36,000 $ 39,000

$ 3 M $ 90,000 $ 48,760 $ 66,000 $ 60,000

$ 5 M $ 150,000 $ 89,700 $ 126,000 $ 117,000

$ 10 M $ 300,000 $ 193,200 $ 276,000 $ 267,000

Company Dollar

$ 1 M $ 30,000 $ 13,570 $ 24,000 $ 9,000

$ 2 M $ 60,000 $ 25,070 $ 24,000 $ 18,000

$ 3 M $ 90,000 $ 34,040 $ 24,000 $ 27,000

$ 5 M $ 150,000 $ 48,300 $ 24,000 $ 30,000

$ 10 M $ 300,000 $ 82,800 $ 24,000 $ 30,000

Franchise Royalty

$ 1 M $ 30,000 $ 2,400 0 $ 1,800

$ 2 M $ 60,000 $ 4,800 0 $ 3,000

$ 3 M $ 90,000 $ 7,200 0 $ 3,000

$ 5 M $ 150,000 $ 12,000 0 $ 3,000

$ 10 M $ 300,000 $ 24,000 0 $ 3,000

Commission splits, caps, and royalty rates are indicative only and vary by office.

Source: Keller Williams Realty.

Keller Williams Realty HR-29

p. 22
Exhibit 4

Keller Williams: Profit Share Formula, Sample

1. Calculation of Market Center Profit

Gross Commission Income (GCI) $ 150,000

(-) 70% Agent Split 105,000

(=) Company Dollar $ 45,000

(-) KW Approved Costs 22,500

(=) KW Market Center Profit (or Loss) $ 22,500

2. Creation of Monthly Profit Share Pool

Profit Share Pool Owner Profit

Level 1 (first $2,990) 25% $ 747.50 75% $ 2,242.50

Level 2 (next $8,250) 35% $ 2,887.50 65% $ 5,362.50

Level 3 (above $11,240) 50% $ 5,630.00 50% $ 5,630.00

$ 9,265.00 $ 13,235.00

3. Contribution to Profit Share by Agent

Agent

Company $ Total

Company $ % of

Profit Share

John contributed $ 3,886 out of total $ 45,000 equals 8.64 %

Total Profit

Share Pool Contribution to

Profit Share

That 8.64 % times $ 9,265 equals $ 800

4. Distribution of Profit Share to Agent.s Upline (KW Team Members Who Recruited the Agent)

1st Level Sponsor Mary gets 50 % $ 400

2nd Level Sponsor Tom gets 10 % $ 80

3rd Level Sponsor Joe gets 5 % $ 40

4th Level Sponsor Nancy gets 5 % $ 40

5th Level Sponsor Jane gets 7.5 % $ 60

6th Level Sponsor Mike gets 10 % $ 80

7th Level Sponsor Carol gets 12.5 % $ 100

100 % $ 800

Source: Keller Williams Realty.

Keller Williams Realty HR-29

p. 23
Exhibit 5

Keller Williams: Historical Growth in Profit Share

Source: Keller Williams Realty.

KW Profit Share

96 97 98 99 00 01 02 03 04 05

$ in million

Keller Williams Realty HR-29

p. 24
Exhibit 6

Keller Williams vs. Industry Competitors: Big Picture Economic Model

Source: Keller Williams Realty. Based on 2005 performance of top 25 percent Keller Williams market centers

versus top 500 real estate companies as reported by Real Trends (October 2005). Estimate of royalties for

top 500 real estate companies for those national companies that charge 6 percent on all GCI (may vary

from office to office and company to company).

Distribution of Gross Commission Income

Agent Commission,

81.9

Agent Commission,

65.8

Royalties, 2.8

Royalties, 6

Expenses, 6.8

Expenses, 20.4

Profit Share, 3.1

Owner Profit, 5.4 Owner Profit, 7.8

50%

100%

Keller Williams Top U.S. Companies

Keller Williams Realty HR-29

p. 25
Exhibit 7

Keller Williams: Recruitment of Mega Agents

The Companies Mega Agents Were with Prior to Joining Keller Williams

Rank Company Keller Williams

1 RE/MAX 34%

2 Coldwell Banker 17%

3 Century 21 9%

4 Prudential 7%

5 Realty Executives 2%

6 Crye-Leike 1%

7 Ebby Haliday 1%

8 ERA 1%

9 GMAC 1%

10 Home Services of America 1%

11 Long & Foster 1%

Source: Keller Williams Realty, based on survey of top producing agents only (median

volume $13.0 million and median gross commission income $329,000 at previous

agency).

Keller Williams Realty HR-29

p. 26
Exhibit 8

Keller Williams: Life Perspectives

Personal Perspective, Overview

Source: Keller Williams Realty.

Step 5: Remove .Limiting Beliefs. .I will be positive.

Avoid limiting thinking and focus on unlimited

thinking

Step 6: Be Accountable .You can count on me.

Acknowledge reality, own it, find solutions and get on

with it. Don.t be a victim, seek blame, wait and hope.

Step 3: .I want to break through

my ceiling and commit

to models and systems.

Move from .E. to .P.

.Entrepreneurial style. does what comes naturally

.Purposeful style. uses models and systems

Step 4: .I.m willing to be taught

and to pursue learning.

Commit to Being .Learning Based.

Effective learning as the foundation of the action plan

to develop one.s life; work smarter not harder

Step 1: Commit to .Self-Mastery. .I.m going to nail it!.

Possession of great techniques, skill and habits that

makes one master of a subject

Step 2: .I want to change the

predictable imbalance of

my wealth.

Commit to the 80 / 20 Rule

20 percent of the effort often leads to 80 percent of the

results

Keller Williams Realty HR-29

p. 27
Exhibit 8 (continued)

Keller Williams: Life Perspectives

Self-Mastery: How a learning-based individual becomes a black belt in life

Source: Keller Williams Realty.

What You Do What You Experience What You Become

10. Move into

Self Mastery

4. Personal Power

.It.s part of me.

Life Habits

5. Moves you into

Unconscious

Competence

7. Role Play

8. Experience Structured

Activities

9. Practice

3. Wisdom

.I can & will do it.

Behaviorally

4. Moves you into

High-Level Conscious

Competence

4. Participate

5. Analyze Case Studies

6. Analyze Role Models

2. Knowledge

.I relate to it.

Emotionally

3. Moves you into

Conscious

Competence

2. Moves you into

Conscious

Incompetence

1. Understanding

.I get it.

Mentally

1. Read

2. Lecture

3. Discuss

1. Life of ignorance is

Unconscious

Incompetence

The 10 Step Experiential

Learning Process (Training)

The 5 Steps to

Unconscious Competence

The 4 Steps to

Personal Power
Keller Williams Realty HR-29

p. 28
Exhibit 9

Competitive Market Data: Laguna Niguel, CA (Hypothetical)

1. Territory Profile

Estimated current population 61,891

Projected population in five years 61,813

2. MLS Information

# of Transactions Sales Volume

Five years ago 1,761 $ 507.5 M

Three years ago 1,841 $ 648.8 M

Last year 1,366 $ 569.5 M

3. Competitive Real Estate Brokerages

Company

Name

Total

Offices

Total

Agents

Century 21 9 263

First Team 4 200

RE/MAX 4 228

Prudential 3 78

Coldwell Banker 3 147

4. Market Center / Real Estate Brokerage Budget

Operating Expense Monthly

Rent $ 3,000

Salaries (administrative) 12,000

Other 5,000

Base budget $ 20,000

Costs associated with first $1M GCI 2,500

Base budget up to $1M GCI $ 22,500

Incremental budget, each additional $ 1M GCI $ 2,500

Goals and why!!

Charles Brown (Counts Real Estate Group) — Tue, 23 Oct 2007 07:34:25 -0700

Creating S.M.A.R.T. Goals

                                                                                        Specific
                                                                                     Measurable
                                                                 Attainable
                                                                 Realistic
                                                                 Timely

Specific - A specific goal has a much greater chance of being accomplished than a general goal. To set a specific goal you must answer the six "W" questions:

*Who:      Who is involved?
*What:     What do I want to accomplish?
*Where:    Identify a location.
*When:     Establish a time frame.
*Which:    Identify requirements and constraints.
*Why:      Specific reasons, purpose or benefits of accomplishing the goal.

EXAMPLE: A general goal would be, "Get in shape." But a specific goal would say, "Join a health club and workout 3 days a week."

Measurable - Establish concrete criteria for measuring progress toward the attainment of each goal you set. When you measure your progress, you stay on track, reach your target dates, and experience the exhilaration of achievement that spurs you on to continued effort required to reach your goal.

To determine if your goal is measurable, ask questions such as......How much? How many? How will I know when it is accomplished?

Attainable - When you identify goals that are most important to you, you begin to figure out ways you can make them come true. You develop the attitudes, abilities, skills, and financial capacity to reach them. You begin seeing previously overlooked opportunities to bring yourself closer to the achievement of your goals.

You can attain most any goal you set when you plan your steps wisely and establish a time frame that allows you to carry out those steps. Goals that may have seemed far away and out of reach eventually move closer and become attainable, not because your goals shrink, but because you grow and expand to match them. When you list your goals you build your self-image. You see yourself as worthy of these goals, and develop the traits and personality that allow you to possess them.

Realistic - To be realistic, a goal must represent an objective toward which you are both willing and able to work. A goal can be both high and realistic; you are the only one who can decide just how high your goal should be. But be sure that every goal represents substantial progress. A high goal is frequently easier to reach than a low one because a low goal exerts low motivational force. Some of the hardest jobs you ever accomplished actually seem easy simply because they were a labor of love.

Your goal is probably realistic if you truly believe that it can be accomplished. Additional ways to know if your goal is realistic is to determine if you have accomplished anything similar in the past or ask yourself what conditions would have to exist to accomplish this goal.

Timely - A goal should be grounded within a time frame. With no time frame tied to it there's no sense of urgency. If you want to lose 10 lbs, when do you want to lose it by? "Someday" won't work. But if you anchor it within a timeframe, "by May 1st", then you've set your unconscious mind into motion to begin working on the goal.

T can also stand for Tangible - A goal is tangible when you can experience it with one of the senses, that is, taste, touch, smell, sight or hearing. When your goal is tangible you have a better chance of making it specific and measurable and thus attainable.

Mindset in today's market.

Charles Brown (Counts Real Estate Group) — Mon, 22 Oct 2007 16:21:06 -0700

As the person who provides the training and consulting to Real Estate associates in Panama City. It puzzles me how and why associates think the way they do. I train all the time on limiting beliefs, that come from our childhood and the way we were raised. This industry is there for the taking in any town during this market. A slow market is the only time you can grow your business expediently. Systems and models are the key. Rather you like it or not that is the only thing that drives your business. Systems and models that are designed so that you wait until someone calls you are not going to work in this market. It is time to get PROACTIVE not reactive, go out get some business. Prospect, Prospect, Prospect it is a very difficult time to buy your business today. Associates are not sure what their rate of returns are on investments (marketing, Internet, etc.) Your return should be 10 to 1. if you are properly prospecting and marketing. As associates we spend 80% of our time and money on people we have not meet yet or people we don't know if we want to be in business with them to start. Focus, Focus, there is one great thing you get to choice who you are in business with. That starts with you Brokerage and you clients. Work with those who are going to give you the best possibility of getting into the business. Example; if you start with the yellow pages. You will get to accountants, I wonder how many accountants know if there clients have homes the need to sell or money to invest. You don't need all of their referrals you need 3 to 5 and the key is return leads to him or her. I pretty sure you may have some clients who tax advice now that they have sold or purchased a new home. Now continue with the yellow pages, who next attorneys. What about divorce attorneys? These are just a few examples that are out there. Don't sit there --prospect, prospect, prospect.

Is it Time to have a Fierce Conversation with Yourself

Charles Brown (Counts Real Estate Group) — Mon, 08 Oct 2007 17:15:53 -0700

The Seven Principles Of Fierce Conversations

By Susan Scott

Principle 1: Master the courage to interrogate reality.

No plan survives it's collision with reality, and reality has a habit of shifting, at work and at home. Markets and economies change, requiring shifts in reality. People change and forget to tell each other - colleagues, customers, spouses, and friends. We are all changing all the time. Not only do we neglect to share this with others, we are skilled at masking it even to ourselves.

Principle 2: Come out from behind yourself into the conversation and make it real.

While many fear "real", it is the unreal conversation that should scare us to death. Unreal conversations are expensive, for the individual and the organization. No one has to change, but everyone has to have the conversation. When the conversation is real, the change occurs before the conversation is over. You will accomplish your goals in large part by making every conversation you have as real as possible.

Principle 3: Be here, prepared to be nowhere else.

Our work, our relationships, and our lives succeed or fail one conversation at a time. While no single conversation is guaranteed to transform a company, a relationship, or a life, any single conversation can. Speak and listen as if this is the most important conversation you will ever have with this person. It could be. Participate as if it matters. It does.

Principle 4: Tackle your toughest challenge today.

Burnout doesn't occur because we're solving problems; it occurs because we've been trying to solve the same problem over and over. The problem named is the problem solved. Identify and then confront the real obstacles in your path. What you tolerate you get. Stay current with the people important to your success and happiness. Travel light, agenda-free.

Principle 5: Obey your instincts.

Don't trust your instincts - obey them. Your radar screen works perfectly. It's the operator who is in question. An intelligence agent is sending your messages every day, all day. Tune in. Pay attention. Share these thoughts with others. What we label as illusion is the scent of something real coming close.

Principle 6: Take responsibility for your emotional wake.

For a leader, there is no trivial comment. Something you don't remember saying may have a devastating impact on someone who looked to you for guidance and approval. The conversation is not about the relationship; the conversation is the relationship. Learning to deliver the message without the load allows you to speak with clarity, conviction, and compassion.

Principle 7: Let silence do the heavy lifting.

When there is simply a whole lot of talking going on, conversation can be so empty of meaning they cackle. Memorable conversations include breathing space. Slow down the conversation, so that insight can occur in the space between words and you can discover what the conversation really wants and needs to be about.

Questions for Your Real Estate Business

Charles Brown (Counts Real Estate Group) — Mon, 08 Oct 2007 08:50:26 -0700

1. Are you holding yourself to the highest standards or are you accepting average standards?

2. What is the biggest challenge to achieving the goals/standards in your buisness?

3. What is the best way to bridge the gap in where you are and where you want to be?

4. What do you think you should do to bridge that Gap?

5. What are your performance strengths?

6. Where are there opportunities for performance improvements.

7. What models or systems do you need to implement to achieve your goals?

8. Have you researched other Companies and what they may be able to do to assist you in reaching your goals?

9. What do you think the possibilities of your business are?

10. What are you going to do differently to increase your attainment of this goal?

11. What is necessary to move forward?

12. How much time do you need to achieve your goals?

These are a few of the questions that you should be asking yourself about your business. Real Estate is an profession and needs to be treated as such. Those who achieve at a high level treat it as such. We all need to take a look at the man or woman in the mirror and decide where we are going, when will we get there and how is going to look. Think Big, Aim High!

Buyers and Sellers - Where are they?

Charles Brown (Counts Real Estate Group) — Sun, 07 Oct 2007 09:50:12 -0700

Recently, I have heard this from what we have called in the past experience associates. As this market has exposed those associates weaknesses. What are they going to do. Most of them are doing nothing, they are in a wait and see mode. The definition of Insanity is Doing the same thing over and over but looking for different results. Sounds familiar, it time that we has REALTORS change or mindset. Homes are being sold and bought everyday in every market. It's just our job to get in the game. In Bay County the number of homes selling is on pace with years in the past. Now, there maybe 5 times the number of listings but there is only a certain number of homes that will ever sell in one year. Those that are selling are the ones that are priced correctly. No matter if its new constructions or resales, they will sell. We need to focus on those sellers who want to sell at today prices not 2004, 2005 or 2006. Be truthful and work with only those who want to be realist.

Don't worry about the market, because you can not change it. So you need to work in it and take advantage of it.

Educate Yourself

Http://www.kwsuccessrealty.com

Do you want to feel better about the market?

Charles Brown (Counts Real Estate Group) — Wed, 03 Oct 2007 10:38:34 -0700

It occurred to me the other day. That the market is the market and it really should not be given the the dominant position that REALTORS are giving it. People sell and buy homes no matter what the market is. People move, jobs are lost and again, Families are growing and people are downsizing. That's the fact, Jack. As the market has change, we ourselves have not. THIS MARKET EXPOSED OUR WEAKNESSES IN OUR BUSINESSES. OUR SKILLS MOST IMPROVE AND BE TOP NOTCH. As the challenges increase our disciplines must be elevated to meet our clients demands.

Take a long hard look at you mindset. There are buyers and sellers out there, go get them. Realize that you are powerful. Communicate the truth-Communicate with passion-If you don't have passion then you can not give it away.

To borrow a title of a book-Change Your Thought- Change Your Life, thats how you change your business and your market.

Is Your Broker Cutting Benefits from the Office in this Market?

Charles Brown (Counts Real Estate Group) — Tue, 02 Oct 2007 15:59:52 -0700

Speaking to numerous agents this past week, there is a growing trend that there Brokers are cutting the benefits in the office or eliminating them all together. One prefect example is the weekend Front Desk person. Recently, we had an example where a client was looking to list some properties, 4 to be exact. When the client was asked why he was calling Keller Williams, he said he had called 2 other national companies and all he got were answering machines. I wonder if those agents in the other companies will ever know how much business they are truly missing out on. Things like floor duty, not sign/add/call protected who know how much business is being missed.

This Market is when you can grow your business by leaps and bound. It is not time to retreat. Tell me when is the last time someone sat down with you and really help you with your buisness.

Real Estate Market is always there. Houses sell in every type of Market

Charles Brown (Counts Real Estate Group) — Tue, 02 Oct 2007 11:17:31 -0700

TOP STORY: Gary Keller: The only market that matters is yours!

Last week on the Today Show, during a segment on the national real estate market, CNBC's Jim Kramer uncompromisingly stated, "now is the absolute worst time to buy!"

Concerned that remarks such as these from so-called experts might be pushing potential buyers to the sidelines?

Here's what Gary Keller, co-founder and chairman of Keller Williams Realty has to say about waiting out the current market:

First, residential real estate is not a national market product - it is a local one. To say from a national position that this is either a good time or a bad time to buy real estate is like saying the national forecast for the U.S. today is 92 degrees - it is a useless and irrelevant perspective. What is happening in your local market is all that matters.

Second, trying to predict when it is a good time to buy, or not, means you're trying to time the market. Staying on the sidelines is the surest way for most people to never time anything correctly.

Last, and maybe most important - there are always two markets in every market. There is the market of properties that are good buys and there is the market of properties that are not a good buys. Interestingly enough, this is true in either buyer or seller markets. To categorically say that this is the time to buy or not is absolutely ignoring the fact that every market really has two markets inside it.

Wealthbuilding throught Real Estate

Charles Brown (Counts Real Estate Group) — Mon, 01 Oct 2007 11:40:42 -0700

If opportunity is knocking (on a door that may need replacing) - you better answer it, or someone else will.

FIND a promising house
ANALYZE the profit potential

Based on the New York Times best seller Flip: How to Find, Fix, and Sell Houses for Profit, this seminar will take your real estate skills to the next level and turn you into a profit-spinning real estate investor.

In our one-day, interactive FLIP seminar you'll learn to:

Target houses with real profit potential.
Separate suspects from prospects and make smart offers.
Determine what improvements are your best investments and how much they'll cost.
Tap into the skills you already have to make a lucrative and rewarding investment! If you're a real estate agent, you're already one up on the competition!

Gene Rivers has been there, done that. He started his real estate business in Tallahassee, Fla. in 1993 and has been investing since 1995. With more than $700,000 currently invested in rehab properties, Rivers knows the stakes. He has the insight and knowledge to guide both first-time and experienced investors through a successful flip. He currently owns more than $10 million in investment properties, more than 20 lots and two multimillion dollar development parcels.

Click here to get a sneak peek of FLIP co-author Rick Villani in action!

Click here to see what attendees are saying about
Our Best Flipping Seminar Ever!

July 27th - Houston, TX Sold Out!

September 20th - Seattle, WA Sold Out!

October 10th - Toronto, Canada Register Now!

October 22nd - Lakeland, FL Register Now!

December 6th - Panama City, FL Register Now!

Platinum Sponsors

Please note that all cities and dates above are tentative and subject to change without notice.

Wealth Building for Real Estate Agents

Charles Brown (Counts Real Estate Group) — Sun, 30 Sep 2007 19:57:25 -0700

Research says that only 10% of todays Real Estate Agents are investing in Real Estate. As a industry we let those who do the work down as the leaders of the industry. We don't take the time to train our others to invest as we invest daily. Passive Income is the key to everyone's retirement not just Agents. History shows that if you do not have 5 to 8 passive streams of income you will live in a house that is worth a 1/3 of you house today and your retirement income will also be 1/3.

Example;

Your Home Value

No Passivve Income Your current home 5 to 8 Streams of Passive Income

$100,000 $300,000 $3,000,000

When you retire what will a $100,000 home look like? What about a $3,000,000 home.

Your Income

No Passvie Income Current Income 5 to 8 Streams of Passive Income

$50,000 $150,000 $1,500,000

Take a look at those who are retiring today. There are many individuals who are at retirement age can not afford to retire. Now, you see why, it is never to late to start building wealth. Wealth Building is the key to our children and their children future.

As an agent in Real Estate Agent, you must be given the opportunities to better your lives. Ownership possiblities, Profit Sharing, Small Business Training, Real Estate Investing. Join a Company that provides these opportunities and more. Check out Keller Williams.

Learn your clients

Charles Brown (Counts Real Estate Group) — Sun, 30 Sep 2007 19:38:00 -0700

Seven Simple Steps to Real Estate Success Online

http://www.brokeragentnews.com/news/residential/2007_3/3_6_2007_ma_1173247010.html

Your invited to listen. Listen every Monday and Wednesday to change your Business and Life

Charles Brown (Counts Real Estate Group) — Fri, 28 Sep 2007 08:45:22 -0700

This Week on Millionaire Mondays:
October 1, 2007
Free streaming audio at http://www.millionairesystems.com/

Millionaire Mondays for Investors
	The Basics of Lease Options: With Wendy Patton

This week, Jay Papasan, one of the co-authors of The Millionaire Real Estate Investor, interviews a millionaire real estate investor, Wendy Patton.

Wendy started investing in 1985 because of a home shortage in Detroit. Her first property was a three-bedroom bungalow where she made her down payment with a credit card. Since then, she has purchased and sold more than 600 properties.

In this episode, you will learn the basics of lease options; controlling a property without owning it. Wendy will teach you about working with real estate agents and non-qualifying buyers, profitability, and how to price a home to a buyer.

Listen in Monday to learn priceless information from a lease options expert!

Millionaire Mondays for Realtors
	Staging a Home : With Dinesh Daryanani "Mr.D"

This week, Jay Papasan interviews Dinesh Daryanani, better known as "Mr. D." in the Fort Myers, Florida, area where he has succeeded as a real estate agent and investor since 2005. With a Fortune 500 background in software engineering and sales, Dinesh had prospered in the stock market.

Hear how a New Year's resolution, "to keep it real," led him to real estate and how he uses Vastu, the Hindu version of Feng Shui, to harmonize the flow of energy in a house for staging. Dinesh, just 29, has established multiple revenue sources to help him flourish in a changing market. He explains how he bought interests in flooring and glass distributorships to give him an edge with contractors as well as to provide him with additional revenue. To "survive and thrive" in the "perform or perish" real estate market, Mr. D. believes in being focused, knowing your numbers, networking, and utilizing databases.

You don't want to miss this highly informative interview.

Listen to Millionaire Mondays all week for free via streaming audio!
Downloadable audio files of each interview in MP3 format are available for a nominal fee.

New Real Estate Training will make a difference in your Real Estate Business

Charles Brown (Counts Real Estate Group) — Wed, 26 Sep 2007 07:51:49 -0700

TOP STORY: Gary Keller: "Tough times drive away the pretenders."

In a recent conversation, Gary Keller chairman and co-founder of Keller Williams Realty noted, "Tough times drive away the pretenders. Real estate agents can actually make more money in hard times."

Keller observed - "When the market shifts, in the short run everyone's business suffers to some degree because the shift occurs so swiftly. However, once agents get their bearings and see what it takes, the committed ones forge ahead, put in the extra effort and hours and lay the foundation to survive and then thrive.

Power up your survival skills

Free download from Lead Generation 36:12:3

Simply put, the defining difference between those who thrive in today's market and those who don't boils down to three key factors: mindset, commitment and action.

The Power of One, an essay by Gary Keller, kicks off, and is the foundation of, Keller Williams University's latest course Lead Generation 36:12:3.

This course is being offered in the Panama City Beach Market Center in October. Please call Charlie Brown at

850-392-1700 for more information.

Culture and Training Make a difference

Charles Brown (Counts Real Estate Group) — Mon, 24 Sep 2007 15:54:36 -0700

Keller Williams Realty | Keller Williams Realty Case Study now part of Stanford and Yale's core MBA curriculum

http://www.kw.com/kw/PressRelease.jsp?id=101&articleid=103&language=en

Screen clipping taken: 7/17/2007, 9:25 PM

Educate your Clients

Charles Brown (Counts Real Estate Group) — Mon, 17 Sep 2007 03:49:27 -0700

As REALTORS, we fail to communicate to our clients/customers what the true process of selling or buying Real Estate. We run through the process but we never sit down and go through it in detail. The process of consulting your clients/customers is the key to having a smooth transaction. Example tell them that they are going to having buyer or seller remorse. Because it's going to happen in every transaction at one point. A simple thing as setting up what the communication between the client and the REALTOR is going to be will save your client and you numerous hours frustration.

Customers Service is the one thing that we as members of the service community have forgotten. As we travel through the day we (REALTORS) will become upset that we don't receive customer service, then we don't provide it to our clients.

Suggested reading High Trust Selling By Todd Duncan

Changing Real Estate in Bay County

Charles Brown (Counts Real Estate Group) — Fri, 14 Sep 2007 11:16:08 -0700

In the crazy Real Estate market through out the country, we need to educate the Real Estate agents on how to be in business. We are lacking the true business training in our industry. Overall job of the Real Estate Broker is to provide the tools, train and consult their agent so that they can succeed at the level the agent desires. Real Estate is a true profession not a part time job as the leaders of the industry see it. It's not about the Broker it's about his/hers clients (The Agent) and their clients (The Buyers and Sellers). Educate and consult is the way we as REALTORS are going to make it through this market. I beileve it works in every market, what would it look like if the Brokers would of done that in the so call great market?