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Thank ReMAX for Keller Williams

I've finally gotten around to attending a Keller Williams career night. This is a monthy meeting designed to introduce the Keller Williams business model to people considering becoming an agent at KW. At this meeting I learned that ReMAX was actually one of the major forces responsible for the Keller Williams business model.

It seems that way back in the days that Gary Keller was running his brokerage office in Austin, a new kid on the block arrived - ReMAX. ReMAX made a big splash in the Austin market with their business model and most of Keller's top agents were walking out the door to go join ReMAX.

Gary Keller caught up with them on the sidewalk and asked them to come back in and talk. His question to them was - If you could design a real estate company, what would it look like? His agents started with three major points:

100% Commisions
Great Training
Retirement

From these discussions Keller Williams Realty and the innovative KW business model evolved into what it is today. And that group of agents and Keller at the boardroom table has evolved into the International Agent Leadership Council. The IALC is the corporate entity comprised of agents and officers that continually evolve the business model.

Each Keller Williams office is governed and driven by their local ALC. All decisions on how the office is operated come from these councils. The Keller Williams' business model is agent-centric. An example; KW does not advertise the franchise to increase brand awareness. This can be seen as an upside or a downside. On the upside, the brokerage isn't taking money out of the agents' pockets to advertise the franchise. Agents are encouraged to spend that money on branding themselves and their business. On the downside is lack of KW brand recognition in communities where Keller Williams has yet to establish market share.

In Danville, we had a recent meeting called by the ALC to discuss brand advertising in our communities. The ALC had discussed the benefits of this and then brought it to the agents to see what people wanted to do. The vote was unanimous to implement some KW brand advertising in our local community publications. The cost - $5.00 a month per agent.

That's the KW business model in operation - leave as much money as possible in the agents' pockets and let them make the decisions on how to spend THEIR money to build THEIR business.

I like it. We like it.

Posted by HarperMees & Associates on 03/03/2007 10:22 AM

Comments (12)

kw, keller williams, alc, ialc

Post is included in group: Keller Williams 'Rainers

12 Comments on Thank ReMAX for Keller Williams

MAR

2007

I don't like it - I love it! There's nothing more fun than checking my money market account and seeing those profit share deposits!

Gary Keller was obviously in tune to what was going in way back when and worked to build a successful business by offering what agents wanted. Thanks for this post.

FEB

2008

Great point! In your post above...

"most of Keller's top agents were walking out the door to go join ReMAX.

Gary Keller caught up with them on the sidewalk and asked them to come back in and talk."

I gleaned why Gary Keller has been and will continue to be very successful in anything that he wants to:

He listened!

Most Brokers would have let their egos (stubborness/stupidity) keep them from finding out exactly why their people were unhappy enough to leave, and not just make promises to correct things....but to actually "Move with the cheese".

Gary keller has written,what I personally consider to be, one of the top 5 books ever written on not just the real estate business, but any sales business! . If you haven't read it...you are cheating yourself!

P.S. I am not a Keller-Williams agent, relative, or associated in any way...just a big fan!

MAY

2008

I love the KW's model and although I am not a KW agent I still think there is a lot to learn from their business plan!

The model work's....whatever its roots and I am happy to ba a pert of it.

Every pearl begins with a grain of sand irritating some oyster! I'm not sure if I just called Gary Keller an oyster, but I hope he won't hold it against me if I did! :)

FEB

Very interesting comments. Which is the better deal? You sell a home or hope someone else does? In 2007 the average RE/MAX agent sold 3.1 million, the average KW agent sold 1.5.

If you average the profit sharing in 2007 by the number of agents it runs about $878/year.

RE/MAX distributed over 4.9 million leads to their agents. In our office alone (50 agents) the agents were paid $250,000 in gross commissions as a result equalling $5,000 per agent!

They can keep their $878. I'm going to collect my $5,000.

Thanks, but no thanks.

FEB

Huge Re/MAX Fan - The latest Re/MAX agent to join our office was paying $1400 a month for office space at Re/MAX. She has a very nice office here that she styled out. She is saving $1100 a month to be in a more centrally located office with better sign exposure close proximity to three great restaurants, an upscale coffee shop and the Best Western for relocating clients.

So let's see $1100 x 12 = $13,200 + $878 - $5000 = $9078

The last four Re/MAX agents that joined this office listed these as their reasons - the business model, the training, the culture.

MAR

Most KW offices I know about, 5% of the agents sell 85% percent of the real estate. But these offices keep full rosters of non-producing agents. KW will sign ANYBODY up and they know that a new agent will sell 5 or 6 homes because of people the know or are related to.

RE/MAX is and will always be for more experienced agents that actually produce! If you do not meet your cap at RE/MAX, you are asked to leave. If KW is getting any ex-RE/MAX agents, well, you know the reason why.

If the agent you speak of was paying $1400 a month for office space, well that speaks alot about her skill to negotiate. At RE/MAX your Deal is what you negotiate!

In my market KW agents are well know for buying their listings. I am always going in behind them and mopping their mess.

This last comment (anonymous - go figure) is completely off-base and unwarranted. I am no longer with KW (work with a small boutique firm/development company), but it's nothing like what "MAR" describes. Industry standard is representative of the 80/20 principle (80% of the work is done by 20% of the workforce) and that applies to MOST KW offices AS WELL as MOST RE/Max offices. Both KW offices I worked with during my 4 years with that company had annual "housekeeping" to slough off non-producers. I know an agent that works for RE/Max in Denver and her ability to pay the $1100/mo desk fee doesn't say ANYTHING about her negotiating skills... she just relocated there and her husband pays the bill. Just because you don't like a company doesn't give you the right to bash them... what's that old saying? "If you can't say anything nice, don't say anything at all."

SEP

Just read HarperMees & Associates (Keller Williams) about KW being cheaper. Your math doesn't tell the whole story, it's not accurate. To be fair you need to look at the caps.

At Re/Max... that agent who pays $1,400 is also at a 100% split - Which equals $16,800

That same agent who at Keller Williams, also has a cap and a royalty... If they are at KW paying $18,000 cap and a $3,000 royalty... add the $3,600 a year for the office too, that equals $24,600.

That is $7,800 MORE at KW than Re/Max.

Please don't try to skew the numbers. It's VERY tough to argue that KW is cheaper than Re/Max. There's other benefits to KW than Re/Max, but being cheaper usually isn't one of them.

The agent I was referring to in the comment above was on 95/5 split at ReMAX. The comment had nothing to do with commission split - just the cost of office space (in this area(.

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