The Keller Williams Profit Sharing Model

By
Real Estate Agent with Keller Williams Realty

I've been with Keller Williams Realty for about 2 years now, and one of their lesser known benefits is the profit sharing model throughout the brokerage.  In a nutshell, it is possible to build a passive income stream for the rest of your life.  I recently met others who used their profit sharing to pay their house note (live for free?  Sure!), others to fund a retirement account, and ever others as their sole income!  This is my understanding of how it works:

Keller Williams Realty rewards their agents for bringing in other productive agents.  If an agent lists you as their sponsor, or the person most influential in the decision to work with Keller Williams, then that person is officially in your downline.

As your particular real estate office does business, each month the company financials are shared with the all agents.  That's one of the neat things I love about Keller Williams; we believe in an open book policy which includes training and financials.   When those reports of monthly profit comes to our attention, we usually are given a particular number in profit.  For this example, let's say it's $50,000.  

Usually, this profit would all go straight to the owners of the company.  However, as mentioned earlier, the owners believe in a profit sharing model and rewards those agents who sponsored productive agents that helped create this $50,000 profit for the month.

That profit is then split in half.  Half goes to the owners; half goes to the agents.  The agent half ($25,000) is split according to how much profit a particular agent contributed.  I'm still learning on how these splits occur, but I do know they are equivocally distributed among the productive agent's sponsors (upline) as profit sharing.

This is how it is possible to build that passive income stream I mentioned earlier.  In the past two years, I have brought a few friends into the business because I thoroughly enjoy the models, systems, and support that Keller Williams Realty has provided to me in the past.  My friends have helped make our office profitable, and as a reward, I get an unexpected check each month as long as they are productive each month.

Want to hear the best part?  After being with Keller Williams for at least 3 years, you are considered "vested" and can continue to receive your profit sharing even if you no longer work in real estate!  Isn't that grand!  It's definitely possible to build a retirement income from the Keller Williams profit sharing model.  This is exactly what I plan to do!

Note:  I am going to learn a bit more on how the percentage splits work and repost again very soon.  I was just so excited to share this information to everyone! 

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Rainmaker
93,817
Bill Sauneuf
John L. Scott Real Estate / Yelm - Mount Vernon, WA

As a KW agent, I'm both curious and concerned by Donna's comment that you lose the downline if you go to greener pastures.... Is this a universal KW thing??

I've never heard that...

Nov 15, 2006 09:32 AM #6
Rainmaker
1,476,833
Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator
I didn't mean to cause an uproar, but I can't imagine it would be specific to particular offices since you're allowed to have someone in your downline from another office and also other states... I've heard this from about 5 KW agents who have left and gone to other companies and were shocked to find out they were no longer vested...  I'm not with KW, so maybe it's not fact, but that's what I've heard from actual ex-KW agents.  I've asked a couple of KW agents that I know to ask at their office, but they always seem to forget when I bring it up.  If you're not currently thinking of switching companies, maybe it's not important to you, but I'm sure it would be a very valuable piece of information to know.
Nov 15, 2006 09:39 AM #7
Rainer
53,373
The MyHomeHouston Team
Keller Williams Realty - Houston, TX

I am working to speak with our team leader about this today.  If what Donna says it true nationwide, it really won't effect me since KW meets all my needs.  

In all honesty, what is the big deal about losing the downline if you change to another broker?  It seems fair to me.

Are there other brokerages that offer a profit sharing system like KW's?

Nov 16, 2006 02:20 AM #8
Rainmaker
3,067,662
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty
We did not factor in profit sharing when we joined.  We consider it a bonus.  Even without the profit sharing as a factor, KW was the best fit for our needs.
Feb 13, 2007 10:55 AM #9
Rainmaker
2,021,185
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker
Donna makes a good point Steve..you left something out!
Apr 16, 2008 03:12 PM #10
Rainmaker
304,306
Michael Mahoney
Century 21 - Boston, MA
Boston Realtor with Century 21

I am with Tony Marriott on this one. When I decided to make the move to Keller Williams there were so many other great things, it was kind of like "oh and by the way, there's profit sharing too."

To me the education and all of the technological tools are so worth it. I have been with them just under 1 year and consider it to be the best thing I ever did for my real estate business.

I love the fact that I can own my own sign and have my # on it. No slouch uptime agents getting my calls.

I love the fact that within 24 hours of joining you can have a great web site up and running with IDX search on it.


Their web sites for online learning material are GREAT. You can see more @ www.KwConnect.com and use the guest pass option.

If any has anyone questions about KW,  I would be happy to discuss them with you.

Jul 27, 2008 01:46 AM #11
Anonymous
A long time RE/MAX agent.

I think the real question is are you a recruiter or an agent? 

Let's do the math.  In 2007, KW paid out 65 million in profit sharing to 74,000 agents.  That's $878 per agent IF every agent received it.  The truth is, you are only eligible for the portion of the broker's profit YOU brought in and then it breaks down like this:

Monthly GCI
LESS Production Royalty (6% up to $3,000 cap per agent)
LESS Associate's Commissions
EQUALS Monthly Gross Market Center Income
LESS Licensee's Approved Budget Expenses
LESS Licensee's Loss Carry Forwards (THIS IS A BIGGIE - MORE ON THAT IN A MINUTE)
EQUALS Monthly Profit

So as you can see, it's quite small and the numbers prove it.  As for the Licensee's loss carry forward?  If you bring in an agent that doesn't produce, it screws up your downline for a very long time given that they are carrying those losses forward. 

In our office alone our agents averaged and additional $24,500 EACH as a result of leads and referrals from being with RE/MAX. 

You tell me which is better?  You sell a house or hope someone else does?

Just my two cents...  I'm a producing agent NOT a recruiter and RE/MAX gives me not only leads and referrals but tools, support, education and I earn twice as much as the average KW agent in my area.  The name of the real estate game my friends is production - because no plan is the right plan without it.  If you're not receiving a return on your investment (ROI) in what you pay your brokerage, you might think twice.  I know I do.  I pay a little over $2,000 more per year to be with RE/MAX but GLADLY.  I EARN and KEEP twice as much in my pocket.  KW can't and won't bring those kind of opportunities to me because their system supports spending as little as possible to keep the market centers profitable. 

Feb 15, 2009 06:47 AM #12
Anonymous
New kw agent
I recently joined KW in phoenix, trying to figure out if it's the right match. Seems to be good training, but how does more agents in my market help me? More competition! How does that help me? Not a big deal early when the office is new but more is only good up to a certain point. As far as losing the profit share if you go to another broker that's bs. When I left a fortune 500 company after being vested I didn't lose the pension I worked for. If is wanted to cap it if I were to switch fine...but lose it. That doesn't seem fair.
Jun 11, 2009 04:57 PM #13
Anonymous
Judy Rodriguez

You absolutely can go to other brokerage and still get your $$$...I am a producing agent and I get the report every month of where my profit goes- I never even met the agent who is getting it- but she started an Avalar in our city a year or 2 ago- and she continues to be listed as my sponsor ( my original sponsor quit after 2 yrs) and get a portion of the $. I think some of the KW things here must be very "office specific" as nothing is held hostage in my office. If you have a closing- you walk with your check, if you have a listing and leave- you take it with you. Maybe it's more a reflection of the broker, than the company?

Jul 08, 2009 01:42 AM #14
Anonymous
Adrian

I left KW after 2 years. Here's my 2 cents on profit sharing

 

1. the owners recruit the best agents because they know a lot of agents

2. When KW enters a market they grow quick so if you are in the first 10 who start recruiting, you're Golden.  if your number 89. Its tough to get good agents.

3. Nickel and Dimed to death

4. the crappy agents you recruit leave within a year or two.

 

I'm liking the virtual model right now.

 

I will say that the KW positive culture is almost work the 30k desk fee. almost

 

A

 

 

Jul 14, 2009 06:20 AM #15
Anonymous
Steve

Yes, I have studied KWs entire model and along with ALLLLL the fees and the fact the average check is pennies in comparison to what is promised on the very rare occassion that you actually get a check), they also never talk about helping you to build your business of Real Estate! The typically manager at KW goes there in search of the quick fix. So naturally, you don't get the best business nor Real Estate minds. So of course they cannot offer much in terms of building a successful R.E. career. It's an Amway approach, no direspect to Amway. At least Amway is very open with offereing a pyramid scheme. So to sum it up, yes, you do lose your downline when you leave (which you will), you are dinged for everything from forms to phone calls, desk fees, etc. and it is a Pyramid Scheme hidden in the huge book that they use to 'explain' their model.

Apr 08, 2010 10:25 AM #16
Anonymous
Kim Logan

I've been with Keller Williams Lake Oconee for 6 months. I have 5 people in my downline. That is extra. The good news that I have got over 50 listings and over 15 Keller Williams Referrals and am the leading agent in my area. Keller Williams has been the best thing I have ever done. My business doubled. I was at Coldwell Banker and thought about Remax but with the 18,000 cap and 3,000 royalty cap as much as I sell I am saving over 100,000 a year!!!! The differnce is the sharing attitude and teamwork everyone does. The profit sharing makes you want to share, Oh by the way I have a 90 percent cut and after I pay 18,000 I will have a 100. How much are you paying your company or owner??? Great company!!!!

Jun 01, 2010 12:12 PM #17
Anonymous
Marty Jones, CRS, CRB, CDPE

Another aspect of KW that isn't typically disclosed to the agent is that there's no profit sharing paid on agents that have capped.

 

Aug 16, 2010 05:22 AM #19
Anonymous
Brian

I belive and have seen the KW model benefit agents who are top notch in their field. The agents who are barely scraping a living, are the same agents who do not put in the time necessary and those agents who keep trying to reinvent the wheel. Profit share is an amazing aspect, and works if you recruit in TALENT, not just licensed people with a semi idea of how to run a business. After all, it is a BUSINESS you are running, you are not a salesman. If you have education and motivation, you'll succeed at anything. The KW business model fits those who are fit. If you do not find success, you just simply were not fit. I think it should raise an eyebrow to doubt when the largest producing agents in an entire region switch over to KW. The truth is, those costs that occur with being a KW agent are maximised when you focus on them. If you simply just turn your focus on education and production, those costs are minimized. If you focus on failure or all the reasons why you can't or how much it's going to cost, then that's all you will actualize.

Oct 11, 2010 03:01 AM #20
Anonymous
Anne

If you are with KW at LEAST 3 years, you become VESTED in the company and get to KEEP your downline and profit share. If an agent is capped, you are just getting your profit share UPFRONT as opposed to spread out. Yes, you get profit share when your OFFICE is profitable .. because the money you are recieving is from the OWNER's profit (the operatingprincipal/investor of your market center). There is not a losing situation for an agent, in fact it's a huge advantage over other RE firms. Very unique! I have been with KW for 2 years now and am simply amazed by the people who do not see the value of this company. I am sorry for those of you who had interviewed with a team leader of KW that did not adequetely explain the benefits and endless training, education and business growth opportunities within the company. Wow!

 Where people are getting their (mis)information is beynd me. I am a staff member from the origirnal KW office in Austin, TX and I know this information to be 100% factual. 

 

 

Jul 23, 2013 02:59 AM #21
Anonymous
anne

If you leave Kelle Williams before the 3 year mark, why would you continue to be rewarded? KW wants to earn your business and have you earn your profit share. I don't see how this is something to be upset about. You introduce someone to the company and the staff does the rest of the work! They process all their paperwork, get their licenses moved over, get them plugged in to training/coaching programs.. without you feeling obligated to be their mentor-- and for what? You get to profit off of the KW office's hard work of making that agent be successful. If the profit sharing system is the one thing the nay-sayers get stuck on-- then I am pleased to be with KW knowing that it's excellent training, coaching/mentorship programs and support keep the best of the best in the industry around. THere is a reason this company is #1 and won JD power and associate awards-- among other countless accolades. To each their own, but please do not trash a company you do not have the correct information about. 

Jul 23, 2013 03:04 AM #22
Rainer
43,081
The Niche Agent
The Niche Agent
Your Niche Is Our Niche

Speaking of "Profit Sharing".... I intereviewed Aaron Kaufman on my podcast, The Niche Agent, about his appoach to profit sharing and how he's built a very successful business from profit sharing and we discuss how it works. Check out the interview and let me know what you think!

www.TheNicheAgent.com/Episode18

 

Ryan Smith - The Niche Agent

May 12, 2014 09:29 AM #23
Anonymous
Terri Griffith

The office can manipulate their profit if they choose to do so. I was with them for nine years & have several people in my downline yet this office has a new manager & no profit month after month. I was on the ALC long enough to know what their overhead is and am friends with many of the agents now & continue to work deals & know that the office should be turning a profit.
After you leave you still pay the $25 admin fee each January. They don't always get a bill out to you so we nudge each other around town so that nobody loses out on a technicality. Are the really keeping in touch with ex agents nationwide to invoice them each year. I just imagine how difficult that would be if you are dealing with someones heirs. Is it just my old office or do all ex agents have this fee?

Mar 05, 2015 01:51 AM #24
Rainer
1,100
Dan DeBono
All About Realty - Lake Placid, FL

BHHS & Keller Williams - In my opinion they are taking real estate to all-new low levels as we do NOT need MLM schemes so agents are harassing other agents to join so they get paid.

Apr 14, 2017 09:01 AM #25
Rainer
1,100
Dan DeBono
All About Realty - Lake Placid, FL

These profit sharing proponents are all wrong - these companies take virtually ANYONE, they dilute the business down (as what do they care of they have 100 people making 10k - it is better for them better than 8 making 100k ... FOR THEM!!) How shortsighted many agents are ...

Apr 14, 2017 09:05 AM #26
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Rainer
53,373

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