Keller Williams Profit Sharing System
There are a lot of misunderstandings by those outside of Keller Williams, so I would like to dispell them by explaining the Keller Williams profit sharing system in layman terms for the benefit of new or future agents.
There are essentially two fees paid to the company when you have a closing. (1) The 6% royalty fee that is paid to corporate headquarters in Austin Tx. This is capped at $3000 in a 12 month period. (2) Company dollar, which for new agents starts at 30%, and in Colorado Springs, caps at $18,000 in a 12 month period. The only way these fees are paid are when an agent has a closing. If you don't close enough transactions to cover these fees in a 12 month period, the difference is forgiven and you start over on your anniversary with the company.
At Keller Williams Clients' Choice, there are other monthly office fees for technology ($38), advertising ($25), and consortium ($10) and if you want to rent an office space (variable).
Of the $18,000, ideally $9000 is profit for the owner of the franchise, the other $9000 pays for expenses with the remainder being "shared out" with the agents in your tree that sponsored you in the company. Remember, this is spread out over a 12 month period. The more agents we have closing transactions and paying their fees, the more expenses are paid, and the more profits shared. Thus the reason for the strong support network in the company, everyone wants to help you be successful. Our office at Keller Williams Clients' Choice in northern Colorado Springs has profit shared over $900,000 with their agents and staff in the last 12 years and the Keller Williams company has profit shared over $520 million since 1997. There are many retired agents in the company that receive a monthly profit sharing check (passive income) in the $1,000's. Some would argue that $18,000 is a lot of their money from commissions. I feel it is a fair trade for the privilege of using the Keller Williams name and for all the training and support available. In fact, my partner and I cap every year, and it is because of the training, support, and technology that we receive through our office. Those that participate in the weekly sales meeting, training, online training, and mentoring, are the most successful agents. Real estate companies that do not provide training and mentoring for their new agents, are not doing them any favors. As one wise new agent said, "90% of nothing is still nothing." Our mission is to help new agent succeed by providing them with the tools and training at the onset of their career, so they can make it a career.
I suspect that the largest difference with the Keller Williams profit sharing system compared to the traditional agent fee system, is if there is a loss due to high expenses and low production, the owner of the franchise covers the loss with no additional cost to the agents. In my opinion, other traditional real estate company owners see this system as a threat to their profit margin, and as a result talk badly about Keller Williams. This is frequently reported by agents transfering from other companies, but it is a proven system that is really growing rapidly. That is why Keller Williams is the ONLY major real estate company that has grown in the past five years. We are currently in second place, but anticipate being in first place early next year. And we did it with NO national advertising of our label!
Keller Williams is also an open book company. Anyone can ask any Keller Williams Team Leader to show them their accounting books. I would suggest that you should ask to see the books for any real estate company you are considering. If they are unwilling to share their books, there is sure to be a reason, most likely they are not a profitable company, and may soon be out of business. (Both of the other companies I interviewed are no longer in business and they were franchises of national companies.) The more agents they have in their office, the more income they can generate, and the more losses they can share with their agents. In other words, you really don't know what your monthly office bill is from month to month if the company expects the agents to pay toward their losses. Keller Williams Realty will never do this to their agents. Our system forces the owners and team leaders to be good business managers and keep expenses low.
So, if you are considering a career in real estate, give me a call (719-964-4810). I would be happy to discuss the Keller Williams difference with you. Then visit your local Keller Williams office and see for yourself.