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The millionaire real estate agent - Do i need to join Keller Williams?
One of my favorite books is the millionaire real estate agent by Gary Keller. The book shows how one can build a brokerage and have a mind set of a business owner. Although, I've ran my own business (non real estate related) since July of 2007 and it has provided me a stable income for the past 5 years, however it is not a business of my passion. It is becoming harder and harder for me to sustain.
July 2012 was a turning point in my life when my father, who was friend and mentor, suddenly died of a heart attack at such a young age of 65. He always told me that you have to be in a business that you love... otherwise you will not be successful. My father's sudden death completely changed how i viewed money and life but that's a different topic for another thread.
I am currently wth a small brokerage, Park Mason Brokers who gives me a very generous commission cut of only a $195 transaction fee. I recently closed two investors working as a buyer's agent. I don't mind working with investors, but i quickly realized that I much rather work as a listing agent than a buyer's agent. You have more control over your time and have more leverage. When you work as a buyer's agent, you have less control over your time.
If you work as a buyer's agent, i assume that most people don't care about whch brokerage you are with, but as a listing agent, customer would care a great deal if you are from a brand name brokerage like Keller Williams, compared a no name brokerage like Park Mason. Am I correct in my thinking? Ideally I would like to work 80% in the list side and only 20% in the buy side. Would it be wise for me join Keller Williams at this time if i want to eventually have my own brokerage. Sort of feel like a lone ranger trying to kick start this new business. I do have 5 year team of a web developer/DBA,designer, and an assitant with my current business and trying figure out how to leverage this team to my new real estate business.
James Park,
There is no point in building up a business with someone else when you should build up your own brokerages's name. Most don't care about the brokerage. They look for the agent they are referred to or that they see advertised often.
-Steven
-
Enrolled Agent
- Hamilton Tax and Accounting
- (224) 381-2660
- http://www.HamiltonTax.com
- [email protected]
Steven Hamilton II is on the mark.
I will send you a PM. I cant comment on this with a public post because I feel the need to cuss.
- Realtor, General Contractor, and Developer
- Redding, CA & Bend OR
- 4,148
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James Park There are pros and cons to working for both a small independent office, a franchise office, and yourself. The larger franchise office has automatic name recognition. They do a lot of marketing, etc. You need to list all the advantages and disadvantages of both, and make a decision. For instance, on marketing, how much are you charged for ads? Signs? etc. What are the franchise fee per transaction and any other fees on your escrows charged by the office? What is your split at each? Have you talked to agents at Keller Williams and asked them how they like the office, etc.?
I've seen smaller offices that have done the same volume of business as the larger franchise office. Some people prefer the franchise, and some the independent. Nobody can answer this question for you, you have to choose the office where you feel most comfortable, the one that meets your individual needs as far as marketing, training,etc. that fits your style of doing business and the clientel you are interested in working with.
Also, for those listing their properties, if you belong to MLS, the listings get the same exposure as the listings of the larger offices.
-
Contractor CA (#680782)
- American Real Estate 00848454
Working in a big national office is just one of the tools you can use to get listings. In the end you will have to start selling yourself. Once you get established and build your own good reputation you'll find yourself selling yourself more than your company. The reality is if you walk into those big name national offices you'll find the majority of those agents aren't successful. The ones that have good marketing plans and work them consistently, spend some money advertising are usually going to have business. The name alone won't make you successful. Good luck!
Like others have said, you certainly do not need to be at KW to build a team based business. However, make sure that whatever broker you go with is very supportive of the business within a business team model. Some small brokers feel threatened by a power agent that could end up being a large percentage of the business in an office.
One of the advantages with KW is that they understand and support the business model you are trying to build.
In any event I would recommend interviewing 4 or 5 brokers. Even the ones you do not end up going with will help you because you will have a better idea how they work.
I think whether or not to be apart of a large brokerage depends on how much support you feel you need. To just say "KW" because of the book is crazy. If you're looking to switch, interview as many brokerages as you can and decide from there.
Starting out I'd suggest a larger company just because they have systems in place a newer agent needs. Think of it as a springboard and a place to learn. It is good to know these perspectives so if/when you choose something smaller you will have a more balanced education. Large companies are helpful but restrictive. When the restrictions get in the way it is time to move.
I belong to KW, and I like it. I agree, the reason is not for the book sake or large brokerage.. check out this, http://www.hearitdirect.com/about/ In one of these videos the customer answers saying they do not care who the company is. (btw, this was put together by a very successful New Jersey Keller Williams agent)
Do it because the chemistry works with the team leader and Broker. so shop around!
I like them because they are investor friendly company! Because they realize that this is your business and a lead goes to you, not back to the company! Also because they really give you a blueprint on how to succeed, you just need to take action. There is something to be said for a company that is about to become #1 in the nation, in a short 25+ years.
I am also considering becoming an agent with KW. Yesterday a realtor called me from a for sale ad he saw online so I asked him a few questions about it. The more I have read on glassdoor about KW the more I like them.
Consider a high producing office over one that is only so so. Some offices in large companies can have considerable dead weight, so don't work in a dud type office with a bunch of duds. They will bring you down.
OTOH a successful office will have high energy and lots of good inventory. Good agents tend to price properties better which will make your job easier when marketing to buyers.
I have always worked for a small office, and have never had a problem generating listings and sales. It is all about you and your marketing technique. I am roughly 80 LA, 20 BA. I like the listing side better, for a host of reasons.
The internet leveled the playing field between large and small brokerages. If you stay small, be sure that you focus your marketing dollars on your internet presence so you can get your listings to the masses.
If you feel ill equipped to handle your real estate transactions with your experience level, a large company offers more individualized training and support. Regardless of your company size, training is available through title companies and educational committees through your local board.
I cannot believe the low cost of being an agent at your office! I am floored. I actually read it over 2 times to make sure I understood correctly. My concern is they might not be invested in your success at all. I can't imagine why a brokerage would even bother bringing agents aboard at that rate. Even if you closed 100 transactions a year, you would only be bringing in $19,500 before taxes! My point is, make sure whatever office you work under has reason to support your goals of being productive.
Back in the day, a large office was nice because they had a receptionist there all the time and lots of advertising to generate calls. Now with cell phones, internet, and email, I don't think your franchise name matters. You are always accessible.
I have my own one man office as I am pretty much my only client now. In the rare occasion that I deal with some other buyer or seller, they don't care that I answer my own phone, have a company that they never heard of, or work from a home office. People do business with people that they like. If you provide a good service, people will want to deal with you.
The history of Real Estate, the evolution of the industry and each individual market place are fascinating and confusing. Most answers on here are excellent and it comes down to where you feel comfortable.
Red Carpet is one of the oldest franchises, having started in 1966. Century 21 started in 1972 and became number one very quickly, and stayed there till the mid 90s. Then ReMax took over the number one position towards the end of the 90s and through the turn of the Millenium. I believe Prudential Real Estate may have moved to number one but now Keller Williams is poised to take the top spot.
My father was on original Broker with Century 21, and like your dad, mine passed away earlier this year. My condolences to you, my dad was my best friend and mentor as well. When my dad was an agent, he averaged 50 sides a year for 25 years, which back in the 60s and 70s was a good living. When I graduated from college and joined him, he was a small, 12 agent office. Together, we took it to over 100 agents and became the 62nd largest producing Century 21 office in the nation. Looking back on everything I experienced, being with a larger franchise brokerage will supply you with a lot of tools, name recognition and good training. The down side is usually a lower commission split, higher Franchise Transaction Fee and other fees.
Here in Orange County, California, we have several Real Estate agencies that have multiple offices but are NOT franchises. Some may be 2 of 3 offices and some have as many as 20 offices. They are a good compromise between the "mom and pop" and the "large franchises."
The most important part of being in the Real Estate business is what happens at the kitchen table. If you are good with your clients, knowledgeable and hard working, you will succeed with whatever office you are affiliated with.
Originally posted by Kim Knox:
I cannot believe the low cost of being an agent at your office! I am floored. I actually read it over 2 times to make sure I understood correctly. My concern is they might not be invested in your success at all. I can't imagine why a brokerage would even bother bringing agents aboard at that rate. Even if you closed 100 transactions a year, you would only be bringing in $19,500 before taxes! My point is, make sure whatever office you work under has reason to support your goals of being productive.
There are at least two low-cost companies in my market, one charges the agent $300/deal for the first 12 transactions in a year, then $99/deal after that. Another charges a flat $300/mth, regardless of whether you do zero or 10 deals that month. They actually provide a fair amount of marketing support, and a very nice "virtual office" platform.
Our instructor in real estate licensing class is a KW agent who owns her own office. (Yes, she owned the office but was not herself a broker.) She stressed repeatedly that you should go with a brokerage that has a commission cap. Her office had a cap of $25K per year per agent. Thus the commission split might be 60/40 or 70/30, for example, but after the broker's share hits $25K in a calendar year, every additional commission dollar earned belongs to the agent 100%. This is obviously very motivating to her agents to reach the cap as quickly as possible in a calendar year.
Most of the full-service brokers in the area do not have caps such as this, I'm told, so perhaps this partially accounts for KW luring top producers and growing at such a rapid pace. She also noted that the ReMax model of high fixed fees/expenses each month led to many ReMax agents bailing out when business plunged in the '08-'10 period, thus ReMax market share fell sharply. But naturally she was somewhat pushing KW's hybrid model with the commission cap.
Kim, I love your 80 LA , 20 BA model.
I've advertised for BA leads on Trulia and Zillow, but i am much more interested in building my LA inventory than working as a buyer's agent.
What have been some of your strategies that has worked in getting new listings?
Some of things I've been trying is calling on:
1) expired listings
2) FSBO
3) calling and mailing non occupied homes in my farm areas.
Is there other proactive tactics i can do to build my listing inventory?
Does it work to walk the neighborhood as ask the neighbors if they know of anyone looking to sell?
thanks.
James
Originally posted by Kim Knox:
I have always worked for a small office, and have never had a problem generating listings and sales. It is all about you and your marketing technique. I am roughly 80 LA, 20 BA. I like the listing side better, for a host of reasons.The internet leveled the playing field between large and small brokerages. If you stay small, be sure that you focus your marketing dollars on your internet presence so you can get your listings to the masses.
If you feel ill equipped to handle your real estate transactions with your experience level, a large company offers more individualized training and support. Regardless of your company size, training is available through title companies and educational committees through your local board.
I cannot believe the low cost of being an agent at your office! I am floored. I actually read it over 2 times to make sure I understood correctly. My concern is they might not be invested in your success at all. I can't imagine why a brokerage would even bother bringing agents aboard at that rate. Even if you closed 100 transactions a year, you would only be bringing in $19,500 before taxes! My point is, make sure whatever office you work under has reason to support your goals of being productive.
Thank you for your insights and condolences to my father. Mike, you are very lucky that your father was able to see grow to be a successful man in real estate. Unfortunately my father left too early as i just turned 36 last month.
I was one of those guys who was very driven by money and tracked my net worth every week since my early 20s (million net worth by 30 and "x" net worth by 40 etc. When my father passed away, it completely changed the way i viewed life, family, and money. While holding my dad's hand on his death bed, i realized that a man comes to this world with empty hands and leaves this world with empty hands. I really didn't understand this concept and didn't hit me until last July. In his last 5 years of his life, his business went under bankruptcy and he lived with a lot of fear and stress which I believe it what resulted in his sudden heart attack. He worked until the day he passed away.
He did teach me to have a big dream and vision, find what you love to do, be good at it and work very hard at it. I wish that i can find peace as my heart was not prepared to let him go.
Originally posted by Mike M:
The history of Real Estate, the evolution of the industry and each individual market place are fascinating and confusing. Most answers on here are excellent and it comes down to where you feel comfortable.Red Carpet is one of the oldest franchises, having started in 1966. Century 21 started in 1972 and became number one very quickly, and stayed there till the mid 90s. Then ReMax took over the number one position towards the end of the 90s and through the turn of the Millenium. I believe Prudential Real Estate may have moved to number one but now Keller Williams is poised to take the top spot.
My father was on original Broker with Century 21, and like your dad, mine passed away earlier this year. My condolences to you, my dad was my best friend and mentor as well. When my dad was an agent, he averaged 50 sides a year for 25 years, which back in the 60s and 70s was a good living. When I graduated from college and joined him, he was a small, 12 agent office. Together, we took it to over 100 agents and became the 62nd largest producing Century 21 office in the nation. Looking back on everything I experienced, being with a larger franchise brokerage will supply you with a lot of tools, name recognition and good training. The down side is usually a lower commission split, higher Franchise Transaction Fee and other fees.
Here in Orange County, California, we have several Real Estate agencies that have multiple offices but are NOT franchises. Some may be 2 of 3 offices and some have as many as 20 offices. They are a good compromise between the "mom and pop" and the "large franchises."
The most important part of being in the Real Estate business is what happens at the kitchen table. If you are good with your clients, knowledgeable and hard working, you will succeed with whatever office you are affiliated with.
David, I actually don't mind the idea of putting a cap on the Broker earnings from an agent. I think it is even clever. I rarely hear about other offices commission strategies so this is enlightning. Thanks for sharing. I keep my office lean and mean. This enables all of us to make a very good living if we follow up on leads and be proactive.
James, In terms of getting listings, I have always been of the philosophy that you just have to be smarter, and work harder than your competition and ALWAYS ALWAYS ALWAYS answer your phone. I don't go after expireds or FSBO's right now, although I have in the past. I am a reo and short sale agent. REO is on hiatus right now.
Decide what business you want to pursue and just go get it. It is yours for the taking. Once you decide what listngs you want, focus your website and blogs on that subject. Carve out a nice little niche for yourself.
Follow your personality type in terms of how to obtain business. I am low pressure, high information, because that is who I am as a person. Be yourself, don't try to be a salesperson if you are not one, it is offputting to potential clients if you are uncomfortable in your delivery. If you are comfortable knocking on doors, go for it!
Kim,
and ALWAYS ALWAYS ALWAYS answer your phone.If only more agents felt that way!!!!! Here n CA, these morons even have the audacity to write in their listings that phone calls and messages will NOT be returned! What kind of people business practice is that? Unbelievable to me.
Originally posted by David Beard:Originally posted by Kim Knox:
I cannot believe the low cost of being an agent at your office! I am floored. I actually read it over 2 times to make sure I understood correctly. My concern is they might not be invested in your success at all. I can't imagine why a brokerage would even bother bringing agents aboard at that rate. Even if you closed 100 transactions a year, you would only be bringing in $19,500 before taxes! My point is, make sure whatever office you work under has reason to support your goals of being productive.
There are at least two low-cost companies in my market, one charges the agent $300/deal for the first 12 transactions in a year, then $99/deal after that. Another charges a flat $300/mth, regardless of whether you do zero or 10 deals that month. They actually provide a fair amount of marketing support, and a very nice "virtual office" platform.
Our instructor in real estate licensing class is a KW agent who owns her own office. (Yes, she owned the office but was not herself a broker.) She stressed repeatedly that you should go with a brokerage that has a commission cap. Her office had a cap of $25K per year per agent. Thus the commission split might be 60/40 or 70/30, for example, but after the broker's share hits $25K in a calendar year, every additional commission dollar earned belongs to the agent 100%. This is obviously very motivating to her agents to reach the cap as quickly as possible in a calendar year.
Most of the full-service brokers in the area do not have caps such as this, I'm told, so perhaps this partially accounts for KW luring top producers and growing at such a rapid pace. She also noted that the ReMax model of high fixed fees/expenses each month led to many ReMax agents bailing out when business plunged in the '08-'10 period, thus ReMax market share fell sharply. But naturally she was somewhat pushing KW's hybrid model with the commission cap.
Brokerage caps are the norm in cincy. The 100% is a misnomer as most have franchise fees that will come off the top, then the split happens. If you've capped, you'll be charged the franchise. Sometimes, the franchise is less if you've hit the split.
When I was selling in Charlotte, NC my 100% company charged $35 per month, and $299 per closing and they were the second largest with over 800 agents. Now that was a great deal!
Originally posted by Joe Delia:
Brokerage caps are the norm in cincy. The 100% is a misnomer as most have franchise fees that will come off the top, then the split happens. If you've capped, you'll be charged the franchise. Sometimes, the franchise is less if you've hit the split.
Thanks for the extra clarification, Joe. I assume that these franchise fees, after hitting the cap, are still trivial for a high-producing agent compared to giving away 30-40% of their commissions, so I think the point is surely still valid. I also assume the caps vary by brokerage, and that a high cap wouldn't be worth much to an agent. Those new potential agents that had talked to the biggest firms, such as Sibcy or Huff, didn't seem to be aware of a cap, but they might well have been too early in the discussions to even have read through the documents thoroughly. Certainly, the instructor had come from a big firm and bemoaned the fact that she'd paid $60K+ to her broker in the last year there prior to leaving.
So clearly agents looking around at full-service brokerages should look for a reasonable cap, and it goes without saying that they need to know exactly what fees they'll incur both before and after they hit the cap.
I don't think anyone mentioned this but I didn't have time to read this whole thread. I am a former Keller Williams agent and one of the great things about KW is that you can brand yourself as you please!
You can join KW and keep your Park Mason name! Most people operate as either a team or group. If you build up a huge business and want to leave down the road, you have been branding yourself as the Park Mason group/team/etc the whole time and you can make a nearly seamless transition.
Keep the name and go to KW and get the best of both worlds!
I believe recently Keller was announced as
the #1 brokerage in United States
www.philly.com/philly/business/workplaces/Despite_the_recession_Keller_Williams_employees_shared_success.html
I’m not too sure about the Keller brokerage near me
Reason – they seem to relocate buildings every few years ,
but my cousin loves working for Keller Williams in Arizona
Originally posted by @Steven Hamilton II:
James Park,
There is no point in building up a business with someone else when you should build up your own brokerages's name. Most don't care about the brokerage. They look for the agent they are referred to or that they see advertised often.-Steven
Harsh.
Some people could use the benefits that a large brokerage offers. With Keller Williams you can have your own company within a company. If you feel that later you want to break away and start your own brokerage, then that is easy. You've already established your brand and gotten the education while starting up.
Also in most states you must be affiliated with a brokerage for a minimum time. In WA it's 3 years before an agent can be a managing broker. If your intent is to own your own brokerage you must go through this right of passage. In the mean time build up your clientele.
@James Park you seem to embody some of the concepts that Keller Williams is built upon. You are an entrepreneur, you are living your life with a Big Why and you want to improve yourself. The biggest advantage to working at a KW office is the prolific training that you are offered. One could spend 40 hours a week in training.
The KW model is awesome. Splits are very generous and you can truly cap quickly on office and franchise fees. However you do NOT need to be a KW agent to live the Millionaire Real Estate Agent model. The book was written for all agents to learn to improve themselves and their business.
I highly recommend all of the Keller Ink books to anyone interested in performing better at work and living a better life.