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TODAY'S OTHER NEWS

UK agents promised "true wealth" if they follow US-style industry training

The US-based real estate firm Keller Williams says it is aiming to be this country’s leading agency training organisation.

Ben Taylor, who last year became Keller Williams’s UK managing director after quitting his post as a director at Countrywide brand John D Wood, says: “We are systematically going about building what we want to become - the UK’s number one training and coaching organisation for the industry.”

In an interview with leading industry consultant Chris Watkin, Taylor explains that while Keller Williams is initially seen as an estate agency from the US that operates in parts of the UK through ‘hub’ style market centres, in reality the organisation is rather different.

“I guess you’d say it’s a training and technology business that gives individual and teams a platform with which to go and build their business” says Taylor.

Despite his extensive agency background he says his main role now - as KW’s chief UK representative - is to teach and encourage self-employed estate agents to be successful running their own companies.

Taylor says his ambition is to do nothing less than transform the UK industry through the training model put forward by Keller Williams - and he says this country is ripe for change.

For example, he says too many existing UK agents carry around fear. This manifests itself as worries that they may not make enough money, do not have enough influence (especially if they work in large corporates) and doubts that they can run their own businesses.

Taylor insists that the Keller Williams model wants agents to change that mindset so that, for example, instead of seeing a 10 per cent commission as being ‘what they get’ instead it should be interpreted as ’90 per cent being given away’.

In a lengthy interview with Watkin, which has been shared with Estate Agent Today, Taylor says that agents who ‘give away’ that 90 per cent of fees, who have very low basic salaries from established agency business models, and who would end up leaving the company with nothing for their efforts over time, are ripe for transformation.

Instead, he wants agents to become self-employed and take advantage of what he calls “crazy low” interest rates, and borrow enough to provide their income for six months. 

During this time they would train along a lengthy and continuing Keller Williams training model - called Ignite - which has various 30-, 60- and 90-day plans. Through this route, and the flexibility of self-employment, Williams says agents can realise what he calls “true wealth” - a combination of higher income and a working model that suits their personal ambitions and those of their family.

Keller Williams’ business model means agents initially retain 63 per cent of their commissions, with the remainder covering the costs of the market centre service. Once they reach a 'cap' of £60,000 the agent then retains 90 per cent of their commission with the remaining 10 per cent going to Keller Williams.

Agents operate in their own way but are encouraged to use market centres - effectively administrative hubs similar to serviced offices. These provide agents with desk space, IT support, CRM systems and training facilities.

Taylor uses the interview to hint that details of a new Keller Williams licensing programme may be announced soon.

The overall interview - which you can see below - is lengthy but interesting as an insight into US-style training techniques and how they could be used in the UK agency industry.

Our thanks to Chris Watkin for sharing the video with EAT readers.

  • Simon Shinerock

    Sorry to burst your bubble Ben but the UK is systemically and culturally incompatible with your business model. In simple terms our commissions are too low and our mentality too cautious. Anyone good enough to do it your way would be better off going it alone, your agent turnover figures will tell the story

    Russell Quirk

    Simon. U.K. agents are more ambitious than you give them credit for and many want to earn what they deserve. The cautious ones may stay where they are, sure, but the good ones will look to prosper by retaining the majority of the selling fee that, after all, they earn.
    Going it alone and having to deal with compliance, tech and admin isn’t very optimal. Whereas having the support of a global brand, training and, of course, all your portal and CRM costs paid for by Keller, will make a lot of sense to smart agents.
    As for commissions, an average U.K. fee of £3000 means that a Keller agent keeps £2000 per transaction. Instead of, what, £150 with Countrywide or LSL? That’s a huge incentive.

     
    Jason Cannon

    Fees are not customers No1 focus, value for money and service are. RM has reported this to be the case. Agents are now able to get paid fairly for the job they do. The KW model does not rely on market share and agents can earn a very good income from selling a couple of properties every month. We are seeing this already in the UK. KW agents are achieving higher fees, lots of others are also doing this. Sean Newman will confirm this, Neil King will confirm this, KW agents will also, and I can go on. Our training helps agents earn a decent fee. There is an alternative. The SE model is working in France, Portugal, South Africa and 35+ other countries.

     
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    Simon hi, you’ve built a strong business and have firm views on what does and doesn’t work. I have huge respect for any owner that’s achieved what you have. It took me years to to become a business owner and without doubt it’s the best thing I’ve ever done in a work/business capacity. I’m not suggesting that KW is right for all, however, for those that want the benefits of business ownership but either don’t have the money to start their own or feel concerned about being all on their own, KW in many ways gives them the best of both worlds. Low costs and amazing support in training, coaching, technology and systems. Often the very things new business owners need the most. As I said, not for all but brilliant for many.

     
  • Chris Arnold

    One only has to look at videos, such as the Bold training programme on YouTube, where agents are encouraged to lie on the floor shouting "I'm a money magnet." to realise the type of brainwashing that goes on in the KW culture.

    KW derive their income from a structured 12 month programme, that whilst not compulsory apparently, is heavily promoted. Agents are encouraged to maximise their 'touch points' and maintain excessive contact with anybody and everybody they meet.

    The promise of "true wealth" will attract those agents in it for the money. The very same agents that have given this industry such a poor public perception.

    Fools gold.

    icon

    Chris, if you’d ever met me you would know I’m an unlikely subscriber to rolling around on the floor as described! What we’ve found to be true is that our model better enables the agent to deliver a more personal quality experience. It also better allows for the client dealt with on a relationship basis rather than transactional. Very happy to show you how and why KW has been successful in so many countries outside of the US. I think you’d agree when a business has so many agents all over the world they’ll always be some anomalies! We have many amazing agents here in the UK who are driven by contribution and value and understand money is a bi product of doing an exceptional job.

     
  • Sam Hunter

    Structured 12 month training programme sounds like a positive thing for any agent, regardless of their 'model'.
    Maximising touch points and contact with people in their network is also the basis of effective prospecting, nothing wrong with that IMO (certainly beats waiting for a RM lead that's been sent to 5 other agents to come into your inbox)
    Not sure about the "money magnet" lying on the floor bits... Not for me, but nothing wrong with finding your own affirmations or waggle to keep you focused for yourself and your clients.
    I think if KW make their approach a tad more Brit-centric, and say no to more agents than they say yes to, as bums on seats will just dilute their brand and mission, then they'll be a business others will look at as how the industry can move into the modern age

  • Jason Cannon

    Agree with lots of what Sam says. Structured training is offered and coaching to help agents become the very best version of themselves. I've been an agent for 37 years and what I thought was good was very average. Having been through the UK training and coaching I can confirm it is probably the best that is available in the UK.
    We all need to improve standards and raise the bar.
    I have personally never laid on the floor and talked about being a money magnet!

  • Andrew Stanton Estate Agency Insights Strategies

    I agree with Simon - go it alone - it is cheaper - the brand is not KW - it is you. I do not think that Mr Vendor in the UK is going to be too interested in an agency with its foundation, roots and philosophy in Texas.

    A few days ago I had the KW model explained to me by Russel Quirke, and I think it was: - if you join KW, you pay 30k a year to KW. This covers all costs, then after banking 150K of fees in any given year you give 10% of banking's over 150K to KW.

    So, year one total banking's for 7 months (as no money in month 1 to 5) is 65K, minus 30K to KW = 35K minus - your salary, car and all other costs for 12 months means you are minus 25K.

    Year two, by some miracle you bank 200K (not make profit but bank) you pay another 30K to KW and 10% of 50k of banking's - 5K, total 35k to KW. So, at the end of year two KW has 75K of your money.

    By the end of year two - most cold start estate agency enterprises break even, (unless it is an online cold start in which case it never breaks even) but the KW candidate will be sitting on a 75K mountain of debt, which in year three with another 30K to be paid to KW plus a 10% over ride on turnover not profit, will have most KW candidates chipping out in about month 14 of the operation. Unless they have a large amount in the bank.

    Russel if I have got this wrong, please let me know and perhaps layout in this forum the 2 year cost to a new KW candidate, and the upfront cost to 'buy in'.

    Claire Down

    Hi Andrew,

    Not sure where you are getting your figures from. Also, the above is assuming the agent is only doing sales and no lettings.

    In Year 1 if an agent banks £65,000 they would take £40,950.
    In Year 2 if an agent banks £200,000 they would take £142.400.

    The agent has no office, portal or CRM expense as this is all taken care of for them. The only upfront 'buy in' cost is £250 + VAT, as I am sure you would agree, much less than the £30,000 office fit out expense you have detailed.

    Very happy to go through the numbers with you or anyone who would like further confirmation.

     
  • Andrew Stanton Estate Agency Insights Strategies

    If anyone wants to set up their own agency - here are the figures based on an office in the high street, if you go serviced office or work from home, or coffee shop, broadly speaking costs are about the same as you pay more in terms of online presence for your business to grow the brand.

    The question is why would you want to pay 30k a year to KW on top of this?

    Here are the figures; it costs 30k to acquire premises and kit the office out and have all the IT hardware, systems, and office furniture in place. Then it costs 18K a month to cover the overheads, for a team of four-sales people and their salaries, cars, website costs, and all other costs to run the office and sell properties.

    A traditional agency trading 50-miles from the capital will then market and sell property in all price ranges, mostly from £200,000 to £600,000, and as the brand matures they may specialise in both the mid-range and the top end range £800,000 to £1.5M. On average they sell property at an average price of £360,000 and they charge 1.1% plus VAT, or around £4,000 plus VAT, £4,800 in total on a no-sale, no fee basis.

    In the first 12-months of trading – Year One - if they sell a property day one, the cheque for the completed sale arrives five-months later, and as they spend the first month getting property stock on the market, it is in their second month real sales begin. So, after six-months of trading they have spent 30k on setting the office up and 108k on running costs, that’s 138k, and probably they have received only 5k in on commission from completed sales.

    Over the next six-months their outgoings are another 108k, and the commission from completed sales dribbles in, plus VAT, at a rate of, 5k month six, 7k month seven, 10k month eight, 12k month nine, 14k month ten, 18k month 11, and 20k month 12, total 86k. So, 236k spent out, and 86k cash flow in. Profit; what profit? there is no profit, they are now minus 160k for the first year.

    Over the next 12 months – Year Two - office costs are 19.5k a month, and income from completed sales is 26k a month. So 234k spent out, and 312k cash flow in. Profit; 78k for the second year.

    In the next 12 months – Year Three – office costs are 20k a month, and income from completed sales is 28k a month. So 240k spent out, and 336k cash flow in. Profit ; 96k for the third year.

    On a serious note if you have a business that is in the doldrums or you are in the first stage of running your agency business, just reach out and I am more than happy to give free advice. That is right, free advice backed by 34 years of agency experience, all of it in the UK.

  • icon

    Ben Taylor "quitting his post as a director at Countrywide brand John D Wood" is not the way most people would remember his departure. After the resignations of 30% of his managers and the decimation of JDW's profitability, my recollection is that he was politely asked to find other opportunities, 11 months after taking up the job.

  • jeremy clarke

    Didn't Remax made such a bold promise almost 20 years ago? Where are they now, seen a few come and go over the years?

  • Rollo Miles

    It is clear that across all kinds of industries and sectors more and more people are
    choosing to step out of the 9-5 grind and create a better lifestyle.
    There has also been a big shift in the consumer's attitudes. For various reasons they prefer to work with someone they know and trust rather than a big corporation.
    We have all watched the collapse of high street model, and over the last ten years we have also seen the discount onliners grabbing a share of the market but it has not really worked for them.
    So a third model, one based on very personal "bespoke" service, is really starting to get a foothold. Buyers and sellers, landlords and tenants can now choose to rely on an individual who works for himself/herself under a banner such as Agent and Homes, Keller William, and others who are all trying to occupy this new space in their own way .
    Probably the three models will co-exist for a while, and time will tell which of them comes to dominate, but the key will surely be who can offer the best service for a fair commission...

  • Velgram Quaid

    Keller Williams has the unpleasant whiff of a very dodgy pyramid selling scheme. Join KW and the only people making money.... will be KW.

  • Jason Cannon

    And 190,000 agents using KW are not making any money. I know agents can be daft but that is a stretch.

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