The Atlantic Ocean is a vast space – some 4,000 miles eastwards across from the USA until land is met again. 4,000 miles sounds a lot because it is.
And so it is that not only are we detached from our American cousins by a chasmic seascape, but also by a big difference in our property sectors – two countries separated by a common language but also separated by a common industry.
I’ve been involved in estate agency since I was a kid. My dad and my uncles were estate agents as was their father too. I grew up listening to daily management meetings going on around my grandparents’ breakfast table and with frequent visits to the family’s offices across Essex whereby I can still smell the freshly opened boxes of paper and the copier toner.
My dad’s secretary used to tickle my tummy (when I was young mind) until one day she retired, replaced by a new younger version that he promptly married (that’s for another blog, another time). So, you see, estate agency is literally in the family.
My first job in agency was in 1984 at 16 years old and it was where I cut my teeth on the twice weekly send-out, wrestling with folding and franking machines, as did my then manager who would shout ‘tea!’ at what seemed like ever more frequent intervals.
Since graduating from the backroom, I have co-founded, run and grown traditional and online estate agency businesses.
I’ve built houses, launched property recruitment firms, set up innovative lettings start-ups and sold many of them on. I’ve been elected to council and chaired planning committees and formed land asset strategies.
I’ve advised public authorities on housing and helped to write the Housing for London policy for the Conservative candidate for London Mayor.
As part of my involvement as an investor and director at Keller Williams Plus, I even keep my hand in and list and sell a handful of homes here and there in order to lead by example.
I’m no stranger either to regular radio show punditry on the subject of property.
In other words, I know it all. I don’t need to learn anything new because I’m knee deep in property experience more than most. Except I’m kidding, because for anyone to really believe that of themselves would be quite delusional.
And so, it became evident to me this month when I visited Dallas for the 2020 Keller Williams ‘Family Reunion’. In part, a jovial, social get-together of 20,000 Keller agents (a mere 10% of the total) from around the world but, in the main, a focused, inspirational conference, highlighting the performance of the Keller Williams organisation, its vision, its technological superiority and above all its culture.
For five days, Gary Keller and his leadership team extolled the virtues of the business and spent time saying thank you to the assembled delegates for making Keller Williams the number one real estate business on the planet, one of the top five places for women to work in the world (Forbes), the top training company anywhere (Training Magazine) and a recognised best in class technology innovator as voted by Inman and Fast Company.
It’s hard to overstate the atmosphere at this event. 20,000 people in one place all working under the same brand is more rock gig than real estate conference, and that’s particularly evident when Gary Keller himself walks on stage and is greeted by cheers and multiple standing ovations from an admiring and, I might say, grateful audience. This is because Gary, in his 40 or so years at the helm, has shaped and changed lives.
There are 10,000 millionaires amongst the 192,000 Keller agents worldwide. And it’s rumoured that he has recently turned down an offer of $2bn for the company that he founded and of which he still owns over 90%. For context, Keller Williams sold 1.04 million properties in 2019. That’s 2850 a day.
Until it arrived on our shores, did we have anything like the scale and grandiose of a Keller Williams in the UK? Well, perhaps we once sort-of did, relatively speaking, in Countrywide during its 1990s halcyon days.
And we could have had in Purplebricks if the public hadn’t called a market share ceiling on its cheap fees and fragmented service, rendering it paralysed and at nowhere near the 10% share that its new CEO is so desperate for.
The US approach to real estate is bigger and louder than ours. You could say that this is purely because their population is four times bigger and their percentage fees are higher, yet you’d be missing that many of these agents are doing much lower volumes than a UK branch and in markets that have average house prices of less than $200,000.
Forget the excuse of ‘different’ unit economics for a minute because, regardless, the US property sector puts us to shame. It’s not all just flashing lights and loud music and stage shows, it’s simply much better than ours and here’s why…
Americans look upon real estate agents as professionals, up there with lawyers, doctors and fund managers. They are admired and respected and not just because they earn a lot but because they do a great job.
I’d say, those two things are linked in that they do a great job because they earn a lot and they earn a lot because they do a great job – it’s entirely complementary. And they are licensed and that helps keep standards high. So, roll on the UK government’s decision to do the same here.
But what I noticed overall in chatting to real life realtors in queues, over breakfast and in bars is that they are a) dedicated, b) tireless in delivering 24/7 service, c) relentless in their thirst for learning and training and d) absorbing of anything that gives them an edge.
Here’s a few examples of how the Yanks beat us hands down:
• The coaching and training industry within the real estate space is massive. One leading performance coach I spoke to told me that his company alone had annual revenues of $300 million. And here’s a stat for you – those agents that have a coach, bank 18% more in fees than those that don’t.
• Lead generation is a big thing. I counted a dozen or so stands at the event representing firms that make their living from providing listing leads. It’s such a big thing that Keller Williams has invested millions of dollars in Command Campaign, a platform that builds social media ads, manages them and then nurtures output to maximise opportunities, all at just $2 a pop. Just try asking Google or Rightmove for leads at such rates.
• Referrals are big. Much of the lunch-line conversation is a bustle of agents liaising with each other to pass sellers and buyers to one another across each other’s territories. If you have a seller that’s buying somewhere else, or a buyer selling somewhere else, they collaborate and earn with (not from) each other. Fee splits are normal. Working together is too.
• Open houses with multiple pavement signs and ads are a standard fixture for all listings. What’s the point? Well, it’s not just to sell the home itself (you’ll have to dive a bit deeper into this for me to tell you more).
• Personal brand is something that we simply do not do in the UK, relying instead on either a faded shop front to bring people in or on increasingly expensive paid media. The Americans really, really understand the importance of promoting the individual as the agent, their expertise and their localism.
• The US industry is about building client relationships. Not just transactions. This should be obvious but in Blighty, it doesn’t seem so whereby the latter is focused upon and not the former.
• It’s undignified to talk about how much someone earns, unless that is you’re a US realtor whereby your annual GCI (Gross Commissionable Income) from which personal earnings are derived, is worn as an indicator of prowess – a badge of honour, if you will. It’s astonishing to chat to a broker for five minutes and for them to impart their GCI, their personal earnings, the amount of people in their database and their conversion metrics equated as MAs to listings and listings to completions. They know their numbers because they live by their numbers and improve because of them. To put this all into context, I spoke to Kyle from Albuquerque who earned $350,000 personally last year and Justine, a Brit in Oakland, California, who earned $750,000 last year. Yet they are of the same flesh and blood as you and I. The big difference apart from the resources that I am listing here: their mindset is simply bigger, more positive and more open-minded.
• Of course, they’re all self-employed. Because that’s how it is and because of the freedom and agility it gives them. It doesn’t faze them one bit.
It is a different world. An eye-opener for sure and it’s evident that in the UK we are, by comparison, backward. We are leaving stacks of cash on the table as a consequence of our apathy, our unwillingness to work harder and our inability to learn. Our limiting beliefs define and restrict us.
The 4,000 miles of ocean analogy? When the Americans want to cross it, they jump on a plane and do it in a few hours with their feet up in first class, champagne in hand. By comparison, we’re still using a sextant and the sun to navigate the Mary Rose to our destination because ‘that’s the way we’ve always done it’. The contrast in execution is astonishing and as is the earnings gap too, funnily enough.
You have to see it to believe it and, as it happens, next February’s Keller Williams worldwide event is in Las Vegas. If you want your eyes truly opened and your career horizon set somewhat higher than now, why don’t you come with me? It’s a bigger education than you’ll ever get from where you’re stuck right now.
*Russell Quirk is co-founder of Properganda PR and an investor and director at Keller Williams Plus