Keller Williams Realty expands on expansion teams

With the rise of national brokerages and extremely profitable real estate team business models, the pioneer of the modern real estate team, Keller Williams Realty, has launched two new initiatives to push the team model even further. This article dives into details of each.
Authored by:
Paul Hagey
Published:
January 2022

The nation’s largest franchise brand by sales volume, transaction count and agent count Keller Williams Realty, became an industry juggernaut by systematizing and popularizing real estate teams, thanks in large part to company co-founder Gary Keller’s seminal 2003 book Millionaire Real Estate Agent.

Keller, a long-time iconic leader in the industry, continues to innovate. These two initiatives, along with his steady leadership over the last several years, catapulted him back into the seat of the industry’s most powerful real estate leader in 2022, as noted in the 2022 SP 200, published January 11 by T3 Sixty.

Gary Keller - SP 200

In 2021, Keller Williams launched two real estate team-focused initiatives to help the company adapt into the future. Both initiatives focus on expansion teams, which Keller Williams defines as any team doing business in more than one market.

With the rise of powerful national brokerages such as eXp Realty, which offers teams at its company the platform, brand and systems to easily expand across the nation, the relationship between brokerages and teams is being redefined.

In December, Keller Williams launched a national brokerage, the Keller Williams Expansion Network (KWEN), designed to streamline the growth and operations of real estate teams at Keller Williams Realty operating in more than one market. And, in October, it partnered with one of its expansion teams to launch a national mega team in Livian.

This article profiles the details of each.

Keller Williams Expansion Network

KWEN, which operates as “Keller Williams,” welcomed its first team in December. As of early January, the brokerage has four teams operating in the brokerage, covering 80 agents primarily in Texas, Ohio and Alabama. The brokerage is licensed in nearly 20 states.

Cody Gibson, who runs a KW expansion team himself in his Portland, Oregon-based United Home Group team, which now operates in 115 markets in 28 states and five countries, serves as KWEN’s director. KWEN is available to all expansion teams and agents at Keller Williams Realty. Currently, there are approximately 200 expansion teams with a total of 4,000 expansion agents, according to Gibson.

Cody Gibson, who runs a KW expansion team himself in his Portland, Oregon-based United Home Group team, which now operates in 115 markets in 28 states and five countries, serves as KWEN’s director. KWEN is available to all expansion teams and agents at Keller Williams Realty. Currently, there are approximately 200 expansion teams with a total of 4,000 expansion agents, according to Gibson.

KWEN gives Keller Williams Realty real estate team leaders who operate in more than one market a much simpler, streamlined way to operate and grow. For example, instead of adhering to the branding requirements and commission structure of each market center, with KWEN they have one national brand and logo, in Keller Williams, and a standard commission structure. Teams can brand their team as “powered by KW” or “brokered by KW,” in accordance with state regulations.

Teams with KWEN operate under two commission structures based on a hub-and-spoke model related to the market centers the expansion team connects with. The team’s hub is determined by the market center that houses the teams headquarters. The spokes are the locations in other markets. Here are how the structures break down for each:

  • Hub: the team operates under the terms of the commission structure set by the market center where the hub is headquartered.
  • Spoke: All agents operate on an 80/20 split with a $5,000 annual cap. Market centers receive $4,500 of that cap.

In addition, expansion team leaders and their management teams have a platform where they can see a unified view of all team performance metrics such as transaction flow, status and details in one view. For $65 per agent, they also get access to errors and omission insurance and the full Keller Williams Realty tech stack, which includes its Command CRM and other tools.

KWEN is currently licensed as a brokerage in 20 states. Gibson anticipates that KWEN will have brokerage licenses in at least 35 states by the end of the first quarter and all 50 states by the end of the second quarter. Currently focused on signing up KW expansion teams, KWEN will begin targeting teams from the industry at large at some point this year, he added.

Livian

In October 2021, KW launched Livian, in partnership with Keller Williams Realty expansion team Hergenrother Realty Group, to serve as a national expansion team, powered by a platform of team-focused services. Adam Hergenrother, who led the above team, now leads Livian as CEO.

Hergenrother worked diligently to build a Keller Williams Realty expansion team over the course of a decade. He built an expansion team his Burlington, Vermont-based team, and realized he had the infrastructure and lessons to power further growth for other teams as a mega team

This mega-team infrastructure includes:

  • HR staff
  • Coaching and training
  • Training
  • Financial office
  • Lead-generation platforms
  • Technology, including Command CRM by KW, BoomTown, QuickBooks and Airtable

With the systems, processes and technology in place, he recognized an opportunity to scale wildly up. This vision, in partnership with Keller Williams Realty, became Livian.

Livian targets productive teams doing approximately from $30 to $50 million in annual sales volume. These targets have solid businesses but have plateaued for one reason or another, whether it be the challenges of scaling, inflexible operational structures, or another foundational issue, Hergenrother told T3 Sixty. These teams may have profit margins of from 5 to 15 percent, but need some structure support to improve them; or they have high profit margins, but their leaders are overworked, stretched unsustainably thin.

Livian’s pitch to these teams: Double your profits in the next 12 to 18 months just by joining the Livian infrastructure. Livian has a target profit margin of 25 percent for all teams that join (which approximates the profit margin Hergenrother said his team – now Livian – achieved in 2021: 24.7 percent).

Livian is not a brokerage, but an expansion team powered by its specific platform of services, so the teams it brings on operate as “locations” who either hang their license with a market center or the KWEN in the state in which they operate. They still operate as relatively autonomous units. They use the Livian brand but can customize it with a name such as Livian | Keller Williams Heritage (a New Braunfels, Texas, location).

More than one Livian “location” can exist at each market center. Some do not join market centers at all, but instead join KWEN for the state they operate in. For those that join a market center, they operate under the financial terms of that center, including commission caps, etc., that other teams operate under. Each Livian “team” operates its own profit-and-loss statement and the leaders essentially lead their units as CEOs. In return for the infrastructure support, these Livian “teams” split their profits 50-50 with Livian, which covers all expenses.

As of press time in early January, Livian now has 32 locations with 310 agents on the platform.

Takeaway

Livian and KWEN provide different opportunities for entrepreneurial real estate team leaders to greatly expand and scale their businesses to match the opportunities and needs of the modern industry. As companies operate with more scale, bring more financial and technological resources to the table, teams, like brokerages, will need to get bigger to effectively compete in the near future. KW has responded. We expect others to continue to, too.

T3 Sixty – Trusted business advisors and management consultants.

Part of the T3 Sixty family of companies.

© T3 Sixty 2022. Enabling Intelligent Change.
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