Founded in 1983, Keller Williams — the real estate franchisor claiming the largest real estate agent count in the world — is in many ways similar to some Americans born the year it began, the upstart millennials who see power in numbers and who believe technology efficiencies can change the world.
And like those millennials, the company is clearly growing into its own as it moves into its third decade of existence. Today, the franchisor reported its first quarter (Q1) 2017 financial results, stating that it broke three all-time productivity benchmarks in March of this year — in listings taken, listing volume taken and the volume in contracts written by Keller Williams agents.
KW does not report official earnings — neither top line revenue nor net income — so it is difficult to make apples-to-apples comparisons of its financial picture with other franchises. But these benchmarks could indicate that the company isn’t merely focused on bringing more agents aboard — it’s also helping those agents capture more listings, and more expensive listings at that.
Agent count
Don’t think that agent count is an afterthought, though — Keller Williams reported that its agent count surpassed 159,500 associates in Q1 2017, which the company says is “a net gain of 4,337 agents across the globe.”
“What’s really exciting about that number is what happens as we move toward a technology company,” said John Davis, Keller Williams’ CEO, in a conversation with Inman. “We really look at our agent count as our platform and what we mean by that is that all of our technology is driven and will be driven through our associate count, and what’s really great about that is as our industry is changing, we believe our growth is helping fortify our people.”
Sales metrics
The franchisor also reported increased transactions and sales volume. The sales volume of contracts written by Keller Williams agents in Q1 2017 was up 17.4 percentage points over Q1 2016, hitting a total of $73.7 billion in Q1.
That’s impressive, but in Q2 of last year, the company reported an almost 20-percentage-point growth in sales volume, and in Q4 it reported a 22-percentage-point jump in sales volume year-over-year — so although growth is good, the Q1 number is not the most impressive metric from the past 12 months.
The same truth applies to number of closed transactions.
The Q1 2017 growth rate is higher than Q3 2016, but both Q2 and Q4 last year reported growth rates in excess of 15 percent — so again, Q1’s numbers are good, but not earth-shattering.
“Our average sales price is up about 4.2 percent over this time last year,” Davis explained, noting that March 2017 units were up 15.4 percentage points over March 2016, while March 2017 sales volume was up 20.4 percentage points over March 2016.
“I think there are two good reasons for that,” Davis posted. “No. 1, we are attracting very productive agents, and no. 2, our value proposition with Dianna Kokoszka, who heads up our MAPS coaching division — her and her team are really going after production,” he explained.
And how about transactions per agent?
“On the number of closed units per agent, our median again ranges between seven and eight transactions per Keller Williams agent a year, a trend we saw hold in 2016 as our agent count continued to tick up dramatically,” said Darryl Frost, Keller Williams’ spokesperson.
“We’re actually outpacing our agent count growth in terms of production — listings sold, listing unit volume,” noted Davis.
The technology factor
This year at its annual Family Reunion conference, Keller Williams unveiled new technology endeavors — including the Keller Cloud, a “single platform to run your entire business,” and Kelle, the cloud’s voice-activated artificial intelligence (think Siri or Alexa).
And recent Keller Williams hires — including last year’s chief information officer appointment, Josh Team — show that the franchisor is putting its executive power where its mouth is when it comes to investing in agent technology.
Davis attributes some of the company’s successes to Gary Keller’s technology vision. “There are talented people who understand that’s where the industry is going,” he said, and those people want to work with a franchisor with quality technology.
Profit share
The profit share in Q1 2017 increased 22.4 percentage points over Q1 2016’s numbers; total profit share released was $29.0 million, according to Keller Williams.
And 94 percent of Keller Williams market centers were profitable at the end of Q1 2017, the company added.
“That profit share is culturally who we are,” Davis said. “The reason we have the growth that we have is we’re focused on our people making money, and we stand right alongside our associates, not in front and not behind. We want to make sure that we’re looking at what’s happening in the market right here and right now. ”
Q2 2017 outlook
The company will base its Q2 2017 outlook based on the following key performance indicators (KPIs) from Q1 2017 — these are all franchise results from the United States and Canada.
- Agents took 164,982 new listings (new market inventory), up 6.3 percent over Q1’ 16.
- Listings taken volume totaled $51.9 billion, up 10.0 percent over Q1’ 16.
- Agents wrote 260,569 contracts (projected closings), up 11.9 percent over Q1’ 16.
- Contracts written volume was $73.7 billion, up 17.4 percent over Q1’ 16.
“I am very proud of our associates, for what they’re doing and for funding their families; that’s why we’re all in business,” Davis concluded. “Keller Williams does not exist without its associates.”
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