An American franchise company says it is aiming to recruit 3,000 to 5,000 estate agents in the UK who will work in ‘super offices’.
Keller Williams launched in this country 18 months ago.
Visiting London at the weekend, Bill Soteroff, president of KW Worldwide, said that by agent numbers, Keller Williams is now the biggest property franchisor in the world.
He said it is larger than Century 21, Re/Max and Coldwell Banker.
The reason for this, he said, is that Keller Williams has an average of 164 agents in each office – which the firm calls “market centres”.
Century 21, he claimed, averages just over ten agents per outlet, while Re/Max averages just under ten, and Coldwell Baker averages four.
The Keller Williams plan is to have a large number of agents, but a relatively few number of offices. In the States, there are 133,000 agents working out of 710 market centres.
Soteroff said: “The goal is to open each market centre with at least 40 agents committed to it.”
In the UK, where there are now three market centres – two in London and one in Leeds – that goal has clearly not been reached in all offices, with some 90 agents now working from them.
Each market centre is run by a franchisee, who recruits freelance agents who may or may no, pay a desk fee and split their earnings 70:30 with the franchisor.
The agents also pay for training, coaching and IT.
When the market centre gets into profit, each agent gets to share the profitability. Agents make money from sales and also from referrals.
In the States, where Keller Williams began before it launched its crack at worldwide domination three years ago, the average fee earned per agent is 6% – 3% paid by both seller and buyer.
Were the UK’s low fees a concern before Keller Williams decided to enter the market? Apparently not, according to Soteroff, who says that worldwide, Keller Williams is currently growing at the rate of 2,000 agents per month.
American franchise models have not always done well in the UK. However, Soteroff says that the Keller Williams business model is not particularly American, adding: “I view the entry of Keller Williams into the UK as a success.”
Yesterday Keller Williams had 71 available properties listed on Rightmove, ranging from £340,000 to £3.8m, while the firm says that altogether it has over 140 properties for sale plus some rental stock.
Comments (7)
The Yank models come over but they leave the most important thing. The heart beat of US real estate is access to more listings and the ability to reach more buyers and prospective tenants via MLS (multi-listing) – with only a handful of stock they can’t supply greater demand.
KW, RE/Max/ C21 are only brands. The biggest thing the Yanks could bring would be mls and idx – plus great training.
I have experience of working with the US multi listing model. Find me a relator who will not say the system is rife with corruption and unlike the UK market has very little high street presence with most relators being part-time workers from home and split commission @5%.
What you are saying is you wish to help a business model that jeopardises the UK high street estate agent market. Now that’s a great solution for the consumer, pay more, get less service, increase corruption and full time unemployment. Isn’t that exactly the opposite to your rhetoric about fair trade laws etc?
Woodentop say’s; a business model that jeopardises the UK high street estate agent market.
No way. Things must have moved on. MLS compliments traditional US brokerages in Hg Streets to be able to work with none Hg Street brokerages and Realtors.
For the higher fee, agents get more (normally 5%-6%) and agents gain access to all local stock not just what they have. Vendors properties also reach bigger buyer lists.
Its a win win for all, apart from the budget agents who can’t afford to put splits back in due to low fees. As such, such budget agents can be lawfully excluded on a ‘you don’t trade with me, I don’t have to trade with you basis’
Zillow and Trulia are free. (Basically our RM and Z)
The business model is centred at making money for the Keller Williams at the expense of others. Sell a good idea, reap the benefit while others run around doing everything, who as they fall by the wayside are replaced by another just as gullible to keep the cogs working. How often have we seen this?
It is time all took a step back and look forward to the future, for what you see today is evolving and you are loosing control if people like this get their way. It is OK to preach consumer regulations/fair trading etc but that is so narrowed minded for these same policies can jeopardise your future adversely and that is precisely the intention of this business model? So many good companies in all industries have gone to the wall over what is best for the consumer being manipulated.
The dilemma for estate agents is the on-going catch up of the property boom, which floundered until some wise guy started to do the same as Keller with web portals in this country and being supported by clever TV marketing that an individual company cannot hope to compete with unless, they have £m’s …. enter hedge funding. …. all based on hopeful predictions, some fail, some don’t.
People need to take a hard look NOW at the future and spend the money where it is effective for them long term. Continue to support those that are assisting in your downfall is crazy. It is easy to say it will not work, but you are in the firing line until it falls apart and if it doesn’t, many will not be able to survive.
Are you advertising where your data is being sold to a competitor? Are you advertising where the cost are extortionate? Are you advertising where the company does not support you? Are you advertising where you have no say? Are you advertising where the competition is openly hell bent on putting you out of business? If the answer is yes, take a look in the mirror for you will not survive in business if you are not in control. Your future, your decision.
bit of a pyramid scheme – pay to join via training then self employed agents. Recruit more agents to join who pay to train and the introducer gets a referral fee. Of course the low fees wont matter to the parent company – they arn’t interested in selling houses just recruiting more agents.
Lost count of the stories over the years of US agents saying they are going to aggressively take on the UK market. Still looking for just one that has made a small dent.
Historically low fees are not a problem because KW is a training agency that pressures recruits into aggressive sales techniques via programmes such as Bold. If you can charge naive agents money for training, it doesn’t really matter what fees they contribute.