In traditional real estate companies, owners are the ones who take most of the profits when agents close a deal. But Keller Williams Realty doesn’t believe in this culture. “To grow as a company, you have to reward those who have contributed”- Keller Williams Realty believes in this motto. This is why they have come up with the Keller Williams Profit Share model.
Keller Williams Profit Share system offers all its associates an opportunity for passive income by recruiting talented real estate agents and helping the company grow. All Keller Williams associates have the privilege to participate in the Profit Share program.
In this article, I am going to discuss what is Keller Williams Profit Share, why it works & how it helps new agents.
What is Keller Williams Profit Share?
In the traditional real estate companies, the agents pay a percentage of their business commission to their brokerage offices. These brokerages use this payment to pay their bills. After paying the bills, the leftover is the profit. In the case of traditional real estate companies, the owner invests in the business, so they keep all the profit.
But in the case of the Keller Williams Profit Share program, the Keller Williams Market Center shares its profit with the owners who invested in the business and the agents who are helping to grow the company. The owners receive a larger part of the split to pay their bills, but the associates also receive a significant percentage of profit.
As Keller Williams Realty is continuously expanding their operation outside of the United States and Canada, they have developed the Growth Share system similar to the Keller Williams Profit Share model. The main difference between the Growth Share and the Profit Share model is the money is going into the system rather than the Market Center.
The owners and associates will enjoy their financial reward of their real estate market region’s bottom-line.
The goal behind implementing these two systems was and still is – the profitability and productivity (sales) of the Keller Williams associates. In the real estate industry, the profit of the owner is important because they are the ones risking their money. Keeping that in mind, these systems were introduced to make a stable environment for agents where they can thrive.
When the associates thrive, they would tell others about the career opportunities where they are working and as a result, the company will grow. And with the growth of the company, the profit of the owner will also increase. And with the vision to grow their business, Keller Williams Realty decided to reward their associates who are responsible for the growth of the company.
How does Keller Williams Profit Sharing work?
The two systems: The Growth Share and the Profit Share, function under the same rules. Whenever a real estate agent joins Keller Williams, he or she names one person who primarily introduced him or her to the Keller Williams Realty, who had the most impact on their decision-making process in joining the Keller Williams Realty.
It may be someone from the same Keller Williams Market Center where he or she is joining or from some other district, state, province, country. The person’s name that the new agent will include in their application form is entirely his or her decision. This person will become the new Keller Williams associate’s sponsor.
Once the new agent registered his or her sponsor’s name, the sponsor will receive some part of the Market Center’s profit whenever the new agent closes a deal. So, if an agent closes a deal, and that Market Center is making a profit, a portion of that profit will go to the sponsors of that agent.
For the Keller Williams Growth Share model, when a Keller Williams associate outside of the United States and Canada real estate market has successfully closed a deal, a portion of his or her commission is paid to the franchisee. As a result, the agent’s sponsor can receive a portion of that commission as part of the Keller Williams Growth Share model from the company as a reward for his or her contribution towards the growth of the company.
This is a source of passive income for a sponsor other than his or her real estate business career. As mentioned before, both Keller Williams Growth Share and Keller Williams Profit Share function under the same rules. These two models reward seven levels of sponsors. They are:
|Level 1 Sponsor:||This type of sponsor is the individual who is directly involved for an associate to join the Keller Williams Realty or the person who a new associate included in his or her application form.|
|Level 2 Sponsor:||This individual is the level 1 sponsor’s sponsor.|
|Level 3 Sponsor:||This type of sponsor is the level 2 sponsor’s sponsor.|
|Level 4 Sponsor:||This individual is the level 3 sponsor’s sponsor.|
|Level 5 Sponsor:||He or she is the level 4 sponsor’s sponsor.|
|Level 6 Sponsor:||The level 5 sponsor’s sponsor is in this category.|
|Level 7 Sponsor:||This is the last sponsor level of the Keller Williams Profit Share or Growth Share model. In this category, the individuals are the level 6 sponsor’s sponsor.|
So, the sponsors not only benefit when some new Keller Williams associates name them as their direct sponsor, but they also have the opportunity to earn when the agent they have sponsored others- up to seven sponsor levels. The sponsor network grows like tree branches. This is why this network is called the Growth Share Tree or Profit Share Tree.
For both the Growth Share and Profit Share program, the profit is distributed among the sponsors depending on their sponsor level. The profit disbursement percentage among the sponsors is given below:
|Level 1 Sponsor||50%|
|Level 2 Sponsor||10%|
|Level 3 Sponsor||5%|
|Level 4 Sponsor||5%|
|Level 5 Sponsor||7.5%|
|Level 6 Sponsor||10%|
|Level 7 Sponsor||12.5%|
When agents close a deal, they give part of their commission to the Market Center office. The offices use 52% of that commission to pay the bills and as owners’ profit. The rest 48% is for the Profit Share program.
This means when an agent closes his or her deal and pays part of his commission, the 1st level sponsor will get 50% of that Profit Share program split. The second level sponsor will get 10% of that 48% profit share split, the 3rd level sponsor will get 5%, and so on.
If a Keller Williams associate works in the Keller Williams Realty for at least three years, he or she will be vested with the privilege of enjoying the passive income from the Keller Williams Profit Share or Growth Share system his entire life even if he retires.
Not only that, they will have the privilege to name a beneficiary to inherit their Profit Share income to their heirs. And all the associates of Keller Williams Realty have the opportunity to join the Keller Williams Profit Share or Keller Williams Growth Share program.
Is Keller Williams Profit Share a Pyramid scheme?
Now if you have understood how the Keller Williams Profit Share system works, you might think that it is somewhat similar to the infamous “Pyramid Scheme” or “Multi-Level Marketing (MLM)”. But this is not the case.
To understand how the Profit Share system is not a Pyramid Scheme, first, you need to know how the Pyramid Scheme works. In the Pyramid Scheme, participants recruit members to make money. The new members have to buy some sort of product or pay money to the recruiters.
The new members are told to scout and recruit new members. For each member they recruit, they will get a small percentage from the money they collect from new members. As the number of members increases, his or her commission will also increase.
You might think this is great for you, but the situation turns ugly once the number of new members starts to grow rapidly. Imagine dividing a Pyramid into some levels, where on the top the width is small compared to the bottom of the Pyramid.
On the top are the MLM (Multi-Level Marketing) business owners. At the bottom are the new members. The more we go down, the number of new members to recruit in order to make money increases.
If the business runs for a long time, eventually people will not be able to keep up with the recruitment rate. As a result, they will lose everything they had. Only those who are on the top of the Pyramid will be able to earn an enormous amount of money.
But in the case of the Keller Williams Profit Share system, sponsors will only be able to get their share when their sponsored agents are productive and the Market Center is profitable.
There is no cost involved or agents don’t have to buy anything as people do in the Pyramid scheme. Moreover, the Keller Williams Profit Share system has been running successfully for more than 30 years. Pyramid Schemes cannot run this long.
In short, the Keller Williams Profit Share is not a Pyramid Scheme. It is simply a program that was introduced to provide the Keller Williams associates a passive earning opportunity. It is simply a way to thank the Keller Williams associates for their contribution which helped Keller Williams Realty to become one of the most successful real estate companies in the world.
How can the Keller Williams Profit Share help new agents?
The Keller Williams Profit Share Program is a revolutionary system in the real estate industry. All the Keller Williams associates can take part in this program. The way Profit Share helps new agents are given below.
1. Offers a second source of income opportunity for agents.
The Keller Williams Profit share opens an entirely new passive income opportunity for agents. The more talented and productive agents they can sponsor, the more their passive income increases.
2. No extra effort or cost is required.
In the Profit Share system, agents don’t have to pay any fees or any sort of money. All you have to do is find a talented agent and tell him or her about career opportunities in Keller Williams Realty. Now effort or money is required for that.
3. Sustainable Wealth Building.
The Keller Williams Profit Share model was implemented to make the real estate business environment sustainable for agents, especially for new agents so that they can thrive in the real estate world.
The Keller Williams Profit Share model inspires agents to recruit talented agents and motivates them to grow together. Profit share is the easiest way to passive income in the real estate world. If agents can sponsor top-level agents in Keller Williams Realty, they are creating a financial opportunity for them from which they can earn a huge amount of money without doing anything thus building their wealth.
4. Real estate retirement plan.
If agents remain Keller William associates for at least three years, they will have the privilege to income from the Keller Williams Profit Share model for the rest of their lives. You can also pass on the rights of your passive income from your Profit Share tree to your heirs so don’t have any financial difficulties in the future. They will also have full rights to that income throughout their lifetime.
Keller Williams Profit Share- A brief history
The Keller Williams Profit Share model is the brainchild of the real estate industry legend Gary Keller. The main goal behind the profit-sharing culture of Keller Williams Realty is treating the Keller Williams agents like business partners with the owners of the Keller Williams brokerages and market centers rather than employees.
When Keller Williams Realty first started as a traditional real estate company in the late 1980s, they lost several of their top producing agents to their competitors. Gary Keller identified the reason behind their leaving as the better commission split offered by the rival real estate companies. This made him think, how he can keep hold of the top producing agents of his company.
As a result, in 1986, he and the first Associate Leadership Council joined forces together to reinvent Keller Williams Realty. They researched the market and different strategies used by the rival companies and came up with some revolutionary ideas that changed the real estate industry forever. The Keller Williams Profit Share system is one of them.
He launched the Keller Williams Profit Share system in 1987. By 1989, the system turned out to be a successful one that is still standing in the United States and Canada’s real estate industry.
His drive behind the profit share system was to find out how to build a real estate company where no agent will ever feel the need to leave Keller Williams Realty and offer a chance to prosper throughout their career in the real estate industry, even when they are retired.
Through the Keller Williams Profit Share system, he created a way to reward both the brokerage owners who are risking their investment and the Keller Williams agents who are helping Keller Williams Realty to grow.
To put the Keller Williams Profit Share system simply into words, it is a reward system where Keller Williams associates and Keller Williams owners are rewarded in accordance with their contribution to the growth of the company. Every day, agents meet many people in their line of business.
He or might meet someone who has some raw talent as a real estate agent and is interested in joining a real estate company.
If you meet people like that, all you have to do is introduce them to Keller Williams Realty and make them a Keller Williams associate. Now any time he or she closes a deal, a portion of the profit will be shared with the owners and the agent who sponsored him or her.
All the Keller Williams associates have the privilege to participate in the Keller Williams Profit Share program. It is a great way to generate passive income. Agents can also enjoy this passive income throughout their lifetime and even choose a beneficiary to inherit their earnings from the Keller Williams Profit Share program.
The Keller Williams Profit Share program is one of the reasons why Keller Williams Realty is one of the most successful companies in the real estate industry. Their unique business culture allows Keller Williams associates to actively engage in the growth of the company and reap financial rewards as a result.
Since the beginning, Keller Williams Realty has now become a multinational company. Each country has various laws and regulations. This is why Keller Williams Realty has introduced the Growth Share program for its associates outside of the United States and Canada. The Growth Share program is somewhat similar to the Keller Williams Profit Share program.
In the Growth Share system, when an agent outside of the United States and Canada real estate market has successfully closed a deal, a part of his or her commission is paid to the franchisee. As a result, the agent’s sponsor can receive a part of that commission as Growth Share from the company as a reward for bringing him or her to Keller Williams Realty.
The Keller Williams Profit Share and the Growth share program together make up the KW Wealth building platform. Any Keller Williams associate can participate in either of these programs. Through these programs, Keller Williams Realty has made the agents legitimate stakeholders rather than employees.
Since the introduction of the Keller Williams Profit Share program, Keller Williams Realty has shared about 1.2 billion USD with its associates and owners who helped the Keller Williams Company to grow and succeed.
After going through the entire article, you must’ve understood what is Keller Williams Profit Share, why it works & how it helps new agents.
This system has presented all the Keller Williams associates new or old, an opportunity to develop their wealth without wasting any money or time while Keller Williams Realty grows. Join Keller Williams and take your career to a new height of success.