Ariz. brokerage joins Keller Williams

Realty Executives says it will retain presence in market

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Editor’s note: See related story: "Should I stay or should I go?"

Tucson’s second-largest brokerage, Realty Executives Southern Arizona, is rebranding as a Keller Williams franchise, but Realty Executives expects 100 or more of the brokerage’s 324 agents won’t make the move.

Keller Williams Southern Arizona owner Anthony Azar told Inman News he’s spent the last 12 months researching every major franchisor in the U.S. and Canada, "looking for the right systems and tools to support our agents."

Keller Williams is "culturally a very good fit for us, because it’s an agent-centric company, which is very much what we have been at our former brand," he said. "The agents are considered to be the brand, and we support the agents in their growth … the agent is in effect our customer."

In a press release announcing the launch of Keller Williams Southern Arizona on Tuesday, Austin, Texas-based Keller Williams Realty Inc. said it’s opened 30 new franchises in the last year, growing its North American agent count by 3 percent, to 76,879.

"When I saw Keller Williams was the only (franchisor) growing and others were shrinking — some virtually collapsing — that was proof to me of the real efficacy of their system," Azar said. "Their per-agent productivity was up last year in one of the most difficult real estate markets ever seen."

Phoenix-based Realty Executives International Inc. has been losing franchises in the U.S. in recent years, according to Entrepreneur.com, which gathers statistics about franchises and other businesses.

The number of U.S.-based Realty Executives franchises declined from 736 in 2006 to 585 in 2008, Entrepreneur.com reported. During that period, the company added 22 Canadian franchises and 25 foreign franchises, for a total of 122 franchises outside the U.S., the site said.

Realty Executives CEO Glenn Melton acknowledged that "absolutely there’s been attrition," but said the company continues to recruit and convert small and mid-sized brokerages around the country with between 30 and 220 agents.

Realty Executives has a presence in Tucson that dates back to 1972, and will continue to operate in the market as Realty Executives Tucson, he said.

Realty Executives has already leased and furnished a Tucson office that was recently vacated by a large title insurance company, Melton said, and plans to open at least two more offices in coming weeks.

Tuesday’s announcement that Realty Executives Southern Arizona would rebrand as a Keller Williams franchise came as a surprise to both Realty Executives and the brokerage’s agents, Melton said. …CONTINUED

Based on what he has heard from agents, he expects that more than 100 will not make the switch to Keller Williams, and choose to take their listings to Realty Executives Tucson instead.

He said 85 of 90 agents at a Realty Executives brokerage in the Kansas City area that combined operations with a Keller Williams brokerage in January chose to remain with Realty Executives.

"I think that in both of these instances, the broker thought the (agents were their) property, that they could do what they wanted and take them with them, but the agents said no, we want to stay," Melton said.

He said agents staying with Realty Executives tend to be higher-performing, and many have been with the franchise for years.

"The thing that’s really special about this is the loyalty of the individual agents to the brand they’ve helped build in the last 37 years," Melton said.

Azar said he’s been thrilled by the "very positive reaction from our agent population, some of whom have been with Realty Executives for 30 years."

Speaking after a meeting where the announcement of the switch was made, Jay Papasan, vice president of publishing for Keller Williams, said "most of the people leaving the room today are wearing Keller Williams badges. There are people making a career decision, and we are treating them with respect."

Managers aboard for the switch to Keller Williams include Realty Executives Southern Arizona Chief Operating Officer Sue Cartun, who will serve as operations manager of the new organization, and managing broker Nancy Colvin, who has been named operations manager for the new Kolb La Playa office.

Karl Krentzel, an agent with Realty Executives Southern Arizona for the past six years, said the brokerage broke the news of the planned move to Keller Williams to its top-producing agents at a luncheon meeting Tuesday, followed by a company-wide meeting an hour and a half later.

Although Krentzel said he and some other agents had heard rumors that a change was in the works, the news came as a surprise to many. …CONTINUED

"I think the majority of the agents, I can’t speak for all of them, but the majority of the top-producing full-time agents I’ve worked with over the years were shocked and disappointed with the move," he said.

Many agents were initially under the impression that they had to make a decision within 48 hours whether to sign their licenses over to Keller Williams, Krentzel also said, which appeared to anger many.

Azar later sent out an e-mail telling agents they could have until March 31 to make a decision, Krentzel said.

When Realty Executives Phoenix got word of Azar’s plan to rebrand as Keller Williams, company executives reportedly moved to set up their own meeting with the brokerage’s agents at the same hotel that Azar and Keller Williams planned to brief agents, the Westin La Paloma, Krentzel said.

Word of the Realty Executives meeting spread by text message while Azar and Keller Williams were briefing agents around 3:30 p.m. Tuesday, Krentzel said, and about 30 to 40 agents left the Keller Williams meeting to attend.

Krentzel said the Realty Executives meeting was moved to a country club next door to the Westin La Paloma after management of Azar’s brokerage discovered it was taking place and objected.

Realty Executives President Rich Rector didn’t get word of the switch, and was escorted from the hotel by security when he showed up at the original meeting location, Krentzel said. Rector confirmed Krentzel’s account through a spokeswoman.

Krentzel said he thought the brokerage’s move to Keller Williams "was handled poorly," despite all good intentions. "I told Sue (Cartun) and (Azar) that this was going to cost them a ton of agents."

Krentzel counts himself among agents who will stay with Realty Executives, taking his listings to Realty Executives Tucson.

While he’s changed companies before, "I’ve never had a situation where the company I’m currently with changed brands altogether — this is new territory for me." Krentzel said he was confident Keller Williams would honor his contract with Azar’s brokerage and allow him to take his listings with him.

He intends to "keep his emotions between the lines" and "remain focused on my customers. I have a little phrase — in the hands of a less capable Realtor, this would be a problem," Krentzel said.

See related story: "Should I stay or should I go?"

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