- Gary Gentry, Gary Keller and Joe Williams' first agent describes his first meeting with the two company co-founders.
- The tough Texas property market from 1984-1990 shaped the Keller Williams business model the industry sees today.
- Agents leaving for other brokerages in the mid 1980s led to Keller Williams implementing profit sharing.
Gentry had been a fast learner in a class Keller was teaching at Austin Community College and had interviewed with him at the firm he was at before setting up Keller Williams, JB Goodwin.
Gentry’s first impression of Keller: “I thought he was aggressive and brash — in a good way. He was very personable; it was obviously going to be an incredible education working with him. I walked out of there thinking if I went with this guy, I would learn this business.”
Of Joe Williams? “Joe was equally very likable and extremely personable,” said Gentry, who thought he was perhaps more of an extrovert than Gary.
Breaking the news
Gentry went home to tell his wife, Melonda (Mel), that he had committed to joining them.
She said: “Oh, great — what’s the name of the company?”
“I don’t think they have a name yet,” he answered.
She asked, “Well, do they have a sign?”
His logical response: “They can’t have a sign if they don’t have a name yet.”
It was October 1983. The President was Ronald Reagan. Real estate agents still wore suits.
The first to do a deal
Gentry was the first agent to do a deal at the brand new firm Keller Williams Realtors (now known as Keller Williams Realty International), having gone into real estate after a first career in hospital management.
It took a certain amount of hand-holding for the man who has long been one of KW’s top agents — he wrote up his first offer for $55,000 and it had complicated financing that doesn’t exist anymore, so he was happy to have Joe Williams’ support and put together the offer in Williams’ kitchen.
Gentry and his wife run The Gentry Group Realtors, based in Austin — Gentry is among the top 0.5 percent of real estate agents in the United States in closed sales volume.
In 2016, the Gentry Group closed $21.7 million in sales. The Keller Williams Southwest market center in Austin, where the Gentrys work, has been recognized as the no. 1 real estate office in the world in the number of properties sold for each of the last five years, according to Real Trends.
Growing into Keller Williams
Meanwhile, watching the person Gary Keller has grown into has been a journey on its own.
Keller was 26 when Gentry met him and turns 60 this year; he is today a well-known figure in the real estate industry and will be speaking to 150,000 plus agents and staff around the world at the annual Family Reunion held in February.
Although he is obviously an empire builder, Gentry still believes Keller is, at heart, a teacher. Which is not surprising — Keller’s father was a public school teacher and a superintendent of schools.
Education was a big part of the young firm even in the early days — Williams and Keller would run classes in the afternoons for their agents.
“They wanted to hear from their agents in their training,” said Gentry. “The brokers’ knowledge of the market comes if they listen well and communicate well with their agents. We would talk to Gary and Joe and say: ‘This is what we are seeing.’
“We would discuss things openly; it’s never been a top-down kind of thing for us, more bottom-up,” said Gentry.
Recession early on shapes Keller Williams’ business model
A big recession early on in Keller Williams’ life was formative of the business models it has today, said the agent.
“It was not fun at the time, but my wife and I are grateful now that toward the end of 1984 in Texas, we had the worst downturn I have experienced in my lifetime. It went from the end of 1984 to 1989.
“Those were tough, tough years in Texas because of the microchip industry and oil market going flat.”
It was worse than the sub-prime-mortgage-crisis-led recession of 2008, he said.
The result of these hard years can be seen in the Keller Williams business model today, Gentry believes.
It proved, “if my business at Keller Williams can be profitable in the worst of times then, it will be wildly profitable if you stick to the same models when you are in a boom economy — that has guided us through so many upticks and downturns,” he said.
The 1984 recession helped reinforce principles the company was founded on, of analyzing cost and revenue constantly, leading with revenue and having revenue before you expand, said Gentry.
“When you look at the structure of our market centers, that’s why we are the most profitable franchise,” he said.
“Our whole idea is if agents have a profitable business, then the company can be profitable,” he added.
Training on how to run a business
The management and agents identified early on that agents needed to have training in how to run a business successfully and profitably, said Gentry.
“A lot of people know how to sell a house, to work with a buyer, an investor, a builder — but if they don’t know how to run a successful business, to understand profit, how to spend money and get a return on investment, they won’t survive,” he said.
As basic as it sounds, there are very few public or private high schools or colleges that teach people how to run a business, how to be entrepreneurial, he said.
Keller Williams’ approach to providing agents with tech tools is typical of the way it approaches its business, said Gentry: “It’s the whole perspective that you need to remember that you work for the agents, and the top-level administration has always reinforced this.”
It’s that servant mentality, “Well, what do the agents want, what are the frustrations they are dealing with?”
Very frequently, agents are asked to brainstorm ideas.
“The tech group and other groups bounce ideas off us, asking what would work,” he said.
It’s one thing to spin off tech advances that are new and different, but it doesn’t work if agents don’t use it, he noted.
Change is good
Gentry remembers when the Keller Williams Associate Leadership Council decided that suits were no longer necessary in the late 1980s.
Gentry thinks the Keller Williams co-founders created an environment where change is a positive thing from the beginning.
“It’s one of the hardest things, change is naturally threatening but early on we continued to reinforce it to each other and others, that if you are not changing, you are atrophying because others who do change, will gain.”
You’ve got to adjust with the times — it can be fun, he said.
Gary Keller’s second mother
To get the full picture of what Keller Williams was like in the beginning, you have to talk to another founding agent of the organization — Althea Osborn, who joined the company in 1984 and works in the same office as Gentry.
Osborn started in real estate at the age of 48 and runs the Osborn Team there at the age of 82.
She says Austin brokerages at the time were falling over themselves to attract her because she had a nice car and a British accent.
And while the other brokerages were offering her enticements and leads, Keller was not.
“Gary had nothing to give; he was starting his own company. I remember him sitting in the office at a card table with a typewriter. But he was an incredible trainer, and he said: ‘I’m not going to give you fish; I will teach you how to fish.’
“I thought, ‘this young man is different.'”
The way Gary Keller tells it, he and Althea Osborn fought like cat and dog when they were starting out in the company together, but she became like his second mother.
Osborn would go the extra mile for him, literally. If she wanted to talk to him, she would get in his car and ride from Austin to Houston or wherever he was going so they could catch up uninterrupted.
From 1985 to the present, Osborn has been a top producer in Keller Williams throughout the Austin region. From 1993 to 1996, she served as the national top producer. Additionally, each year from 1997 to present, she has been selected to be a member of the prestigious Who’s Who in Austin Real Estate Elite 25.
Successful relocations are her specialty, and she has been a trainer since early on.
The birth of profit sharing
Like Gentry, Osborn has seen Keller Williams from its, at times, unsteady beginnings.
Osborn gives her version of how Keller Williams got into profit sharing largely as an agent retention tool.
“I remember Gary lost five agents to Re/Max. In 1987, he came to the decision we needed to put something in place, which would share the profit with the sales associates.
“It took me from 1987 to 1990 to realize that there might be something in it,” she said.
She remembers getting her first profit share check for $500 and thinking: “Oh my goodness, I think this might work.”
With her extensive agent networks and her late husband’s contribution, Osborn is now one of Keller Williams’ top profit-share recipients — she received more than $900,000 in profit share in 2016.
Osborn said she saw a change in agent behavior after the profit share structure was set up.
“Once profit share was implemented, everyone started to recruit. It was a situation where agents and brokers were working together to make it profitable instead of arguing over the same dollar.
“Every company was trying to get a better commission split while at Keller Williams you tried to get more for the company, and then everyone got a bit more. The mutual interdependence is very encouraging, it makes everybody help everybody — we all train each other,” she said.
The source of the profit share funds come from franchise owners, who give back approximately 47 percent of their profits to those agents who have helped the company grow.
At the same time as the profit share arrangement, the Associate Leadership Council also introduced its open book policy, something which other brokerages do today.
Explains Osborn: “Any agent can go in and find out how an office is doing, where the money going. The Associate Leadership Council helps run the finances of the offices; you get all the brains together working toward one goal rather than the show being run by the broker, who has their own interests at heart,” said Osborn.
The octogenarian says she has seen a change in the industry in terms of the age and gender since her early days.
“When I started real estate — there were probably more leading females than males. I was the right age to start then, but nowadays it’s young men and women. The ones building teams are mostly young men; there’s been a bit of swing of the pendulum.”
Training in Dallas recently, around 50 percent of the agents in the class were under 40, she said. “In my day they were all over 40,” she said.
And she thinks it’s evidence that real estate has become about more than being a salesperson.