Keller Williams has announced plans to expand into the virtual brokerage space through its fleet of nearly 200 expansion businesses, the real estate franchise’s chief executive confirmed with Inman on Monday. The move comes at a time when virtual brokerages like eXp Realty and Real are widening their influence in the industry.
During last week’s Keller Williams Mega Camp, a company retreat for select Keller Williams leaders, Keller Williams CEO John Davis said the new business model will be available to 166 expansion businesses, representing 509 locations and 3,433 real estate agents. Expansion businesses closed 42,218 transactions in 2017, representing $12 billion in sales volume.
“What we’re seeing with our technology, what we’re seeing with our innovation, we’re preparing for the next 15-20 years down the road, and we’re really excited that technology is allowing us to do this,” Davis told Inman, when reached by phone on Monday. “We couldn’t be more thrilled with everything that’s going on.”
The expansion business is for agents that have “mastered their local market,” and allows them to scale across to different market centers, states and international borders, according to Keller Williams’ website.
Launching the virtual brokerage for expansion businesses will alleviate any challenges that hinder their success and allow those business owners to far exceed the success they have already achieved at Keller Williams, according to spokesman Darryl Frost.
Keller Williams will launch a virtual brokerage in each state, giving the expansion business owners an all-in-one virtual platform from which to operate. As part of the expansion bid, Davis said it’s important for Keller Williams to ensure its market centers — what Keller Williams calls its brick-and-mortar offices — get some sort of economic opportunity and benefit from the virtual brokerage.
“What the virtual brokerage allows [expansion business owners] to do, is there will be one system,” Davis said. “So they don’t have to go, ‘if this market center has these sets of rules and this market center has these sets of rules and this market center three different rules — this allows them to streamline, it allows them to be efficient with their expenses, it allows them to be efficient with their decision making.”
“Basically what it does, is it allows them to ensure that what happens economically is fair, and they know they’re building on solid ground cause they’ll know what the guidelines are for expansion throughout the state,” Davis added.
Details on the actual form that the virtual brokerage will take are still in the planning stages, according to Frost, who called the virtual brokerage concept an, “evolution of plans we’ve been considering for over a decade.”
Adam Hergenrother, CEO of Hergenrother Enterprises — which includes Keller Williams Realty Vermont and Hergenrother Realty Group — wrote, on his personal blog, about the announcement and its implications for Keller Williams expansion businesses.
“In order to stay competitive and at the top of the industry, we needed to make a global change to the Expansion model,” writes Hergenrother. “Enter virtual brokerages.”
Hergenrother expanded on Davis’ sentiments, saying expansion businesses are currently locked into individual market centers — which often requires expansion businesses to have a different logo, rules, signs, websites, etc., in each grid they are associated with.
“In some states, that can be 15-20 market centers,” Hergenrother wrote. “The branding complexities alone, not to mention the additional costs, are incredibly challenging especially as expansion teams are scaling and building a massive company within a company.”
Davis confirmed to Inman that Keller Williams would be setting the virtual brokerages up in each state and providing all of the technological support.
Keller Williams will hardly be alone in the virtual space. EXp Realty is a virtual brokerage where agents train and interact on a cloud campus. EXp — which crossed a $1 billion market cap on its first day of trading in May 2018 — has grown significantly in the past year, posting a more than 200 percent increase in revenue, transactions and sales volume year-over-year in the second quarter of 2018.
Keller Williams virtual brokerage will be launching in the United States and Canada initially, however Frost confirmed the company is talking to worldwide regions to determine what the model might look like from a global perspective.