David DeVoe is taking his 32 agents and 10 staffers from Keller Williams to eXp Realty, and he believes “a wave” of other teams are likely to follow to suit.
The DeVoe Group, headquartered in Hoboken, New Jersey, closed $125 million in sales volume in 2018, operating seven teams in New Jersey. For DeVoe, the biggest reason for the switch was the money his agents could take home.
At Keller Williams, DeVoe said his agents had a $22,500 cap that’s paid to the local market center and Keller Williams International Realty, before they transitioned to taking home 100 percent of their commission.
“One of my agents capped a few months ago and I wanted to be excited for her, but I looked at the $22,500 and was like she doesn’t even know who the team leader is in the market center,” DeVoe said.
DeVoe told Inman he sat down with Keller Williams CEO Gary Keller and the company tried to make it work by offering to lower the cap, but ultimately, he was drawn to eXp Realty, after a conversation with someone else in the industry. He announced to move in a video on Facebook.
“Their compensation model works perfectly for us,” DeVoe told Inman. “We don’t have to worry about losing talented agents because they’re paying too high of a cap and they’re not taking home enough money.”
EXp Realty has a similar commission model and in DeVoe’s market, there’s a $16,000 cap. But that cap gets cut in half if you’re an agent on a team. Plus, when you’re an agent on a team the size of DeVoe’s, the cap is halved again to $4,000. It will take his brokers just two deals to start earning 100 percent of their commission, DeVoe added.
“The one thing about me – I always look, what’s the best outcome going to be for my people,” DeVoe said. “If I always focus on that, I’m going to be okay.”
DeVoe believes there will be a wave in the wake of his departure, with teams leaving Keller Williams for eXp Realty. Already following in his footsteps is The Sikora Group, also from New Jersey, which is bringing its nine agents and $45 million in transaction volume to Keller Williams.
DeVoe said he thinks the departures and Keller Williams current set up will start to lead in a decline in revenue and hurt the company’s popular profit-sharing model.
“Because they’re set up so heavily with brick and mortar and tons of salaries, expenses, dinners and lunches, what’s going to happen is their profit is going to get squashed and their profit share is going to be nothing,” DeVoe said. “That will crumble the culture they’ve built around that and people will need an answer.”
And DeVoe doesn’t believe Keller Williams recent heavy investment into technology is going to be that answer.
The DeVoe team has its own training, systems, lead generation, support and coaching structure in place, so DeVoe didn’t feel like he and the team were benefitting from their KW local market center.
He admitted the in-house KW technology that he’s seen is really good, but said he was concerned with how agents, teams and consumers will adopt it. He thinks Keller Williams is betting big that agents are going to leave their old tech behind and consumers are going to start using Keller Williams to search for homes instead of Redfin or Zillow (Keller Williams sources have previously told Inman that the company is launching a new, mobile-first consumer experience in the second quarter of 2019).
“We’ve got our own tech and most teams do,” DeVoe said. “We’re not interested in moving 75,000 consumers onto a new platform just because it does a few things cooler.”
In the leaked audio of a company meeting obtained by Inman earlier in the year, Keller bashed eXp Realty’s virtual world technology as, “old gaming technology.”
Keller Williams declined a request to comment on the move through a spokesperson.
Update: Updated to clarify eXp Realty cap structure.