Some Answers About KWRI’s Virtual Brokerage

On August 26, Rob Hahn, Founder of the blog, Notorious R.O.B, asked for some answers to his post “Some Questions About KWRI’s Virtual Brokerage.” I’m happy to oblige.

As a Market Center owner (Operating Principal) and one of the many architects of Keller Williams (KW) Expansion, I am committed to ensuring KWRI’s virtual brokerages are a win-win for both Market Centers and Expansion business owners. I will preface my responses by reminding everyone, that KW’s virtual brokerage model is still under construction. I don’t have any definite answers, nor does KWRI. What we do know is that the real estate industry is shifting and KWRI’s virtual brokerage will simply be another option for our Expansion business owners. In the following response, I will do my best to offer some insight on Rob’s questions and always welcome more discussion. You can reach me directly at

Who Actually Owns This Virtual Brokerage?

It’s been implied that KWRI will own the KWRI virtual brokerage. Not the Expansionists. Not franchise owners.

Who Does Oversight? 

This one is a little more complex, as KWRI is still working out the details.

First and foremost, the KWRI virtual brokerage will have a principal broker in each state. In addition, I think each Expansion business owner who plugs into the KWRI virtual brokerage could have their own managing broker. This might look a bit different depending on the size of the state. For example, in little ole’ Vermont, we may have one principal broker for the KWRI virtual brokerage and one managing broker that some number of Expansion businesses share. In larger or more complex states, we may have one principal broker, with each Expansion business working with their own managing broker to offer additional oversight and layers of protection for the brokerage, agents, and most importantly, the consumer.

It’s also important to note that the millions of dollars being invested into KWRI’s technology is already providing additional oversight with up to the minute data and reporting, real-time purchase and sale information, and daily compliance checks. The larger the team (by agent and transaction count) the more oversight and compliance needed, which often calls for a full-time specialist overseeing compliance and reviewing documentation. I would think an Expansion business owner would gladly make that hire. Not only will the KWRI virtual brokerages have a principal broker, in most cases, there could be a managing broker and compliance oversight as well. More oversight, not less.

Why Is This Good for Current Franchise Owners Again?

I think the biggest thing we need to clear up here, is that while KWRI virtual brokerages will take on the liability and oversight for the Expansion business owners, it is not being established as a competitor of Market Centers, nor will the virtual brokerages be profit centers.

The catalyst for the creation of KWRI virtual brokerages was for large Expansion business owners to be able to conduct business seamlessly and grow. The KWRI virtual brokerage caps (while perhaps smaller than what Market Centers are accustomed to), will be paid to the Market Center, not the virtual brokerage. Expansion business owners may pay a small fee to the virtual brokerage for their oversight, but they will still be paying company dollar to their local Market Center for utilizing all of the systems, models, training, and technology that KW Market Centers provide. Together, KWRI virtual brokerages and KW Market Centers retain KW market share.

Next Step in the Evolution of Real Estate

I also want to provide some clarity on teams vs Expansion businesses.

Rob writes:

Adam says that inside a Market Center you may have 200-300 agents, with 15 large teams with 20 team members each. So is he saying that Market Centers will now only “house” these Elite Agent Teams, collect nothing in the way of commissions splits, but get paid for the use of the physical space, and a platform to build off of?

Teams are here to stay in our industry, we know this. However, almost all teams are not Expansion teams/businesses, therefore those non-expansion teams will not have access to or need to use the KWRI virtual brokerage. If there end up being 40-50  teams in a Market Center, perhaps 5-15 of them could be Expansion businesses, the rest being local teams who have chosen not to expand. Some agents will join an Expansion business for their next opportunity, but the vast majority will definitely remain as single agent businesses. Agents will continue to do what is best for them, their career, and their business. KWRI virtual brokerages for Expansion business owners is simply another option.

Just as Keller Williams championed teams in the 90’s for those who wanted to build a sales business they are now championing Expansion for those who want to take their sales business to multiple locations. This isn’t new. KW started teaching and supporting Expansion almost seven years ago. The Virtual part was suggested almost three years ago by Ben Kinney and KW has been watching to see if it was necessary. It seems like it might be, thus they reopened the conversation.

As is typical of KW, they will ask lots of questions, engage lots of dialogues and feedback before moving forward. The culture of this company is alive and well. The real estate industry is under a serious restructure that is about to change the way consumers, vendors, business owners, and agents have “done” real estate. Keller Williams created Expansion over seven years ago. The real estate industry, and now the world at large, is ready for the next evolution in real estate. It’s our duty to our Market Center owners, our agents, Expansion business owners, and consumers to step up and deliver. Virtual brokerages are one solution to closing the gap.

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Adam Hergenrother

Adam Hergenrother is Founder and CEO of Adam Hergenrother Companies (which includes KW Vermont, Hergenrother Realty Group, BlackRock Construction, Adam Hergenrother Training, and Adam Hergenrother Foundation). In less than ten years, Adam has built this rapidly growing company through his commitment to thinking big and never giving up. Fearless and purposeful; unconventional and systematic, Adam sets a seemingly impossible goal then quickly gets to work on closing the gap to achieve it: no limits, no regrets. Adam is a featured real estate industry leader and annual guest speaker at several Keller Williams Realty conferences for his commitment to transforming the industry by building real estate teams without borders. In June 2018, Hergenrother Realty Group was named the #18 real estate team in the world by REAL Trends, as advertised in The Wall Street Journal. In 2017, BlackRock Construction was also named #42 on Inc. 5000, while #1 in Vermont and #1 in Construction throughout the US. In 2018, BlackRock Construction made the Inc. 5000 list for the second year in a row. Adam was also featured in Golf Digest Magazine in 2012 where he shared his story of business success through a focus on personal growth. In 2009, Hergenrother was awarded the prestigious “30 Under 30” award by The National Association of Realtors. Through Adam’s bold vision, Adam Hergenrother Companies is developing leaders and building businesses worldwide. Adam is a graduate of The University of Vermont. He lives in South Burlington, Vermont, with his wife and three young children.

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5 thoughts on “Some Answers About KWRI’s Virtual Brokerage”

  1. The messaging in the response to your questions is like its written from some compliance/analytical standpoint. Having been the TL at a large KW Market Center, the compliance issues are generally with the newer/less experienced agents and not generally with the teams.
    Selling this overlay of additional broker/compliance review for the OPs is not going to soften the company dollar loss from significantly lower caps in EBOs vs. KW MC’s. As an added bonus, you get to potentially house and provide the referenced services to the EBOs as well. The average agent and team (Non EBO) is thus competing for leads, services and space albeit on unequal financial terms. Certainly don’t see that as a win for them. I do not envy the OP and TL attempting to mediate the parties complaints about unfair treatment.
    Going to be interesting. The one thing Adam nails is that lots of discussions are going to occur BEFORE this gets anywhere close to rollout. The OPs have been crystal clear. You need to give us an audience and we need to be assured this is not going to ruin the Franchise I own.
    Stay tuned.

  2. TL = Team Leader, the person in charge for growing and managing the day to day operations of an office
    Managing Broker – not mentioned is the person responsible for state and Local compliance.
    OP = Operating Partner, the ownership groups person who’s role is to make sure the office is running properly to bring the results the ownership group desires (This is the TL’s boss)
    EBOs = Expansion Business Owners – these are the people that create a team in one market and then expand into other geographical expansion.
    MC = Market Center, KWs term for an office.

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