Steve and Sylvia Leave Keller Williams – Go Independent Again
Sylvia and I are excited to announce that, as of today, we have reverted back to the business structure under which we operated from 1993 through 2004 as Crossland Real Estate. Sylvia is Broker and Head Honcho and I just do what she tells me. We are no longer with the Southwest Market Center of Keller Williams Austin. We are once again an independent, home grown Austin real estate company.
It’s been a great 4 years at Keller Williams and, as I was telling agents at the office today, I don’t believe that Sylvia and I would be the caliber of Realtors we’ve become had we not done our 4 year stint at Keller Williams.
The Southwest Market Center in Austin is the original, first Keller Williams office started by Gary Keller in the 1980s. It is the #1 real estate office in the world, on many different metrics, including number of sales and number of agents. It’s considered the flagship office of Keller Williams – the mother ship – and is the frequent host of tours for other Keller Williams market center staff from around the country who want to come see how we do it here in Austin.
Sylvia and I have enjoyed being a part of this amazing company and this office, and we especially enjoyed the honor of serving on the ALC (Agent Leadership Council) for the past two years, which is the body of top producing agents that runs the Southwest Market Center. I feel like, even though we both had a lot of experience as Realtors before we joined Keller Williams in 2005, we never would have received the type of training and exposure to ideas that we experienced at Keller Williams had we remained Mom and Pop forever and not ventured out to see what it would be like in a different environment.
So why the move? Why switch?
We’re tired, man. Frankly, it’s hard work operating at the level we’ve been at for the past few years. Non-Realtors may not know the real estate terminology of “Production”, or “Closed Volume”, or “Gross Commission Sales” (GCI), but Sylvia and I had what I think will be our career peak year last year in 2008, during a slow market, with just under $10M in closed transactions. That’s not anywhere close to what some of the elite, high production agents achieve across the U.S., but it’s a lot of sales, roughly 4 closings a month. It takes a lot of effort and energy to do that. We’re tired and want to slow down.
So, the plan is to continue building our investment portfolio of managed properties, and focus more on listings and less on buyers. That doesn’t mean we won’t help buyers – we love working with buyers – but we will scale back on the number of buyers we work with and we’ll be more picky about who we take on and less tolerant of tire kickers. When we’re running full tilt, we can each handle 5 to 10 buyers at a time. We’ll probably scale back to 1 or 2 at a time and refer the overflow leads to other agents.
The buyer side of the real estate business is at least twice as demanding as the listing side, especially the 4 to 6 hour days in the car in 100+ degree heat, in and out of houses. Only about 1 of 5 buyers that engage us end up buying, which is why we have to run so many at a time. And that’s actually a better ratio than most Realtors achieve. We’re pretty picky already, but still, it’s a numbers business and, as all productive Realtors know, you have to work your way through a lot of uncompensated time, effort and expense to get to the next buyer closing. And you unfortunately have to know when to cut people loose and when to remain patient. It’s not always an easy call, but you have to be able to make the call anyway.
So, from a strictly business decision standpoint, the time freed up by working with fewer buyers can be reallocated to handling more property management accounts and seeking more sales listings. We still run a fairly small boutique portfolio of managed properties, about 35 at present. That’s compared to almost 250 I handled in the early 2000s. We won’t grow to 250 “doors” again, but a target portfolio of about 75 is reasonably easy to handle and provides a more predictable and stable return on time invested than does an equal amount of time chasing down buyer leads and showing houses to people who aren’t really sure they even want to buy.
Finally, on a more personal note, we feel like we were getting sucked up into a more expensive lifestyle than we really need or desire. We both come from very frugal, low budget roots. My father was a tightwad Navy Officer who raised our family in a tiny, cheap house even though he could have afforded better. Sylvia’s mother was an artist and college art professor, so she didn’t grow up with lavish things either. As a young newlywed couple, Sylvia and I scraped by as I worked my way through college. I didn’t even own a vehicle less than 10 years old until I was 35 – not because I couldn’t buy one, but because I thought new cars were a waste of money. I still do, but I’ve bought four in a row over the past 11 years, justifying it by saying “I’m a Realtor, I need a nice newer car”. Yeah, I need a clean decent car, but not a new one every few years.
We know how to live cheap, save and build wealth, mostly through investing in rental properties, yet an increasing amount of the fruits our professional effort is going toward supporting a lifestyle that’s out of sync with our basic frugal values or needs. Think of us as “Cheapskates Gone Wild”.
It’s weird too how spending more just creeps up. How the ability to afford stuff creates a desire and an urge to have the stuff. In a reverse logic sort of way, which might not make sense to some, it’s more profitable to earn less in America, at a certain point. There is a cutoff at which, for most people, additional earnings result in a higher proportional increase in consumption and spending. It’s like a law of nature that takes over or something. Anyway, we’ll have more left over money, discretionary income, on half the revenue we’ve been generating. I know it sounds crazy, but it’s just how it works.
Also, I nearly got choked up the other day as I realized we have less than two years remaining living as a family of four. Our oldest daughter will be off to college in two years. My youngest will attend all 4 years of high school with no big sister at home, and there will then be just three of us. Four years later, it will be just me and Sylvia as our youngest heads to college also. Then what? Retire?
We don’t want to look back on these next 6 years and say “well, we finally cracked the $15M threshold in closed sales but hardly ever saw the kids”. No, that’s not what we want to remember as our primary focus or achievement.
So we’re setting aside more time for family and less time and effort toward selling real estate or trying to maintain ourselves as “top” agents in our office. And that’s very doable by simply getting back to basic living and the simple no frills business philosophy that we started with in the early 1990s. And it doesn’t mean your referrals and repeat business will receive anything less with regard to the quality of service we provide. You’ll just be one of fewer clients that we’re juggling.
Finally, I look forward to writing more later, in another blog, about what it looks like to be scaling back a fairly big and costly real estate business setup to something equally as effective but far less difficult to manage. We’ve now operated at both ends of the spectrum, and all points in between, as we’ve started, bought, sold, expanded, downsized and run our real estate business in various forms and setups over the past nearly 20 years.
We’re at present scaling down from spending more than $30K over the past 12 months with KW on commission splits ($18K), office rent ($6K), admin fees, copy fees, phones, etc. to a $30 per month mailbox at a postal shipping store and working again out of a home office and meeting clients at Starbucks, or wherever.
How’s that going to work?
Actually, pretty darn well. None of our listing clients ever even came to our office. Buyers did, often, but that can be worked around fairly easily, thanks to Starbucks, WiFi and something called a Laptop. The “officeless” way of doing business and the amazing tools available today make possible all sorts of things, and I look forward to writing more about the tools and services we use as Realtors that make having an expensive brick and mortar office, for us, now obsolete.