A prominent Keller Williams franchisee and the CEO of multiple Texas-based Keller Williams offices has dropped her sexual misconduct lawsuit against Keller Williams, Gary Keller and others.
Inga Dow, the CEO of Keller Williams Realty Fort Worth and Keller Williams Realty Johnson County in Texas, filed a notice on Monday in the U.S. District Court for Northern Texas in Fort Worth dismissing all her claims against all defendants in the suit except former Keller Williams CEO John Davis.
Davis still faces claims of tortious interference and breach of fiduciary duty.
In her amended complaint filed in late March 2022, Dow alleged that she had endured years of sexual misconduct, harassment and abuse at Davis’s hands and that Keller Williams did nothing to address the behaviors and punished her for reporting it.
Additionally, the complaint alleged an overall culture at Keller Williams that encouraged female employees “to do whatever it took to make sales and ‘get along’ with top performers to keep them happy,” including performing “sexual favors or acts for male counterparts and/or top clients.”
In the complaint, Dow also claimed that Davis demanded sex from her on multiple occasions and that she felt “she had no choice but to acquiesce, because Davis was backed and supported by Keller, CEO and Founder of KWRI, which gave Davis a high degree of power within KWRI.” When Dow resisted Davis’ alleged advances, she claims that he retaliated by delaying her application to open a market center in Johnson County.
The complaint named fellow market center owner David Osborn, KW regional director Smokey Garrett, and Go Management, the company that runs KW’s Fort Worth regional office, as additional defendants.
The lawsuit contained 11-counts against Keller Williams and Go Management. In September 2022, the court ordered all of Dow’s claims, except those against Davis, into arbitration.
On Tuesday, Davis filed a motion to re-open the case, which was stayed last year due to the arbitration. Due to the stay, Davis’ motions to dismiss the suit and strike “all immaterial, impertinent and scandalous matter from the Original Complaint and First Amended Complaint,” which were filed in early April 2022, have yet to be ruled upon.
“We intend to and are eager to move forward with our case,” Paul Omodt, a spokesperson for Davis, wrote in an email. “Our claims and counterclaims are still pending and we will see them through. The truth matters — and we will eager to share the truth with the court. “
In the fall of 2022, Davis filed his own lawsuit against Keller Williams, Keller and Josh Team, prompted by his desire to “restore his reputation and clear his good name” in light to Dow’s sexual misconduct allegations.
According to the initial complaint, Davis resigned from his position at Keller Williams in January 2019 due to a disagreement with Keller over a business strategy that he felt would hurt the income generated by Keller Williams offices.
In response to his resignation, Davis alleged that Keller and Team smeared him and withheld Inga Dow’s accusations of sexual misconduct from him as he was negotiating the sale of his KW market center regions following his resignation. This resulted in tens of millions in financial losses, according to Davis.
In March, Colleen and Bart Basinski, former Keller Williams Market Center owners in Illinois and Indiana, and partial owners of a third Market Center in Southern California, filed their own lawsuit against KW, Keller and other top brokerage executives, alleging that they faced constant pressure from Keller executives and regional directors to alter their business operations, despite parameters set up in their franchise agreement, and adhere to Keller’s plans to lower Market Center caps in 2020.
In late August 2023, Davis filed a racketeering lawsuit against Keller Williams and Keller, alleging that the defendants inflated key profitability metrics including company sales and profits to convince individuals to purchase Keller Williams Regions and Market Centers.
Keller Williams declined to comment on the dismissal of Dow’s suit.
Looking to build wealth with the best income-generating assets? As you set out on the path to financial freedom, understanding the different types of income-generating assets can truly change your life. This is because you can invest in assets that will generate you income, earning you more passive income. Today’s article will introduce you to…
Looking to build wealth with the best income-generating assets?
As you set out on the path to financial freedom, understanding the different types of income-generating assets can truly change your life.
This is because you can invest in assets that will generate you income, earning you more passive income.
Today’s article will introduce you to a range of assets that reliably bring in cash, giving you peace of mind and the freedom to live life on your own terms.
From traditional investments like stocks and bonds to more creative options like peer-to-peer lending or real estate, income-generating assets give you the power to diversify your portfolio and build wealth over time.
Related content:
What are income generating assets?
Before we begin, I want to talk about the basics on income-generating assets, in case you are new to the subject or if you want a background first.
Income-generating assets are investments that, as the name suggests, generate income for you. These are assets that provide you with a steady cash flow, allowing you to earn passive income and build your wealth over time.
Examples include rental real estate and dividend-paying stocks (we will go over 17 different types of income-generating assets below in more detail).
There are several benefits of the best income-generating assets such as:
Passive income: You earn money without actively working, and this can provide financial freedom and the ability to focus on other things in life. You can earn money in your sleep, while on vacation, making dinner, and more.
Diversification: You can diversify your investments so that all of your income is not coming from just one source.
Wealth building: Earning income and generating a steady cash flow can help you build your wealth over time.
Note: Please keep in mind that there is no one-size-fits-all approach when investing in any of these income-producing assets. Everyone is different and while one asset may work great for someone, it may not be the right asset for you. I recommend doing as much research as you can if you are interested in one of the asset investments I talk about below.
Types Of Income Generating Assets
There are many types of income-generating assets. Some may be more traditional such as dividend-paying stocks, and others may be more alternative income-generating assets, such as selling stock photos, and even renting out your driveway.
Today, I will talk about 17 different types of income-generating assets, but this is not a full list of the best income-producing assets. There are many, many more!
The different types of income-generating assets that I will talk about today include:
1. Dividend-paying stocks
One of the best assets to invest in are dividend-paying stocks.
Dividends are simply a payment in cash or stock that public companies distribute to their shareholders.
The amount of a dividend is determined by a company’s board of directors, and they are given as a way to reward those who have stock in their company. Both private and public companies pay dividends, but not all companies pay dividends.
How do dividends work? If you own shares of a dividend-paying stock, then a dividend is paid per share of that stock. So, if you have 10 shares in Company ABC, and they pay $5 in cash dividends each year, then you will get $50 in dividends that year. While dividends can be paid on a monthly, quarterly, or yearly basis, they are most commonly paid out quarterly — so, four times a year. In this example, the $5 in cash dividends the company pays each year will most likely be distributed as $1.25 per quarter for each share of stock.
The most common type of dividends are cash dividends. Shareholders may choose to get this deposited right into their brokerage account. Stock dividends are another common type of dividend. In this case, shareholders get extra shares of stock instead of cash.
Both cash dividends and stock dividends are great income-generating assets that will earn more money for you.
As a shareholder, you can earn income when companies distribute profits to their shareholders. Look for stocks with a history of consistent dividend payouts and a high dividend yield. Keep in mind that dividend stocks are still subject to market fluctuations, and just because a company has paid a dividend in the past does not mean that they always will in the future.
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2. High-yield savings accounts and CDs
High-yield savings accounts and CDs are a great way to grow your savings, but most people have their money in accounts with low rates. Unfortunately, that means many of you are losing out on some easy money.
Savings accounts at brick-and-mortar banks are known for having really low interest rates. That’s because they have a much higher overhead — paying for the building, paying the tellers to help you in person at the bank, etc.
High-yield savings accounts offer an easy option for earning interest on your cash. Online banks often offer higher interest rates than traditional banks. As of the writing of this blog post, you can easily find high-yield savings accounts that can earn you above 4.00%.
Certificates of Deposit (CDs), another form of income-generating assets, are FDIC insured and provide a guaranteed interest rate over a specific term. Remember that access to your money is limited during the term of the CD. You will agree upon the term before putting your money in the CD. The terms typically vary in length from around 3 months to 5 years.
Money market accounts are also offered by banks and often with a higher yield than other types of savings accounts.
3. Real estate
Real estate is one of the most common income-generating assets that people think of.
Investing in rental properties is a popular way to generate steady cash flow. You can earn rental income from tenants, and properties typically appreciate in value over time.
Location and property management are important factors that can impact your return on investment.
By investing in real estate, you may be investing in residential properties, commercial real estate, short-term rentals, REITs, and more.
Recommended reading: How This Woman In Her 30s Owns 7 Rental Homes
4. Real estate investment trusts (REITs)
An REIT is a company that owns and manages income-producing real estate. They then sell shares to investors like stock.
By investing in REITs, you can make money in the real estate market without actually owning real estate.
So, if you don’t want to be a landlord, then this may be something for you to look into. This makes it much more passive than actually owning real estate and having to manage it.
You can even diversify your income stream with REITs by investing in different property types, such as residential homes, commercial office space, industrial, and retail store properties.
5. Bonds
Bonds are fixed-income investments that are issued by governments and companies. If you own a bond, you receive interest payments from borrowers on a regular basis.
An easy way to explain this is: When you buy a bond, you are giving someone a loan and they are agreeing to pay you back with interest.
Bonds with higher credit ratings are generally a safer investment but may offer lower interest rates.
6. Mutual funds
Mutual funds gather funds from investors to invest in stocks, bonds, or other securities. Basically, the funds are pooled together and there’s a fund manager who chooses the best investments.
Income-generating assets like this have multiple types of mutual funds available for multiple types of investors. Some of these fund types include bond funds, stock funds, balanced funds, and index funds.
Mutual funds typically have higher fees because they have fund managers who are actively trying to beat the market.
With a mutual fund, you get diversification because the fund manager mixes the assets in it.
7. Index funds and exchange-traded funds (ETFs)
ETFs and index funds are popular options for those who are looking to diversify their portfolio of income-generating assets.
This is because index funds and ETFs track a specific market index and invest in a wide range of stocks or other assets, instead of picking and choosing stocks in an attempt to beat the market. This is what makes them different from mutual funds.
They often have lower fees and higher diversification compared to actively managed funds.
8. Annuities
Annuities are long-term investments offered by insurance companies that give you a guaranteed income stream to build wealth. In exchange for a lump-sum payment or periodic contributions (such as monthly or annually), you’ll receive steady payments in the future.
The way it works is you pay premiums into the annuity for a set amount of time. Later, you stop paying premiums, and the annuity starts sending regular payments to you. Some are even set up to pay you back with a lump sum.
Annuities can be fixed or variable. A fixed annuity offers a guaranteed payment amount — which means a predictable income for you. As for a variable annuity, the payment amount does vary, depending on how the market is doing.
9. Websites and blogs
Starting a website can generate income through the money-making assets of advertising, affiliate marketing, or the sale of products and services.
Since I started Making Sense of Cents, I have earned over $5,000,000 from my blog through affiliate marketing, sponsored partnerships, display advertising, and online courses. These income-generating assets make sense for building wealth.
Blogging allows me to travel as much as I want, have a flexible schedule — and I earn a great income doing it.
Now, it’s not entirely passive, but I do earn semi-passive income from my blog.
You can learn how to start a blog in my How To Start a Blog FREE Course.
Here’s a quick outline of what you will learn:
Day 1: Why you should start a blog
Day 2: How to decide what to write about (your blog niche!)
Day 3: How to create your blog (in this lesson, you will learn how to start a blog on WordPress)
Day 4: The different ways to make money with your blog
Day 5: My advice for making passive income with your blog
Day 6: How to get pageviews
Day 7: Other blogging tips to help you see success
Recommended reading: The 25 Most-Asked Blogging Questions To Get You Started Today
10. Royalties and intellectual property
Intellectual property, such as patents, copyrights, and trademarks, can generate income through licensing fees or royalties. This particular option is good for creative professionals, such as authors, musicians, and inventors, who are looking for income-generating assets.
Royalties are a way to earn income from your creative work or intellectual property. By granting others permission to use or distribute your intellectual property, you can receive ongoing payments known as royalties.
Whether you’re a musician, author, inventor, or artist, royalties offer a passive income stream as your creations continue to generate revenue over time.
Royalties can be paid out periodically or as a lump sum on these passive income assets, depending on your agreement with the licensee.
11. Stock photos
If you have a talent for photography, you can monetize your skills by selling stock photos on platforms such as Shutterstock or Adobe Stock. The more high-quality images you upload, the more potential passive income you can generate.
With stock photography, you simply upload photos that you have taken to a platform such as DepositPhotos, turning your pictures into income-generating assets. Then, you will receive a commission whenever someone buys one of your stock photos.
Stock photos are used for all sorts of reasons by websites, companies, blogs, and more. Businesses need stock photos because they are not usually in the business of taking photos of everything that they need. Instead, they can use stock photos to make their content, website, or business more visually appealing.
Some examples of stock photography include pictures of:
Travel, vacations, landmarks, outdoor adventures
Family members, such as parents, children, family gatherings
Food and drink
Cars, boats, RVs
Businesses, pictures of people in meetings, in an office.
Sports, professional events
Animals, such as household pets or wildlife
The photo possibilities are almost endless for this type of income-generating asset.
Recommended reading: 18 Ways You Can Get Paid To Take Pictures
12. Crowdfunding and peer-to-peer lending
Crowdfunding platforms enable you to invest in real estate deals with a smaller amount of money than buying real estate up front, giving you a passive income through rental income or even a property increasing in value.
Peer-to-peer lending platforms allow you to lend money directly to borrowers. Typically you can earn higher returns than traditional savings accounts, though there’s always the risk of a borrower not paying you back.
Both of these types of assets — crowdfunding and peer-to-peer lending — use technology to connect investors with those looking for funding.
13. Renting out storage space
If you own unused land or unused space in your home, renting it out for storage can be a simple way to generate passive income.
You can offer storage solutions for vehicles or boats. If you have a smaller space, then offer it to store personal belongings. You can rent out your driveway, closet, basement, attic, and more. You can even rent out a shelf.
A website where you can list your storage space is Neighbor. You can earn $100 to $400+ each month on this platform. This depends on the demand in your area and the type of income-generating assets you are renting out. And, you can choose who, what, and when — who to rent to, what things are stored, and when it will happen.
You can learn more at Neighbor Review: Make Money Renting Your Storage Space.
14. Short-term rentals
Short-term rentals can be a lucrative income-generating asset if you own properties in popular tourist destinations or business hubs.
Websites like Airbnb provide a platform to rent out your property to travelers for short periods, potentially generating higher returns than traditional long-term leases.
Furnished Finder is another website for short-term rentals. This is a way to connect with travel nurses in need of short-term housing.
Keep in mind that rental income can be affected by local regulations, potential vacancies, or seasonal fluctuations.
15. Car rentals
Car rental platforms like Turo allow you to rent out your car when you’re not using it. Assets that generate cash flow include your own wheels, and that means no significant initial investment besides the cost of the car you already own.
Be mindful of risks such as wear and tear, insurance, and potential damage caused by renters.
It’s an affordable alternative to traditional rental car companies for customers, and it’s a good way to make money if you’re already working from home and don’t need your car, or are a two-car household.
Turo is one of a few different places to rent out your car, turning your vehicle into one of your income-generating assets. Your car is covered by Turo with up to a $1 million insurance policy. You can also pick the dates for when your car is available and set your rates.
Turo says you can earn an average of $706 per month by listing your car on their site.
16. RV rentals
Similarly to car rentals, RV rentals can provide additional income by renting out your recreational vehicle when you’re not using it. Your RV could easily become one of your income-generating assets.
You may be able to earn $100 to $300 a day, or even more, by renting out your RV on RVShare.
If you have an RV that is just sitting there and not being used, then you may be able to earn an income with it by renting it out to others who are interested in RVing. Cash flow-generating assets like RVs are a win-win for both you and the renter who wants to experience life in a recreational vehicle.
You can learn more at How To Make Extra Money By Renting Out Your RV.
17. Vending machines
With a vending machine business, you can generate income by selling a variety of products, from food to fishing supplies, beauty products to baby items, and more.
You may be able to earn $1,000+ a month by running a vending machine business. That’s enough reason to take a closer look at income-producing assets like this.
You can learn more at How To Start A Vending Machine Business – How I Make $7,000 Monthly.
Questions about income generating assets
Here are common questions that you may have about income-generating assets:
How do I start passive income from nothing?
Starting passive income from nothing requires creativity and resourcefulness. You can begin by identifying skills you possess or interests that can be turned into income-generating opportunities.
What are the assets that generate income?
The assets I talked about above include:
Dividend-paying stocks and stock market investing
High-yield savings accounts and CDs
Real estate
Bonds
Mutual funds
Index funds and exchange-traded funds
Annuities
Websites and online businesses
Royalties and intellectual property
Stock photos
Crowdfunding and peer-to-peer lending
Renting out your storage space
Car rentals
RV rentals
Vending machines
How do I start buying income generating assets?
There are traditional investments or more creative options. Do as much research as you can before deciding which option fits you best.
What are good assets to buy?
After deciding if you want to purchase traditional investments or more creative options, choose an asset that you can afford and best fits your lifestyle.
What are the best assets to buy for beginners?
For beginners seeking income-generating assets, you may want to look into:
Dividend-paying stocks for your investment portfolio
Crowdfunded real estate investing: Platforms like Fundrise allow smaller investments with lower risk exposure.
ETFs and index funds: They provide diversification and passive income through dividends.
What is income generating real estate?
Income-generating real estate refers to properties that produce regular rental income, such as apartments, commercial properties, or short-term vacation rentals.
How do I start passive income in real estate?
There are a few ways that you can earn passive income from real estate, including:
Buying a property, such as an apartment building or duplex, and renting it out to tenants
Using real estate crowdfunding platforms
Investing in REITs
How to make passive income with real estate without owning property?
You don’t need to actually own property in order to make money with real estate. Instead, you can earn passive income from real estate by investing in REITs and using real estate crowdfunding platforms.
This is an option for those who want to be diversified with their income-generating assets but don’t want to spend all of their money or time on a single piece of real estate.
How to make $1,000 a day in passive income?
Making $1,000 a day in passive income with assets that produce income will not be easy. If it were easy, then everyone would be doing it, after all.
Making $1,000 a day in passive income may require a large amount of money up front, diversifying into different assets mentioned above, and lots of patience from you because it will take time to make that kind of money.
You may want to start off by focusing on building multiple income streams and reinvesting your profits as you earn them.
What to think about before investing in income producing assets?
There are many different things to think about when it comes to income-generating assets. You want to find the best assets to invest your money in that will also be the best fit for you.
Remember, as I said at the beginning of this article, not everything will be applicable to everyone. Everyone is different! You may prefer to create a stock photo portfolio and hate real estate, whereas someone else may really enjoy being a real estate investor — or it may even be the other way around.
Here are some of my tips if you are interested in income-generating assets:
Do your research and talk to experts —I recommend researching as much as you can on the asset you are interested in. And, if you still have questions, don’t be afraid to talk to an expert.
Diversify — One of the important parts of building a successful income-generating portfolio is finding ways to be diversified.
Think about the risks —When making money, there’s usually some sort of risk. I recommend evaluating the risks and seeing what you are comfortable with.
What are the best books on income generating assets?
Some highly recommended books on income-generating assets include:
The Simple Path to Wealth by JL Collins
The Millionaire Real Estate Investor by Gary Keller
The Little Book of Common Sense Investing by John C. Bogle
Income Generating Assets — Summary
I hope you enjoyed this article on the best income-generating assets. As you learned, there are many different types of assets that you can invest in so that you can earn an income.
The best income-producing assets, if they’re right for you, can truly change your life.
With these assets, you can build wealth through a reliable passive income, giving you peace of mind and freedom to live life on your own terms.
Are you looking to build income-generating assets? What are your favorite ways?
At the height of the Great Depression In 1932, Ole Kirk Christiansen, a Danish carpenter, had fallen on hard times. With few jobs available, he began crafting wooden toys in his workshop to make ends meet for his wife and three boys. It was a humble beginning for what would become one of the most iconic and beloved brands by people all over the world.
In the early years, the company produced a wide variety of dozens of wooden toys—yo-yos, model airplanes, toy trucks. But after a factory fire destroyed their wood supply and production facilities, the company began experimenting with a new type of material — plastic. Two years later, a simple and versatile “automatic binding brick” was born with great success.
By the 1950s, the company began narrowing its focus, discontinuing non-brick toys until only the little plastic brick remained as its core product. It was this pivotal decision that laid the foundation for building a toy empire.
Those tiny plastic bricks became the ubiquitous toy that kids played with and parents stepped on for decades to come.
By honing in on its most popular core product, Lego was able to rise from being an “all size fits no one” company, to a toy empire that provides fun and familiarity for kids to build and create.
Within these blocks lies a big lesson for Realtors and teams — focus.
To achieve endless success, Lego discovered that its iconic bricks were all it needed to succeed, and Realtors must apply the same logic, finding motivated people to serve is the product.
Each week, I meet with the most successful Realtors in the nation. What I find separates the good from the most wildly profitable and helpful, is their flirtation with that tempting mistress— distraction. In a noisy industry full of pandering proptechs, influencer marketing, costly seminars and TikTok, it’s hard to be Lego.
The successful teams that are often trying to break through the messy middle, always tell me that ‘selling real estate is simple’. But when it comes to leading people, I find that’s where they tell me that complexity really sets in. So recently, at Livian Mastermind I asked Gary Keller what he thought about the simple differences between selling and leading.
His answer? “It’s all simple.”
“Once you decide to succeed through others, you and your people are doing the same thing. It looks exactly the same.” Keller said. “How many agents hitting their goals, on your team, do you have to have to hit your goals? Then, each day go look for motivated people that you want to help be successful. That’s it. It’s all simple.”
The road to success is simple for both agents and leaders. It is built one brick at a time by focusing on finding and helping motivated people achieve their goals while ignoring all of the other toys.
Eric Forney is vice president and director of industry relations for LIvian.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the author of this story: Eric Forney at [email protected]
To contact the editor responsible for this story: Tracey Velt at [email protected]
The pile of lawsuits facing Gary Keller and the real estate firm he co-founded, Keller Williams, just got larger. Former KW CEO John Davis filed his second lawsuit against the firm on Wednesday in the Western District of Texas.
In the filings, which name Keller Williams, Keller, former KW president Josh Team, Business MAPS Ltd. and Business MAPS Management LLC as defendants, Davis alleges that the defendants inflated key profitability metrics including company sales and profits to convince individuals to purchase Keller Williams Regions and Market Centers.
According to the filing, after the franchisees signed a contract, the defendants then required franchisees to adopt KWRI’s present market cap, which is the fee agents pay their market centers. Davis alleges that these fees went to increasing technology fees and the purchase of “unneeded goods and services” from KWRI-owned and affiliated companies, such as MAPS training and coaching.
“Nothing in the individual franchise agreements gave Keller or KWRI the power to set market caps themselves for independently owned and operated Market Centers,” the complaint states. “Indeed, in recommending specific and universal Market Center cap amounts, Keller was overstepping the franchisee’s role in leading an independently owned and operated Market Center.”
In addition, Davis claims that franchisees were required to purchase Keller’s books.
After signing the franchise agreement, if a franchisee attempted to move away from the KW system, the lawsuit alleges that they were forced to sell their Region or Market Center, and that Keller and KWRI interfered with any attempt to sell the franchise for market value, forcing the Region or Market Center owners to sell their franchises to Keller or other KWRI members at “extremely depreciated prices.”
In total, the lawsuit makes two civil Racketeer Influenced and Corrupt Organizations (RICO) claims, one Sherman Act restraint upon commerce claim, one intentional fraud in the inducement claim and one breach of contract claim against the defendants.
“Through this scheme, KWRI itself and the other Defendants suffer no loss, and only gains, from the harm caused to the individual owners,” the filing states. “In total, Defendants’ scheme has caused franchisees to lose hundreds of millions of dollars in total. Unless stopped, Defendants will continue to subject franchisees to the same scheme for the purposes of substantial interest and profit.”
Davis is seeking a jury trial and damages worth millions of dollars.
This latest lawsuit comes just three months after a judge in Texas granted Keller’s motion to dismiss Davis’ appeal, ordering Davis to settle his $300 million fraud claim against KW, Keller and Team through arbitration.
Originally filed in the fall of 2022, Davis’ initial lawsuit was prompted by Davis’ desire to “restore his reputation and clear his good name” after sexual misconduct allegations against him surfaced in the spring of 2022.
According to the initial complaint, Davis resigned from his position at Keller Williams in January 2019 due to a disagreement with Keller over a business strategy that he felt would hurt the income generated by Keller Williams offices.
In response to his resignation, Davis alleged that Keller and Team smeared him and withheld Inga Dow’s accusations of sexual misconduct from him as he was negotiating the sale of his KW market center regions following his resignation. This resulted in tens of millions in financial losses, according to Davis.
“This is yet another attempt by John Davis to smear Keller Williams in the press under the guise of a lawsuit. Two federal courts previously directed him to bring his claims [to] arbitration,” Darryl Frost, a Keller Williams spokesperson, wrote in an email discussing Davis’ August 2023 lawsuit. “Mr. Davis has ignored those courts. We will continue to act professionally, follow the law, and aggressively defend these baseless claims.”
In March, Colleen and Bart Basinski, former Keller Williams Market Center owners in Illinois and Indiana, and partial owners of a third Market Center in Southern California, filed their own lawsuit against KW, Keller and other top brokerage executives, alleging that they faced constant pressure from Keller, Marc King, and co-defendants Dan Holt, who is the regional director of Keller William’s Mid America Region, and Colette Ching, the regional director of Southern California, to alter their business operations, despite parameters set up in their franchise agreement, and adhere to Keller’s plans to lower Market Center caps in 2020.
Gary Keller took to the stage at the 2023 Keller Williams Mega Agent Camp in Austin, Texas, Tuesday morning with his usual bravado: a black-and-white video featuring his favorite animal, the buffalo, in a thunderstorm, alongside a motivational message for agents. Rather than fear the storm, Keller Williams agents embody resilience and adaptability to conquer any market challenge. “We are the storm,” the text read.
Keller kicked off the first day of the two-day gathering by offering his take on the housing market and economic conditions. Despite persistent inflation challenges, a volatile mortgage market and limited inventory, Keller said it was still a good time to buy a house.
“It is always the right time to buy the right piece of real estate,” Keller, the executive chairman and founder, said. “Timing is a fool’s game.”
Instead of allowing homebuyers to be educated by “clickbaity” videos espousing an impending real estate crash, Keller told agents that they need to take charge of the narrative and be the ones out there educating consumers on their local housing market.
“Our goal is for you to always be the economist of choice in your local market,” Keller said.
Keller did acknowledge that it has been a slower year for the housing market and agents.
“Our industry is in a recession,” Keller said. “But my bet is that we are already close to the bottom of what the real estate market would do no matter what. I think we’re on Skid Row right now, so I don’t think it is going much lower.”
To illustrate his point, Keller highlighted that the industry is projected to see 4.3 million home sales this year, significantly down from the 6.12 million sales in 2021, but roughly the same as 2009 to 2012.
“If you look at the trend line, given the overall economy, there is not a whole lot of room to go, to get to the bottom,” Keller said. “Yeah, you could drop down to 3 million, but we haven’t seen that in 30 something years in what was a completely different setting than you are in now. In modern times I think that number is more around 4 million, so I don’t think we have anything shocking in the real estate space.”
Fewer overall transaction sides means the average number of sides per agent this year will come in at roughly 5.7 sides, however, the average market volume per agent is projected to come in at $1.44 million, the fifth highest year on record, he said.
Keller attributed this to the increase in median home sale price which is projected to come in at $382,000 for the year, 7% above the trend line of 4% annual increases.
“People say it is way overpriced, but it is not phenomenally overpriced,” Keller said. “The trend line goes up 4%, which is the expect annual appreciation of building a home. In 2006 we were 21% above the trend line and now we are only 7%. Think about it this way, if next year real estate holds, meaning that it doesn’t go up by 4% we are just barely above the trend line and if it drops by a percent then we would be only 2% above the trend line.”
In addition, Keller noted the wave of first-time Millennial homebuyers and move-up Millennial homebuyers who are hitting their peak earning years will be hitting the housing market in the next few years, giving agents more reasons for optimism.
Keller concluded the discussion by circling back to the opening mantra of “we are the storm.”
“If you do the work, you will have a great year in real estate, regardless of the market,” Keller said. “If you don’t do the work, and spend your time trying to avoid contact with people, you aren’t going to like this industry very much.”
Low-cost residential real estate brokerage is not necessarily a new phenomenon. About 50 years ago, a trailblazer named Dave Liniger created the concept of “real estate maximums,” birthing RE/MAX. RE/MAX was probably the most radical low-cost ‘disruptor’ this market has ever seen.
About 10 years later Gary Keller founded Keller Williams, and it was KW that revolutionized the cap-commission model, which, for all intents and purposes, is a low-cost model. The flat-fee model has also been around for decades, but only in the last 10-15 years has it taken off.
Are agents really keeping 100%?
Flat-fee brokers advertise themselves as 100% firms. Real estate agents under their flag get to keep 100% of the commission earned in a transaction. The way these firms make money is by charging a monthly fee and/or a transaction fee. Some may also charge other fees for such things as Errors & Omissions insurance, desk rental, technology, etc.
In reality, agents are keeping somewhere between 92 to 98 cents on the dollar with these flat-fee firms. While not truly a 100% take, agents who hang their licenses with these firms are generally keeping more than agents listing and selling with firms that have the more traditional commission models.
Flat-fee firms climbing up the brokerage rankings
Interestingly, in 2013 only five of the top 100 firms in the nation, according to the RealTrends 500 rankings, were flat-fee firms. In 2023, 10 years later, flat-fee firms now account for 16 of the top 100. By transactions last year, flat-fee firms did 12% of the closed business of the top 100, compared to 5% back in 2013. Put another way, in just 10 years, flat-fee firms have more than tripled their presence among the nation’s top 100 firms, while growing their production by 129%.
Incredibly flat-fee firms now account for six of the top 25 brokerage firms in the nation. United Real Estate, HomeSmart, Fathom, Realty ONE Group, West USA Realty and Samson Properties all have incredible growth stories since their respective beginnings.
Not all industry stalwarts welcome this model
Not all in this industry are welcoming the burgeoning growth of flat-fee firms. Many of the incumbents do consider it an invasion, and the primary reason is the ‘flat-feers’ role in the wholesale margin compression that’s been whacking this industry.
Low-cost brokerage has kicked brokers in the teeth over the years. Before RE/MAX, brokers were keeping between 30% to 50% of every commission dollar earned. With the national average retained company dollar now well under 13%, according to RTC Consulting’s latest benchmark report, there’s no doubt it’s been a grind.
With flat-fee firms retaining a lot less than traditional firms, they need to operate lean and quickly get to scale to be economically feasible. Indeed, the fast-growing flat-fee brokerages that are permeating this industry are showing they have what it takes.
I think the flat-fee model is here to stay, and I suspect we’ll continue to see this segment capture market share. Fortunately, this industry has room for every model, and if anything the flat-feer’s are forcing their competition to be better.
Scott Wright is a partner with RTC Consulting.
This column does not necessarily reflect the opinion of RealTrends’ editorial department and its owners.
To contact the author of this story: Scott Wright at [email protected]
To contact the editor responsible for this story: Tracey Velt at [email protected]
Low-cost residential real estate brokerage is not necessarily a new phenomenon. About 50 years ago, a trailblazer named Dave Liniger created the concept of “real estate maximums,” birthing RE/MAX. RE/MAX was probably the most radical low-cost ‘disruptor’ this market has ever seen.
About 10 years later Gary Keller founded Keller Williams, and it was KW that revolutionized the cap-commission model, which, for all intents and purposes, is a low-cost model. The flat-fee model has also been around for decades, but only in the last 10-15 years has it taken off.
Are agents really keeping 100%?
Flat-fee brokers advertise themselves as 100% firms. Real estate agents under their flag get to keep 100% of the commission earned in a transaction. The way these firms make money is by charging a monthly fee and/or a transaction fee. Some may also charge other fees for such things as Errors & Omissions insurance, desk rental, technology, etc.
In reality, agents are keeping somewhere between 92 to 98 cents on the dollar with these flat-fee firms. While not truly a 100% take, agents who hang their licenses with these firms are generally keeping more than agents listing and selling with firms that have the more traditional commission models.
Flat-fee firms climbing up the brokerage rankings
Interestingly, in 2013 only five of the top 100 firms in the nation, according to the RealTrends 500 rankings, were flat-fee firms. In 2023, 10 years later, flat-fee firms now account for 16 of the top 100. By transactions last year, flat-fee firms did 12% of the closed business of the top 100, compared to 5% back in 2013. Put another way, in just 10 years, flat-fee firms have more than tripled their presence among the nation’s top 100 firms, while growing their production by 129%.
Incredibly flat-fee firms now account for six of the top 25 brokerage firms in the nation. United Real Estate, HomeSmart, Fathom, Realty ONE Group, West USA Realty and Samson Properties all have incredible growth stories since their respective beginnings.
Not all industry stalwarts welcome this model
Not all in this industry are welcoming the burgeoning growth of flat-fee firms. Many of the incumbents do consider it an invasion, and the primary reason is the ‘flat-feers’ role in the wholesale margin compression that’s been whacking this industry.
Low-cost brokerage has kicked brokers in the teeth over the years. Before RE/MAX, brokers were keeping between 30% to 50% of every commission dollar earned. With the national average retained company dollar now well under 13%, according to RTC Consulting’s latest benchmark report, there’s no doubt it’s been a grind.
With flat-fee firms retaining a lot less than traditional firms, they need to operate lean and quickly get to scale to be economically feasible. Indeed, the fast-growing flat-fee brokerages that are permeating this industry are showing they have what it takes.
I think the flat-fee model is here to stay, and I suspect we’ll continue to see this segment capture market share. Fortunately, this industry has room for every model, and if anything the flat-feer’s are forcing their competition to be better.
Scott Wright is a partner with RTC Consulting.
This column does not necessarily reflect the opinion of RealTrends’ editorial department and its owners.
To contact the author of this story: Scott Wright at [email protected]
To contact the editor responsible for this story: Tracey Velt at [email protected]
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Real estate leaders have spoken out in the wake of the murder of George Floyd and the resulting protests against police brutality, vowing change in the industry.
National Association of Realtors President Vince Malta led the way, calling the death of Floyd “senseless and tragic”. He expressed sympathy for the family of Floyd, as well as others who’ve experienced similar grief and pain.
“Our neighbors in the communities where we work and live across America should feel safe and free from discrimination,” Malta said in a statement. “As longtime champions of fair housing, equality and inclusion are among NAR’s most cherished values. NAR is committed to leading the way on policies that address racial injustice and that build safe and inclusive communities. Building the future begins with equal access to housing and opportunity for all.”
Keller Williams CEO Gary Keller wrote in a letter to agents Monday that he believes racism is wrong, and that his company stands with the black community in support of equality. He said the company plans to create a task force within its International Associate Leadership Council that will come up with recommendations on how to eliminate racial disparity in the real estate industry.
“I will be reaching out to your regions immediately to ask for a nomination from each to join us in this critical effort,” Keller wrote. “I believe we can also set an example within the industry by committing more of ourselves to a better, and equitable future.”
Keller further asked his staff to “self-reflect, listen, learn and speak up to bring about change.”
“I believe that the real estate community has a unique opportunity to promote healing and reform,” Keller’s letter read.
Meanwhile, Redfin CEO Glenn Kelman said that he too was planning to do more within his own company.
“The most obvious thing is hiring and developing more people of color to positions of power,” Kelman wrote on Redfin’s blog on Sunday. “We say that we believe talent is equally distributed between people of different races, but most businesses, including Redfin, are run mostly by white people.”
Redfin plans to publish its annual report on employee diversity later this month, and will go into more detail about which of its diversity initiatives are working and which aren’t, as well as what the company plans next. He also said he plans to provide more education to his workforce on race and real estate.
“Let’s commit as businesses and business people to serve blacks and other people of color better,” he wrote. “Companies that employ hundreds or thousands may feel it’s beyond our control to stop one grocer or bank teller or broker from jumping to the wrong conclusion about a customer, and doing something racist that hurts that customer, and stains our reputation for years.”
Another executive, Compass CEO and co-founder Robert Reffkin, said he saw himself as a “black man who has felt out of place his entire life.”
In a company-wide email, he said he was heartbroken that the pain everyone is feeling now might still not be enough to bring about real change.
Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected]