KW president on what eXp, Zillow — and Gary Keller — have wrought
Marc King explains why Keller Williams needs to be the tech company of choice and why the industry needs agents who value service over shortcuts.
- Marc King has been with Keller Williams for 20+ years, first as an agent and now as one of its top leaders.
- In the post-“The Millionaire Real Estate Agent” era, tech can add value for brokerages and give agents what they need.
- Agents can get a taste of something that seems like success from eXp and Zillow, but the profit may not really be there.
Marc King, Keller Williams president since 2021, has already mapped out how his time in the role will end — and how it won't.
"We don't have to have any weird Game of Thrones stuff," he said. His relationship with Gary Keller is too open for that. "I've told him if the day comes when you don't see me as a 10 out of 10 and there's someone who can do the job better, I would love to help that person."
The word "love" comes up a lot in our conversation. King loves the work, the people, the challenge of his role, and the company, which he's been a part of since 2003. "It's changed my life. I intend to be here as long as they'll have me."
King spoke exclusively with Real Estate News about the power of Gary Keller's model and, ironically, the challenge of retaining the agents Keller has inspired. He also spoke, with his tongue a bit in cheek, about how eXp and Zillow may be fueling illusions of success. (This interview has been edited for length and clarity.)
What he brings to his role
It's a combination of things, I would hope. No. 1, I understand the agent business. I was the No. 67 agent in the United States in 2008. And I say "if I can do that, anybody can do it," and I truly mean it. It's not a humblebrag. It's that I used Gary Keller's agent model, and I think if I'm good at anything, it's following someone else's model. Gary is a model maker and I'm a model follower, typically, and I didn't realize that about myself until I got into this business. I mean, there's a reason I don't own eight Marc's Real Estate Emporium offices. I own eight Keller Williams offices.
The unintended consequences of "The Millionaire Real Estate Agent"
Real estate brokerage margins have been suppressed. When I started my first office, the office revenue as a percentage of the agent commission was 17%. And then it fell to 16.5. And then it was 14. And then 13. And 12. Today, it's 8%. What's happened is that the agent has moved away from the brokerage brand. And I blame Gary for that, because he created "The Millionaire Real Estate Agent" book that taught people how to build their own business, build their own brand.
And now all of a sudden, because we've led with "brand doesn't matter, and we stand behind you not in front of you" and "your clients do business with you, no matter where you are," we've created an entire industry full of people who now believe it. So now we have to retain in a different fashion.
Why Keller Williams needs to be 'the technology company of choice'
About five years ago, Gary and I were meeting with a group of top, top agents and talking about technology stacks. And the average spend in the room was about $2,500 a month. And we're wanting to gauge what we can build as an offset, because if we can replace that tech stack for $45 a month, we win big. And he asked the question: "If Boomtown called you tomorrow and said, 'We're raising that $2,500 to $5,000,' what would you do?" And they all kind of shrugged their shoulders and said, "Well, we wouldn't like it, but we'd have to pay." And then he followed it up — and this is where this is where it gets scary — he said, "What if Keller Williams called you tomorrow and said, 'We're raising your cap from $18,000 to $19,000'?" And they all shrugged their shoulders and said, "Well, we'd leave."
That's why we have to be the technology company of choice and why we spent $600 million to build out our tech stack for our agents, which, by the way, is gaining rapid adoption as we speak. The goal is five years from now for it to be the dominant tech stack in the entire industry. We welcome everybody to go use wherever they want and to plug into our tech through API, but we want to create a platform that means you don't need all the other companies.
Not a shot at eXp, but …
Agents are trading their profit up front for the lead generation they don't want to do. That's code for "buy it through Zillow." It's not a shot at eXp, but eXp is getting their fair share of that agent who started in the business three years ago, worked at Wendy's before that, and by spending $30,000 a month on Zillow to make $40,000 a month, they think they figured something out. But then you look at their P&L and realize no, actually you haven't. Your business will grow to the extent that you do.
Say to me, "I'm trying to choose between Keller Williams and eXp," and I'll say, "Here's the good news. It doesn't matter who you choose — you'll know in six months if you're in the right spot." That's because we attract vastly different kinds of agents. If you're learning-based, if you want to build a business, if you want to understand the economics behind the business, then we're a great fit for you. If you don't need any help, and you've already figured it out, eXp is probably the best place for you.
Not a shot at Zillow, but …
Zillow was created with what I believe was the arrogant premise that real estate agents are no different than travel agents. Ten years ago, I said we're going to be tested as an industry, and we're either going to be proven by the consumer to be the travel agents of the '90s or we're going to be proven to be lawyers. LegalZoom did not disintermediate or put lawyers out of business. If you're on trial for your life, you're not negotiating for yourself on your iPad, you're still hiring the best you can hire. Thus far we've proven [to be lawyers].
But every time one of those Rolex-flipping 23-year-olds jumps in, starts spending 50 grand a month to make 45 grand, or 60 or whatever the case is, and eats 1,000-2,000 transactions and gives poorer service because they don't necessarily know what they're doing, then it moves our entire industry further and further toward being that travel agent.