What do you want your business to look like?
What is an interdependent model? In order to understand its significance, we first have to take a little trip back in time to become familiar with how real estate brokerages have traditionally operated. By and large, for agents it was the wild wild west where their two choices were essentially a job or starting a solo business completely unsupported.
Imagine for a moment that you have a business partner, and that partner has a lot of rules that you have to follow. In fact, they have so many rules that their role feels more like a boss than a partner. They give you just enough support to keep you from leaving, but their rules dictate how your business operates and ultimately limits the growth of your company.
Now imagine that you’re still in that same business, but your business partner is completely hands off. They give you minimal support and expect you to assume all of the risks of running the business. This partner, in essence, simply wants you to do all of the work, assume all the risk, and just send them a check.
Neither scenario sounds very enticing, does it?
For years, choosing between these polar opposites was a choice that every practicing real estate agent had to make. Did they want to join a brokerage as a dependent agent, being fed business, relying on them for a paycheck, with no real opportunity for building wealth? Or did they choose to become an independent agent, with limited support and massive potential for risk?
Structured for Success
The Dependent Model
On the left, you have the dependent model. This is what was commonly practiced by traditional real estate firms. They are Brand-centric, meaning their agents all use their marketing materials, their logos, their contact information and the broker has ultimate control of all incoming business. These brokerages attempt to keep agents dependent on them by giving them just enough support to keep them in business.
In the Dependent model, financial gain is directed primarily to the broker and their associates have limited opportunities for building their own businesses or building any sustainable wealth for themselves. The Dependent model is essentially another JOB.
The Independent Model
On the right, you have the Independent model. These are the “100% companies” that tend to compete purely based low monthly fees for agents. The problem is, this model creates more of a Landlord / Tenant relationship between the broker and agent where the agent gets almost no broker support, but inherits all of the risks involved with running a real estate business. In some cases there might not even be an office, instead opting to run as a virtual office.
The Independent model will entice agents with the promise of low fees, but training will be minimal, accountability non-existent, brokers are rarely seen, and their will be zero support for agents looking to build a business or grow massive wealth. These brokerages focus on what’s called the ‘messy middle’ – not new agents, and not high producing agents – the middle of the road agents who are content doing 5 – 10 deal per year.
The Interdependent Model
Enter Gary Keller. In 1983 he, along with Joe Williams, founded Keller Williams Realty in a small office in Austin, Texas. After considering the prevailing brokerage models of the time, Gary started on a path to create a company that no agent would ever WANT or NEED to leave. And the Interdependent model was born.
The model was built around the belief that the associates are the single most important asset in a real estate company. If the associate succeeds, the brokerage succeeds. In other words, in an interdependent model, associates have an interdependent relationship with the company and a mutual interest in success. Associates and brokers work as a team in working towards their financial goals. And finally, the associates assume none of the financial risks, legal liabilities or management responsibilities.
It’s like being in business with a partner who cares about your success, delivers value to you at every turn, and believes you are both stakeholders in the business together. We encourage you to read this article written by Stanford University on what make the Keller Williams model unique, and why we truly believe it’s the best model for associates to built big businesses.
