Truth in Real Estate®
15 January 2020 by Kevin Cahill
(Be sure to look for the first part of this story, dated 14 January 2020.)
Joining a new brokerage in November 2004 was a very exciting time for me in my career. I was 33 years old at the time, and had been a real estate agent for just over 5 years.
Keller Williams was a very exciting company at this time… growing very quickly, spreading across the country… and I had been offered a very incredible opportunity in joining the Greater Cleveland market center, in terms of an ownership opportunity in the continuing growth of Keller Williams Realty in greater Cleveland. The KW agents in Cleveland at the time were doing a lot of business and attracting a lot of attention. We were excited about the progressive KW Profit Share structure, and the opportunities to have an impact in KW’s growth across the country.
The Profit Share system allowed agents to benefit from helping the company grow, such that if I recruited an agent to KW, and that agent closed transactions in a particular month, and that agent’s market center was profitable that month, I would receive a percentage of the profit that agent generated. However, if that agent didn’t close any transactions, or if their office wasn’t profitable, then of course, there was no profit to share. It all made sense to me, and it was a wonderful way for the company to say “thank you” to the agents who helped the company grow and improve profitability… in fact, I had recruited a handful of Realtors to Smythe, Cramer Co. and never received a share of profit from those agents (though I would acknowledge that I was treated very well, just the same).
We were recruiting Realtors across Cleveland, blanketing the area as best as we could. As we recruited more and more agents, we could create an ownership group to apply for another KW franchise. We became really good telling the story of a different model, a different culture, a different approach, and agents were attracted to the opportunity for a variety of reasons… many top level agents saw that they could become owners of their own offices, and that was exciting to them. These agents saw how their influence could be leveraged to create new offices, with better cultures, and they could really benefit from their success, more so than just listing another home for a seller and helping another buyer find their next home. Over time, I had an ownership interest in 5 market centers through a group called Northern Ohio Real Estate Development. I was happy to be a part of this growth, along with a bunch of super-nice fellow agents, working hard for their buyers and sellers, and for their families.
I also served on the KW Agent Leadership Council in my market center, which began me on a journey of better understanding financial statements, a great bit of education for any businessperson, anyone considering growing and leading… I enjoyed studying the Balance Sheet and Profit and Loss statements, and seeing the connections between expenses and revenue, to better understand the needed expenses to keep the lights and heat on at the office, the copiers, the space, the staff, and the variables in revenue… how a closing at the end of March could mean profitability for that month, rather than a loss that month, simply because the closing took place in early April. Over the course of a quarter or a year, a single closing can’t make too big a difference… the real thing that would have mattered more would be to have 3 more closing in March, and 4 more closings in April, and 7 more closings in May, and 16 more closings in June… and that is only accomplished by recruiting more agents, training those agents, and keeping those agents with you as they continue to grow and prosper. This was the beginning of my interest in growth and profitability.
I remember I was at the dentist’s office, having my teeth cleaned, and I was chatting with the new dentist in the office who had just purchased the practice from my long-time dentist who was retiring. We spoke briefly about the practice he was taking on, and we chatted about how he envisioned growing the dental practice. I suggested we grab a bite to eat sometime soon, and we could talk about it more… I shared with him what I was learning and practicing myself, about marketing, about lead generation, and increasing any client-based business. We had a great conversation, and he went on to implement mailings and postcard campaigns, creating offers to bring in new patients, to get those patients to stay on as clients. He loved it… and I was excited to be able to share with him what was working for me.
As KW continued to grow across northeast Ohio, with the flagship office in the Pepper Pike area, and new offices in Solon, Mentor, Westlake, Rocky River, and Strongsville, I realized that KW did not have any offices in my childhood hometown area of Akron, Ohio… just 30 minutes south of Cleveland, with the same television, radio, and newspaper outlets, and yet, KW was not present there at all. So I decided this could be a great opportunity for me to help the company to continue to grow across the region.
I spoke with the KW Regional Director, Lou Ronayne, and Regional Owner, Chuck Fast, who were headquartered in Michigan, serving the Michigan and Northern Ohio Region… they were very enthusiastic to have me help with the growth… however, Akron was technically in the Pennsylvania region, so I’d have to get approval from those leaders in Philadelphia. I learned that the Greater Pennsylvania region covered Pennsylvania, southern New Jersey, and Delaware, and somehow, during the slicing and dicing of the country into regions, they also owned a few counties in eastern Ohio, and they had one office in Ohio, in North Canton, about 30 minutes south of the area I was targeting.
I began calling brokers in Stow and Cuyahoga Falls, my childhood stomping grounds, and asked to meet with these brokers for 15 minutes, and I set up a bunch of nice connections with some really smart people. Over time, one of the brokers I knew, Dave Chervenic, became more and more interested in learning more about joining KW, and bringing his numerous offices and hundreds of agents along with him. Around this same time, Lou Ronayne and Chuck Fast saw the opportunity, as I did, to bring these nearby brokers into the Michigan/Northern Ohio region which was headquartered about a 3–1/2 hours drive away, outside of Detroit, rather than 8 to 9 hours drive away to Philadelphia… So Chuck purchased the regional ownership of those Ohio counties from the Greater Pennsylvania Region, which I thought was brilliant, and such a great improvement for the good agents and leaders in North Canton, and for the possibility (and eventuality) of Akron agents joining KW.
In time, Dave Chervenic brought the company his mother and father had created, Geneva Chervenic Realty, into KW… with around 300 agents in multiple offices blanketing the greater Akron area, this was the largest fold-in in KW’s history… and my profit share bloomed!
My real estate business was growing, and I had a small team helping me deliver for sellers and buyers… and with the recruiting I was doing, and the discussions I was having with various regional leaders and regional owners, as an agent no less, I began to get phone calls from market center owners who were looking for talented recruiters to head up their market centers.
Around this same time, the summer of 2008, the real estate market was quickly collapsing… It had begun to stall in the summer of 2006, though by the middle of 2008, it was getting worse and worse each week… home prices were dropping, and buyers were still not buying. My clients were asking me if I thought the housing bubble was about to burst… My point of view of it, from about 2004 onward, was that we actually had a credit bubble… and that credit bubble was most certainly about to burst.
So I thought it could be a very good time to shift from sales to the leadership roles… I began to entertain those KW market center owners who called me to discuss their opportunities. I was very thankful for the compliment that they were paying me by asking me to meet, and then offering me Team Leader roles… At the same time, my marriage was terribly on the rocks, which was very sad, and the timing was right for me to make a new start… so joining the leadership ranks and continuing my education in the real estate industry was a nice progression for me.
(Please look for my next article, where I shall continue.)
