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Gary Keller discusses the constant of change in real estate

From technology to class action lawsuits, Keller shares his view of how the real estate industry has developed

In his over four decades in the real estate industry, Gary Keller has seen a thing or two. From the recession in the early 1980s and the Great Recession of the mid-2000s, to the chaos and turmoil of the COVID-19 housing market, Keller and the brokerage he co-founded in 1982, Keller Williams — which he is now the executive chairman of — have been through all of the housing market cycles.

Keller took to the stage Monday morning in the Brazos ballroom of the Omni Barton Creek Hotel in Austin, Texas to address nearly 400 RealTrends Gathering of Eagles attendees, sharing his thoughts on changes in the industry and what future developments he anticipates.

“The good news is that the desire to own a home has never been bigger,” Keller said. “We know, if you go back to the research that has been done over the last 20 to 30 years on wealth in America, it is tied to homeownership.”

While he does not believe this real estate fundamental will change, Keller is confident that the industry will continue to evolve.

“What has surprised me the least over the last decade is that real estate continues to change,” Keller said. “Once you accept that change is inevitable and you embrace change as an opportunity — because the majority of people resist change — then the change does not surprise you. There has never been a better time to make more money in this industry than right now. Now is maybe the greatest time ever.”

What’s currently driving these changes, in Keller’s view, are technology, the numerous lawsuits facing the industry and the evolution and development of real estate teams.

“Right now, people are underestimating the long-term effect of technology,” Keller said. “We came out of the gates like five years ago and stumbled and built a product that didn’t work, and we had to stop and find new leadership and start again. But we are there now, and we are already starting to see the value that it is bringing to our agents — pricing, consumer trends, all of the in the name of making out people smarter and providing better balance to their lives, and business. And that isn’t going to stop; it is just going to grow more and more.”

Keller also highlighted the class action lawsuits plaguing the real estate industry as another catalyst for change.

“The legal industry has discovered our industry,” Keller said. “But the TCPA [Telephone Consumer Protection Act] and the lawyers enforcing that have really been one of the biggest changes recently. It has moved the industry more and more toward permission-based marketing, which has formed the basis of the lead generation industry. Consumers now have to give you permission to reach out to them, and that has been great for the aggregators.”

As lead generation has morphed into its own industry within the real estate industry, leads have become the number one thing agents request from their broker. Real estate team leaders have jumped in to fill this gap, causing the size and number of real estate teams to rapidly grow over the past decade — another factor Keller feels is sparking change in the industry.

“Back ten years ago in our business, agents on teams represented about 10% of all agents, and today it is about 40%,” Keller said.

Keller said it is no surprise that the team model has taken off as agents have looked to expand their businesses and increase their profit margins.

In Keller’s view, the teams that are the most profitable are the ones whose leaders provide agents with quality leads.

“It doesn’t take more than five or six closing ad month, where you are collecting a lead generation fee and then you are on a big 50% split for that agent — which they’ll do all day long for a good lead — for you to literally double your profitability,” Keller said.

With change continuing to be a constant in the real estate industry, Keller told attendees to lean into education.

“Education is more needed than ever before, but it is the timing of the information that matters most to them right now,” Keller said.