Keller to buyer agents: Explain your value or ‘get the hell out’
Keller Williams’ charismatic co-founder kicked off the Family Reunion event with his hot takes on the housing market “winter” and how to get through it.
Key points:
- Keller said he believes the market hit bottom in 2023 for transactions, and demand is out there.
- He suggested that the real estate market would benefit “if all those real estate agents that don't want to sell any real estate just got out.”
- “What should change in the industry more than anything else,” said Keller, was that agents need to explain their value proposition and use buyer agreements.
Gary Keller, the charismatic and oftentimes colorful leader of brokerage giant Keller Williams, brought a message of realism and terse sincerity to the company's annual agent conference, Family Reunion.
His most blunt take: That buyer agents aren't doing enough to explain how they get paid and why they're worth it.
"If you want to understand fundamentally how the industry got sued, it's because you don't do this. You are being accused of not being transparent," Keller said. "Do it, dammit. Do it. If you're not doing it, maybe you should just get the hell out. There's a thing called professionalism. There's a thing called service. Try it. You might like it."
During the morning's session covering the state of the housing market, Keller offered his take on numerous topics ranging from home price growth, to buyer demand to the importance of buyer agreements.
Gary on the 2024 housing market…
"I'm gonna lay a prediction out here. My prediction is — and Tony Robbins said it — is that you're in winter right now, and it's going to stay winter for a while. So if you were hoping that this year would give relief, I don't think that's going to happen. I think it's going to be exactly the same. The market's not going to give you anything for a little while."
Gary on affordability and home price appreciation…
"The cost of money and the price of real estate is literally what creates affordability or the lack of affordability. So, if you go back, you get this sense of a trendline being 4% appreciation annually and it's a great way to try to understand where we are from an affordability standpoint. If we go back to 2006, you were 24% above the 4% line, and what happened? We had the Great Recession. We're 9.3% [today], and I say that and people go, 'Really? It feels more expensive than that.'
"If it's just the price alone that's going to affect affordability, we're going to need to get back to the 4% line. If home [price appreciation] didn't grow for the next nine years, we'd be there. So if we have no appreciation for four to six years, you're back to the trendline."
Gary on a recession in real estate…
"The Fed wants us to come right up on the border of a recession — an economic recession. Right now, real estate is in a recession — you are in a recession. But the economy's not in a recession. So as long as they can keep us in a recession and keep the economy out of a recession, they're going to keep rates high. Now when we say we're in a recession, what I want to point out is that we've already receded."
Gary on a full economic recession…
"Let me just make this highly controversial statement: A good recession would set everybody up in this room for almost a decade of amazing."
Gary on buyer demand…
"Demand is there. When we say low demand, let's be real clear — the real demand is off the charts. We have the millennials who are just sitting here waiting to try to buy a house and move out of the home with their parents, but the cost of money is so expensive. They're still biding their time and saving money — we hope."
Gary on unemployment and agent attrition…
"So the truth of the matter is, if unemployment went to like 4.5% … that might be enough. Actually, if all those real estate agents that don't want to sell any real estate just got out, it might do the trick."
Gary on managing expenses during a down market…
"You've got to manage your expenses harder than ever before during times like this. [But 2023 was] the sixth-best year on record for volume. Why did Tony come out and say you just had the greatest run in business history? Because he was talking about '21 and '22, and there's no question about it: The industry was drunk with success. The hangover sucks."
Gary on transaction sides in 2024…
"Here's the great news: It won't be worse than last year. Yay! Let's have a T-shirt made: It won't be worse. I think we hit bottom."
Gary on buyer agreements…
"If you ask me what what should change in the industry more than anything else, it's that every one of you leave here and for the rest of your life when you meet a potential buyer, you pull out your value proposition, your service plan, and you pull out a buyer agency agreement — and you go through it and you explain how you work and how you get paid."