Above-the-Line expenses are expenses that may be subtracted from Profit when calculating Profit Share. Below-the-Line expenses are expenses that are allowable for tax purposes but not for Profit Share purposes.

Associate Leadership Council. A group of individuals drawn from the top 20 percent of Market Center producers.


An agent who joins Keller Williams Realty is referred to as an associate because they are treated like a stakeholder in an interdependent business model. 

An individual who produces sufficient GCI and contributes enough Company Dollar to the Market Center to satisfy their annual commission Cap requirement. After capping, the individual keeps all commission income.

The dollars a Market Center gets to keep after all the agents are paid their commissions. The MC uses these funds to pay bills and to make a profit.

The influential group of people at a Market Center who are recruited for their ability to recruit other sales associates and thereby increase MC profitability.

Gross Commission Income. The total amount of commission dollars the Market Center receives from a transaction.

Keller Personality Assessment. The Keller Personality Assessment (KPA) is a comprehensive personality tool that brings a complete understanding of an individual-encompassing not only how a person behaves but how they THINK.

Keller Williams Realty believes that success in real estate occurs out in the marketplace, not in an office. It is the Keller Williams philosophy that everything we do, even down to the name we give our sales offices, should reflect our philosophy. Hence, Keller Williams has “Market Centers” … not offices.

Market Center Administrator. The MCA is responsible for implementing and maintaining all operating systems in a KW Market Center.

Operating Principal. The OP is responsible for the success of the business venture. They are also responsible for bringing capital, leadership, and accountability. 

The sales volume that is produced by an associate before they have reached their Market Center Company Dollar cap.

Residual income paid to Keller Williams associates who help grow the company in the United States and Canada.

The sales volume that is produced by an associate before they have reached their Market Center Company Dollar cap.

Regional Director. The Regional representative who administers KW in a geographical area. RDs award franchises to prospective owners and see that the KW Model is followed in their Region.

The process set forth by Keller Williams Realty International that describes the guidelines to be followed for the successful launch and profitable operation of a Market Center.

The person at a Market Center who is responsible for attracting/hiring sales associates. The TL also trains and consults the associates to performance.

The Beliefs (Rules) of Keller Williams Realty: 

W – Win-Win – Or no deal

I – Integrity – Do the right thing

C – Customers – Always come first

C – Commitment – In all things

C – Communication – Seek first to understand

C – Creativity – Ideas before results

T – Teamwork – Together everyone achieves more

T – Trust – Starts with honesty

E – Equity – Opportunities for all

S – Success – Results through people

The KW Economic Fundamentals

1. Lead with revenue, not expenses.

2. Keep debt low and get it to zero.

3. Keep overhead and fixed expenses low.

4. Follow the KW Chart of Accounts and code expenses consistently.

5. Use the high-volume/low-margin business strategies.

6. Offer competitive commission splits that cap Company Dollar on an annual basis.

7. Run a fixed expense budget with very few variances.

8. Get all variances approved in advance of the decision to spend the money.

9. Carefully review your Balance Sheet monthly and Income Statement weekly.

10. Charge rent for offices and desks.

11. Don’t carry Agent Receivables. Be a cash-and-carry operation for as many consumables as possible; e.g., office supplies, signs, etc.

12. Bill back for only those consumables that can’t be cash and carry; e.g., office rent, copies, technology fees, etc.

13. Be a class operation, but no frills or extravagances.

14. Multiuse as much space as possible; e.g., resource rooms, meeting rooms, day desks, etc.

15. Set up both a Deposit Account and an Operating Account. Put all income into the Deposit Account. Transfer only budgeted amounts into the Operating Account.

16. Capping associates should produce enough income to pay Grand Total Operating Expense. Everyone else is profit!

17. Open the books and provide the ALC with monthly financial reports.

18. Share the decisions.

19. Share the profit.

20. OP can’t be TL.

21. Follow the Interdependent Model. Treat your agents and staff as if they were partners.

22. What you focus on expands, so know your key numbers (the Growth Initiative tools).

23. Feedback is the breakfast of champions; be accountable to the numbers.

24. Profit is not the purpose, but it is the goal and the fundamental measure of a healthy Business.

25. What correlates with profit matters (Agent Count, Company Dollar, and Costs as a Percentage of Company Dollar).

KW Economic Terms

The number of sides (units) multiplied by the sales price totaled for all closed transactions.

The total amount of commission dollars the Market Center receives from a transaction.

The sales volume that is produced by an associate before they have reached their Market Center Company Dollar Cap.

The Gross Commission Income produced by an associate before they have reached their Market Center Company Dollar Cap.

A franchise royalty paid to KWRI. This royalty is generally paid at 6 percent of each transaction until the agent has reached the annual Franchise Royalty Cap of $3,000.

The amount of GCI that is left after Cost of Sales (commissions to agents and referral fees) have been deducted. The money is used by the Market Center to pay expenses and make a profit.

The Grand Total Operating Expenses minus Other Income (rents, billbacks, ancillary revenue, etc.).

The monthly profit produced by a Market Center upon which Profit Share is calculated.

A loss from previous months of operation that can be subtracted from current profit before Profit Share is calculated.

Each month profits are divided between ownership and the Profit Share Pool in three stages starting with the first $2,990 (25 percent to PS pool) of profit, then the next $8,250 (35 percent) of profit, and then all profit after $11,240 (50 percent).

Profit Share is calculated for the three stages of profit so as to return a higher proportion of the initial profits to the owners who took the risk.

The process of sharing a portion of the Market Center’s profit with the associates and leadership who have created the company’s growth through Sponsorship.

That portion of KW Profit that remains after Profit Sharing.

Those expenses that are allowable by taxing authorities but are not allowed to be counted before Profit Share.

Owner Profit after Below-the-Line amounts (such as taxes) have been added back in or accounted for.