When it comes to real estate, two of the biggest names in the industry are Berkshire Hathaway and Keller Williams. Both companies have made their mark, but they operate quite differently.
This article will provide an in-depth comparison of Berkshire Hathaway and Keller Williams, analyzing the pros and cons of each and how they stack up against one another.
A Brief Comparison Table
| Category | Berkshire Hathaway | Keller Williams |
| Business Model | Franchises brand name to brokerages | Franchises to individual agents |
| Company Structure | Hierarchical corporate structure | Distributed authority to agents via profit sharing |
| Revenue | $276 billion total in 2021 | $11 billion in 2021 |
| Real Estate Agents | 50,000+ agents | 180,000+ agents |
| Brand Awareness | Very high, globally recognized | High within real estate industry |
| Training Programs | Provided by local brokerages | Robust training through Keller Williams University |
| Technology Platform | Proprietary Berkshire Hathaway platform | Keller Cloud built in-house |
| Financial Strength | Extremely strong with over $700 billion value | Healthy but less diversified than Berkshire |
| Company Culture | Professional corporate culture | Energetic, agent-focused culture |
Overview Of Berkshire Hathaway And Keller Williams
Berkshire Hathaway is a massive conglomerate holding company led by the legendary Warren Buffett. Though Berkshire Hathaway has businesses across many industries, it does have a real estate arm called Berkshire Hathaway HomeServices. This subsidiary franchises the Berkshire Hathaway brand to real estate brokerages across the US.
Keller Williams, on the other hand, is focused specifically on real estate. It was founded in 1983 by Gary Keller and Joe Williams and has grown into one of the largest real estate companies in the world. Keller Williams franchises out to individual agents and provides them with training, technology, and support infrastructure.
Both companies have found tremendous success. Berkshire Hathaway is highly diversified, while Keller Williams focuses intently on real estate.
Comparison Between Berkshire Hathaway And Keller Williams
Business Models
The core business models of Berkshire Hathaway and Keller Williams are quite different:
- Berkshire Hathaway utilizes a traditional franchise model. Berkshire Hathaway HomeServices charges a franchise fee to brokerages wanting to use the Berkshire Hathaway brand. This gives Berkshire Hathaway revenue, while the brokerages handle real estate transactions.
- Keller Williams franchises out to individual real estate agents, who pay a fee to Keller Williams. This gives Keller Williams agent numbers and reach. But actual real estate brokerages are still separate local businesses.
Berkshire Hathaway franchises out just a brand name, while Keller Williams franchises out to actual agents. This key difference affects their operations.
Company Structure
Given the different business models, Berkshire Hathaway and Keller Williams have uniquely structured organizations:
- Berkshire Hathaway has a hierarchical corporate structure. Authority stems from the executives at headquarters, flowing down to regional managers and then local franchised brokerages.
- Keller Williams was designed to distribute authority across the organization through a profit sharing model. Keller Williams gives agents ownership in their local market centers, creating an entrepreneurial environment.
The decentralized structure of Keller Williams contrasts with the traditional corporate hierarchy of Berkshire Hathaway. This allows Keller Williams to be more agent-focused.
Growth And Reach
With Berkshire Hathaway having been around much longer than Keller Williams, it’s no surprise that it dwarfs Keller Williams in terms of size and revenue:
- Berkshire Hathaway generated $276 billion in revenue in 2021 across all of its subsidiaries. Its real estate brokerage network has over 50,000 agents in the US.
- Keller Williams produced just $11 billion in revenue last year. However, it does have 180,000 agents globally across more than 1,000 market centers.
Despite its massive conglomerate revenue, Berkshire Hathaway HomeServices plays second fiddle to Keller Williams in terms of real estate market share and agent count. But Berkshire does have the advantage of wider brand recognition.
Technology And Training
Leveraging technology and providing agent education are key focuses of both companies:
- Berkshire Hathaway has invested significantly in new technology over the past decade. It’s created a proprietary tech platform for agents and integrated artificial intelligence for smarter home search. Brokerages under the Berkshire Hathaway brand also utilize the company’s substantial resources for agent training.
- Keller Williams built their own in-house tech platform called Keller Cloud. They also offer Keller Williams University for agent training and education at every career stage. Their training courses span everything from lead generation to closing deals.
By owning their real estate tech stacks, both companies can create tailored systems rather than relying on third-party software. When it comes to training, Keller Williams has placed a stronger emphasis on agent education.
Also Read: Differences Between Redfin And Keller Williams.
Brand Power
The name recognition of these two brands is markedly different:
- Berkshire Hathaway is one of the most respected and admired companies in the world. Led by investing legend Warren Buffett, Berkshire Hathaway carries tremendous brand cachet that brokers can leverage.
- Keller Williams, while not a household name like Berkshire Hathaway, has built up its reputation over the past 40 years as a real estate leader. Within the industry, the Keller Williams brand is recognized for its training and tech.
Berkshire Hathaway clearly holds the edge in overall brand awareness. But Keller Williams has established its own brand identity within the real estate sphere.
Real Estate Models
operationally, Berkshire Hathaway and Keller Williams take diverging approaches:
- Berkshire Hathaway brokerages use traditional real estate models focusing on agents transacting home sales and home searches. They provide the full suite of buying/selling services.
- Keller Williams emphasizes a portfolio approach, encouraging agents to view real estate as a business. Keller Williams aims to teach agents how to generate income from sources like referrals and property management.
The added income streams promoted by Keller Williams help differentiate it from vanilla real estate brokerages under the Berkshire Hathaway name.
Financial Strength
Given Berkshire Hathaway’s diverse assets and massive size, it unquestionably has the financial edge:
- Berkshire Hathaway is currently worth over $700 billion and holds $300 billion in cash reserves. That gives it tremendous resources to invest and endure any industry downturn.
- Keller Williams is still a private company, so exact financial data isn’t public. But as a real estate-dependent business, it likely doesn’t have the same financial flexibility as the conglomerate Berkshire Hathaway.
Berkshire Hathaway has such a substantial financial war chest that it would take a cataclysmic scenario to threaten its well-being. Keller Williams, while still very successful, can’t rival the fiscal strength of Berkshire.
Company Culture
These two real estate giants also take different approaches to company culture:
- Berkshire Hathaway has a straightforward corporate culture. Because it consists of dozens of subsidiary brands, there isn’t a single unified culture across the entire company. But its real estate arm values trust, integrity, stability, and professionalism.
- Keller Williams places immense importance on constructing a strong internal culture. The company actively promotes its happy, energetic culture centered on teamwork, “red values”, and agent empowerment. Keller Williams puts agents first and fosters an entrepreneurial environment.
The spirited agent-focused culture of Keller Williams contrasts sharply with the buttoned-up corporate culture of Berkshire Hathaway. These different cultures stem from the business models of each company.
Also Read: Comparison Between Compass And Keller Williams.
Frequently Asked Questions (FAQ)
No, Keller Williams is not the outright largest real estate company by revenue or agents worldwide. But it is certainly one of the largest. Keller Williams has over 180,000 agents globally across more than 1,000 market centers. Though not the absolute #1, it does rank among the biggest real estate brands.
Yes, Berkshire Hathaway has a real estate subsidiary called Berkshire Hathaway HomeServices. This arm franchises out the Berkshire Hathaway brand to brokerages. So while Berkshire Hathaway is best known as a conglomerate holding company, it does have a presence in the real estate sector through Berkshire Hathaway HomeServices.
A few key factors drove Keller Williams’ immense success: its agent-focused business model and profit sharing, its robust training programs and education, and its motivational company culture. By sharing ownership with agents and equipping them to better serve clients, Keller Williams empowers its agents and fuels growth.
The main reasons brokers affiliate with Berkshire Hathaway are: leveraging the Berkshire brand, tapping into the company’s vast resources and financial strength, and utilizing their real estate tech investments. Affiliation provides credibility, stability, and support infrastructure.
Also Read: Comparison Between HomeSmart And Keller Williams.
The Verdict
Berkshire Hathaway boasts financial strength, diversification, and the world’s most respected brand, but has less real estate focus and a detached corporate culture.
Keller Williams provides excellent training, a motivational internal culture, and business model focused on agent success, but lacks brand awareness and Berkshire’s financial resources.
There are convincing arguments to affiliate with either real estate powerhouse. The optimal fit comes down to prioritizing the factors most important to a brokerage or agent.