For top-performing individual real estate agents looking to take their businesses to the next level, nothing beats a team.
The concept of real estate teams was the focus of a recent HomeSmart webinar featuring Wendy Forsythe, COO of HomeSmart International. Teams are quickly moving from the novelty that they were in the last decade to becoming the best way agents can expand their businesses and become more profitable. Research from Inman found that about 60 percent of agents “would consider joining a real estate team or starting one of their own.” Teams aren’t simply the future—they’re the present for agents ready for the next challenge.
The Basics of Real Estate Teams
The beginnings of modern real estate teams emerged in the early 2000s, when many agents began to form partnerships. These partnerships were often born out of necessity and a desire to achieve a favorable work/life balance. An agent took on a partner—possibly a family member or trusted friend—to share the responsibilities of the job and deliver better service to clients. Partnerships must be carefully developed and nurtured, because concerns such as compensation, who gets which client, and what roles each partner will accept, must be defined.
Around the beginning of the current decade, partnerships began to evolve into teams. Top agents brought on buyer’s agents to help with showings, yet retained control of negotiations, writing the offer, and other high-level responsibilities. Some of these agents also hired licensed or unlicensed assistants to handle listings, marketing, and other administrative duties. The agent became the team leader—all advertising was essentially in this person’s name.
As the years have progressed, some teams have grown large, employing as many as 30 to 50 people and including marketing specialists, listing coordinators, transaction specialists, and support staff. Production capacity has increased tremendously, but challenges abound. Team leaders must take on enhanced leadership roles, and they must also split compensation with the brokerages they work with, as well as the specialists they employ. The amount of management increases, but so do the rewards of success.
The Right Time to Start a Team
The idea of a team is definitely appealing for agents who are either on their own or within a partnership. How do you know if you’re truly ready to take the next step? Consider the following scenarios:
- You have more leads than you can service: The leads are rolling in, but you are turning some down because of time and resource limitations.
- You have more business than you can service: If work/life balance is suffering because of your success, it may be time to consider a team.
- Your production has plateaued: You may be on the cusp of taking your business to the next level, both in terms of clients served and commission, but your workload is holding you back.
There’s no magic number of how many transactions you should have before starting a team—factors such as the market, the economy, and your own goals will dictate if you’re ready—but a good rule of thumb is about 30 to 40 deals in a year. At this level, you might be able to hire team members and still make enough commission to achieve the success you seek.
Structuring a Real Estate Team
As you start your team and it grows, the structure of your staff will evolve. For small teams with up to five people, that structure can include yourself as team leader, two to three buyer’s agents, an assistant who might also serve as transaction coordinator, and possibly a marketing coordinator.
For teams of six to 10 people, you’ll likely add an executive assistant, a dedicated transaction coordinator, an operations manager, a listing agent, and an inside sales associate (ISA) who only works with leads.
For mega-teams of more than 11 people, more ISAs can be added, as well as a listing coordinator and assistants to the buyer’s agents.
Team-Building: The First Steps
If you are on track to create your own team and expand your business, some planning will be necessary. These are just a few of the steps to take as you start the process of building a team:
- Write a 12-month business plan. This will vary from traditional business plans you may have devised as an independent agent, because you now must consider the size of your team, what each team member does, how your team will be compensated, and so on.
- Create an organization chart of how your team will be structured.
- Write thorough job descriptions for each role on the team. Setting clear expectations now—for your team members and for yourself—will prevent any disputes about who does what later.
- Determine how you will recruit people for your team.
- Work with a brokerage that understands how to support teams and team leaders.
This post offered some highlights of our webinar—be sure to check out Wendy’s entire presentation to learn more about team job roles, compensation, and the importance of working with a brokerage that truly understands the dynamics of working with teams.