A 2017 report from Inman focusing on real estate teams found that 60 percent of responding agents who weren’t on a team would consider joining one or starting their own. For successful solo real estate entrepreneurs, joining a team may feel like a retreat from all of the effort they put into their businesses. However, creating and building their own team is often an intriguing idea.
The prospect of starting a team can also be daunting. Many solo agents aren’t sure if they are ready for such a bold move, despite the benefits they can realize by leading and molding a team. The following questions ask where you are with your business and can help you determine whether a real estate team is a good fit for your future goals:
How many transactions do you handle each year?
Answering this question (or any of the subsequent questions in this post) with a specific number is tricky, because so many factors—including personal goals, market conditions, geography, cost of living, and more—go into what is average, above average, or excessive. With that in mind, 40 is a good ballpark figure of how many transactions an agent should be handling before considering expanding into a team. Without sufficient deals, you might not have enough revenue to pay team members and yourself. At 40 yearly transactions, you likely have hit an upper limit on what you can accomplish on your own and are also making enough to comfortably expand.
How many leads do you average in a month?
Leads are essential for all agents, but don’t think of the answer to this question as a hard and fast number, but rather in terms of how many leads you want to average every month. An agent with fewer leads and more transaction success may not want to add many more. Alternately, someone who is an expert at sifting through leads and finding the best prospects will want as many as possible. If you are struggling to follow up with the leads you already receive, a team can pick up the slack. And if you don’t seem to have time for marketing and advertising strategies to boost lead production, team members skilled in these areas can also help.
How much time do you spend on the phone?
If you seem to always be on the phone at the expense of everything else, you might be ready to start a team. Communicating with leads is, of course, critical to turning them into clients, but when you don’t have time for all of your other tasks, you’ll struggle to provide great service to those clients. Assistants and other specialists can easily follow up with leads and answer questions that are called in, thus allowing you to focus on other parts of the business. Or if you enjoy calling leads, other team members can ensure you have time for that by attending to the important tasks that you never seem to get to.
How many cold calls/emails are you doing?
Cold calls and emails can produce leads for your business, but they can also be laborious and take away from your other responsibilities. If you rely on cold contacts, a team structure is great for getting those calls made and emails sent without as much hassle on your part. Moreover, if cold calls are your primary means of finding leads, your other marketing strategies might be failing—which means it might be a good idea to add specialists who can develop and execute additional ways to reach potential customers.
How is your work/life balance?
Putting in the long hours to make your business a success is admirable, but if all that work prevents you from enjoying the fruits of your labor, what’s the point? Skipping out on vacations because you might lose out on sales, or not spending any weekend time with your family so you can run open houses are good indicators that your work-life balance has swung too far toward work. A real estate team allows you to shift some of that burden and gives you a break from feeling as if you must work some more every night after dinner.
How comfortable are you with delegating?
Letting a team of specialists and assistants handle much of the critical work that otherwise bogs you down seems like an easy proposition, but for some people, it’s difficult. After all, your business is your baby, and letting go is not easy. Starting a team and then not letting your coworkers do their jobs will ruin efficiency, fail to improve work-life balance, and lead to unhappy employees. Delegating responsibility may be a personal transition for you. If you think this adjustment will be too hard to make, leading a team might not be your best move.
Do you handle diverse markets and types of clients?
If you branch out, or plan to branch out, from your core real estate focus, starting a real estate team offers numerous advantages. One person handling a variety of real estate disciplines—from residential to multi-unit to commercial, from rural to suburban to city, from VA to FHA loans, from distressed properties and foreclosures to luxury properties—may become overwhelmed and never quite develop into an expert in any of these areas. A team, however, gives you room to hire specialists for a number of diverse markets and personas. This versatility allows you to focus on what you do best: engaging with customers and closing deals.
How many people can you afford to bring on?
After recognizing that a team structure will be beneficial to your business, the next concern is determining how big that initial team will be. Hire too many people and you won’t be able to pay them all—a team offers an opportunity for growth, but that growth isn’t so immediate that you can bring on a small army right away. However, if you don’t hire enough talent, realizing the benefits of a team may take too long because you might still be saddled with the same resource management problems you had before.
Do the math. Determine how many transactions will be necessary to reach your goals, how many people will be required to reach that number, and how much you can reasonably compensate those new team members while increasing profitability.
Remember, teams are inherently scalable, so whatever you come up with now can be adjusted when you want to expand again (in fact, planning for that growth now will make pulling the trigger on future moves easier). Real estate teams provide tremendous opportunity. Planning carefully now can foster success at the start of your venture and well into the future.
What concerns do you have about starting a real estate team?