12 Apr Real Estate Teams :: Joining A Real Estate Team
What is all the fuss with real estate teams?
Real estate teams are a hot topic in most parts of the US and Canada right now.
When we use the phrase “real estate team,” we are usually referring to an operation where there is an experienced agent leading the team and other administrative and sales staff working under the same team name or team brand. Typically, the team is named after the agent who put it together, like the John Smith Team.
There are also alliances between individual agents that could be called “teams,” but those are usually just two stand-alone agents who join forces for division of labor purposes. It is also common to find husband/wife teams.
To make it even more confusing, Keller Williams calls the managers of its offices “Team Leaders.” These are the local CEOs responsible for the success of the local office. They are not the same as the sales teams that exist in their offices and the leaders of the sales teams do not call themselves “team leaders.”
How do real estate teams work?
There are many ways real estate teams can be put together, and there are some general features shared by most teams.
Common features:
- Leader of the team provides capital, leadership, training and systems.
- Centralized lead generation efforts.
- Team name branding.
- Specialized team members, such as buyers agents, listing agents, showing assistants, etc.
- More than one physical location or market.
In most cases, the teams are formed by an experienced agent who has an overflow of leads and hires people to help manage the excess business as they become busy. The best model we’ve seen is when agents hire administrative help first in order to maximize their time and build scalable systems, then they start hiring sales staff members for their teams.
Even though we know this is the best path, agents still occasionally try to shortcut the process and hire sales staff before they hire administrative staff. That doesn’t work. Please don’t do that.
How do real estate team members get paid?
There are two general compensation models on real estate teams: commission-based and salary-based.
In most cases, the administrative staff is salaried and the sales team works for commission. Every once in a while, you’ll find salaried sales staff members. When that compensation model exists with sales team members, it usually means the percentage of commission they earn for closed transactions is much lower.
A salary plus bonus for a sales team member would mean the team owner is taking more financial risk, so the team owner will keep a large portion of any commission dollars coming in the door to compensate them for taking that risk (the risk being the salary they have to pay regardless of how many transactions close that month). When the sales team members are working only for commission, the percentage of commission the team owner keeps is much lower because the sales team members are taking more risk.
Why would someone join a team instead of building their own team or working alone?
The biggest benefits of joining a team are the existing systems (including lead generation), training/coaching from experienced agents and what we like to call leverage (through other team members). When a team has specialists in each of the various roles on the team, that allows everyone to focus solely on their area of the business. This is a much better way to run a business than the “jack of all trades, master of none” approach.
Some people aren’t wired to build their own teams, but they make GREAT agents focusing on one thing on someone else’s team. Those situations are a true win-win and everyone achieves more when they work together in those sorts of settings.
New agents sometimes prefer to work on a team to get some experience. Sometimes they stay on the team forever, and sometimes they get a few years of experience before working on their own or starting their own teams.