Even though real estate teams have been a force to be reckoned with for more than a decade, it’s tough to address them with anything more than anecdotes due to a lack of data on the phenomenon. Due to a whole host of factors, from the sheer variety of team size and structure to the lack of licensing categories and structures for them, teams don’t turn up in a lot of real estate research.
That’s why we added a set of questions about real estate teams to our reader survey this year. They revealed basics, such as the average size of teams, but also told us that those who have joined teams do not appear to be regretting the move at this point.
‘Uneven playing field’
But just because they appear as a successful option for many of our readers doesn’t mean that everyone is smitten with this relatively new structure in real estate. One common frustration has to do with attributing sales to the proper real estate professional in multiple listing services.
This particular challenge is one our magazine faces as we work to put together our Real Data issue each year (this year’s story came out Feb. 18). It’s an open secret that many of the individuals who appear on that list count on sizable teams to help them reach such heights.
“It creates kind of an uneven playing field, in terms of reporting,” said Mike Muisenga, a broker with Berkshire Hathaway HomeServices Prairie Path, Realtors. Muisenga does brisk business on his own; he appeared in the No. 20 spot on our Real Data list of the top agents in DuPage County in 2018. Still, he estimated that 14 of the 20 others on that same list are actually teams. “I see it as a pretty serious problem.”
Part of Muisenga’s issue with the reporting discrepancies has little to do with our readership but is more about public perception. When consumers compare him to a team leader who has some 150 transaction a year attributed to them, they may be less likely to choose him, thinking he’s not as productive. “I know — I’m in the business — it’s impossible for a single agent to do that many transactions,” Muisenga said. “It directly impacts the income of a single agent.”
A change is coming
The MLS that teams up with our publication to put together Real Data, MRED, has been working on this issue in earnest since late 2017. Chief Technology Officer Chris Haran said he plans to roll out the first phase of changes in team reporting later this month. He’ll offer a first look at the new fields to the MLS’s broker members at their next strategic planning meeting, but Haran doesn’t characterize that as beta testing. The ability to set up teams already exists in connectMLS (there are currently almost 800 teams identified in the system), and the new features will be live for users to begin implementing right away. “I don’t think that we’re that far off” from the reality on the ground, Haran said. “If we have 1,000 teams in the system, I feel like that would be pretty close.”
If Muisenga could design his own solution, he’d require all teams that have more than one licensed real estate professional (including the one team in his office, comprised of his sister and her husband) to report their transactions under a team name. He said he doesn’t have anything against them as a concept, and that he might even join or start a team himself one day. He just wants equal footing and transparency.
But that’s not necessarily the plan at MRED. “Right now it is definitely voluntary,” Haran said of the team I.D., adding that while MRED would consider making it mandatory if the board wanted it, the hope is that the identifier will be so valuable that teams will adopt it universally. “We really want to avoid making business decisions for the broker or the agent.”
Complexities in reporting
To get at some of these issues in our reader survey, we asked respondents how often team leaders are directly and significantly involved in team transactions and how they record transaction sides in the MLS. Respondents averaged out saying that their team leader was involved just under 68 percent of the time, and the question about how their transactions are recorded were pretty evenly split.
But of course, teams only have control over how the transaction is reported when they’re on the listing side. And when they don’t, Muisenga says they often call to complain. “Nine out of ten times, you’ll get a call saying, ‘Hey can you change the agent I.D. in this transaction to Joe? He’s the team leader,’” he said. Part of the reason for his policy on attributing the buy side to the real estate agent who primarily handled the deal comes from his frustration with leaders getting credit for others’ work, but there’s a liability element too. If there are “post-close issues, we want to know who we dealt with.”
Haran said he hopes MRED can also ease the pain there, by making any needed updates more automatic, and by clarifying the connections between buyers’ agents and their team leaders at the outset.
The work never ends
Harran said he hopes to begin delivering this team data to third-party vendors in the third quarter so that team data shows up on listings outside of the MLS. “That is, without a doubt, the cornerstone of the next phase,” he said. “But it will require a lot of changes on the vendor partner side.”
While the bulk of MRED’s efforts to identify, support and properly attribute the transactions of teams may be more or less complete by early next year, Haran said he expects the nature of teams and tech to make this an ongoing issue. “I don’t think it will end. Very few things in technology ever do end,” he said, noting that the popularity of teams, along with real estate data challenges, are still growing. “I don’t see that changing a whole lot in the future.”
Muisenga agreed. “Teams aren’t going anywhere,” he said. “I don’t think they’re bad; I think there are things that need to be addressed.”