A savvy agent knows the time may come when they need to take on some extra help to ensure their business will keep growing. They may reach a plateau where they can’t take any more listings or any more referrals on their own. At that point, they have to decide whether or not it’s time to form a team.
It’s easy to check off the benefits of bringing more agents and administrative help onboard to form a team. More agents can reach more clients. Back-end staff can handle tasks like marketing and paperwork, taking those chores off agents’ plates. Team members may be experienced in handling certain types of properties, or they may be familiar with markets that the team leader wants to develop. But how did successful teams come about in the first place, and what do their leaders do to ensure continued viability?
Some teams start with an individual agent hiring an assistant to handle administrative duties and finding that he or she is suddenly free to focus more time on growing the business and serving clients. Hiring the assistant might lead to hiring another agent to take on more business. That organic form of growth is common for many agents.
Lance Kirshner, team leader of the LAKE Group within @properties, decided it was time to build a team when he realized he was working seven days a week during peak season. It was becoming difficult to maintain the level of service he was used to providing to his clients. That’s why he hired an assistant to help him in an ad-hoc capacity around the end of 2011.
“I was kind of giving up on building the business,” Kirshner said. “I thought early on that I would build the business and then become a managing broker. That was my game plan. Somewhere along the lines that shifted to, ‘OK, I don’t want to be a managing broker, but I still want to lead people.’ That led into building my team.”
For Lauren Mitrick Wood of the Olive Well team at Compass, it was about balancing two niches at once. She started in the business when she was 18, working in her family’s brokerage. She was licensed at 21 and had a thriving rental business while in college. After graduating in 2005, she moved onto residential sales while trying to hold on to her rental business. Ultimately, she hired a rental agent to help with that side of her business.
“I just couldn’t handle it all by myself after a while,” Wood said. “My work-life balance just died. I was trying to not go too crazy with some facets of the business. I needed some more hands on deck after a while.”
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Rob Morrison of The Rob Morrison Team at Coldwell Banker in Barrington said his team formed because he worked on a deal with a particular agent and that it grew organically from there.
“The business got to a point where having a team was going to be very beneficial from the standpoint of being able to generate additional business,” Morrison said. “A team member of mine contacted me three or four years ago and said ‘Hey, I have an opportunity to represent a large bank. I’m not comfortable doing it myself, and I would only trust you to do it.’ We really enjoyed working together and I brought him on as one of my team members. That was the start of it.”
Plotting the structure
Teams tend to start small, and many remain that way. In fact, the National Association of Realtors’ 2018 survey on teams revealed that 66 percent of real estate teams consist of five or fewer people, though 20 percent were made up of six to 10 members. Only 8 percent of teams have 16 or more people. Still, the study also revealed that most team members aren’t leaders or administrative types; 88 percent of the 3,483 respondents identified their primary roles on their teams as agents.
Although teams tend to start out with a casual partnership or search for administrative help, becoming a team leader is a significant step. Agents should take the time to think about whether they’re ready to assume a role that will require them to lend assistance to other agents as needed while seeing to their own business. Are they serious about providing better service to their clients, or do they just expect the team to help them generate more revenue? An agent who simply wants to lessen their own workload is likely in for an unpleasant surprise.
“A lot of people are under the impression that when they grow a team, they’ll have to work less,” Morrison said. “That’s not true. If you’re doing it correctly, you’re working more. You’re everything.”
Establishing what their own immediate needs are can help team leaders work out what kind of team they want to form. If the first member of the team is going to be an administrative hire, the agent should consider what aspects of business they feel comfortable handing off to someone else or what parts they don’t want to deal with themselves. Paperwork, marketing, scheduling and staging are all tasks that can fall within the purview of an astute assistant or two.
Wood’s business grew steadily from the time she hired the rental agent, but it was difficult at first for her to give up control of the rental end of her business. Once she took that step, she could focus her attention on the sales side.
“I worked with my coach and just put some faith in her and in my hard work,” Wood said. “I was making a little bit of money off of each deal, which was fine. But that was a pivotal moment for me to let go of some of the running around with the rentals.”
The role of leader
Rather than taking a hands-off approach, team leaders tend to remain active as agents while handling additional management tasks. In many ways, these tasks are similar to what a managing broker might take on. Team leaders facilitate communication among agents, mediate conflicts that come up and make sure agents and staff have the tools they need to be successful in the field.
The team leader should also be prepared to evaluate those they’re bringing on to make sure they’re right for the intended role. And sometimes that might not be immediately obvious, so leaders have to learn to be flexible. Kirshner said his first administrative hire found she actually wanted to work in the field as an agent, so he restructured the team to make that happen.
“I knew it wasn’t what she wanted, and I felt like it wasn’t a good fit for her, as far as what I was asking her to do,” Kirshner said. “So, my second hire was an assistant, and that solved a lot of problems. At that juncture, I needed an assistant to help me stay organized to do all the things that we needed to do. That allowed me to transition Laura [Dewey Lando] into the position that she still holds. She co-lists and works with my sellers. She was a great hire, but she had to transition into a role that was a good fit for her.”
Wood recalled that after she was able to offload the rental side of her business, she started thinking about how she could delegate necessary tasks that she personally did not like handling.
“Paperwork is something that I always struggle with,” she said. “After I hired the rental person and an intern, it was like, ‘OK, I need to get organized with how all the paperwork gets stored and who’s doing it.’”
Aside from hiring, there are also legal considerations that go into the leader role. Morrison reviews every contract before it is submitted, after the individual broker and the office administrator review it. He also makes sure all attorney correspondence comes to him, just in case. “If something happens, it is my liability,” Morrison said. “Every broker has their own errors and omissions and every broker is responsible for themselves. However, everything becomes part of the responsibility of the team lead.”
The brokerage fit
Brokerages, especially those with a strong brand identity, may have some top-down policies that teams have to adhere to regarding their branding. They also provide added resources for teams. Wood’s team of two administrative staffers and seven agents was with several brokerages before joining Compass in 2017. She likes the support that a large brokerage provides.
“I was working at a mom-and-pop shop, and then [went to a] bigger firm with Jameson,” Wood said. “They all have their pros and cons, obviously, but I have found that I just like the support available at the bigger companies. They have transaction teams and a marketing department so it’s not just you doing everything.”
Kirshner has been with @properties since 2009 and looks to the brokerage for marketing materials. He also leaned heavily on @properties when figuring out how to build his team.
“I was able to receive some help from @properties in terms of structuring it,” Kirshner said. “I was looking to my managing broker for some guidance on this because I had never built a team before. We can all operate independently, but the procedures and the guidelines really become more important.”
Ensuring the financials pencil out
Agents who join teams will likely have their own set of expectations. They’ll want to have the support of the team leader and administrative staff. If they’re joining a team with a reputation for success, they’ll expect to benefit from that association. Marketing materials and access to new leads are great motivating factors. And there’s compensation.
The commission has to be right for an agent to want to join a team. If agents can earn more individually than as a member of a particular team, there’s not much incentive to motivate them to make the jump. The splits have to be fair and reasonable.
Morrison’s assistant is on salary. The other two agents on his team both receive different commissions based on whether they generate a lead themselves or if it comes from Morrison.
“They get a higher split if they generate their own lead,” Morrison said. “They get a lower split if it’s generated by me. As far as the errors and omissions, obviously, the team members are responsible for that. The incentive to being on the team is that all the marketing is handled by me personally from a financial standpoint, so they benefit from that. That’s a huge load off of an independent broker.”
Wood’s two administrative assistants are salaried as well. Agents receive a split of each transaction, and there are other opportunities for agents who aren’t making sales to earn money. Every transaction has two agents assigned to it to ensure everything goes smoothly.
“There are some agents who might not transact enough on their own,” Wood explained. “The agent on each file will get a flat fee for services like showings and attending walkthroughs or closings. So, there’s a mix of flat fees and agent splits.”
No matter the structure, Kirshner stressed the long-term importance of maintaining competitive compensation for everyone involved. “I felt that I needed my team to be well-paid so that they don’t leave me,” he said. “Turnover is really hard. It’s draining and it’s time-consuming. I’ve always felt like this has to be a win-win for both parties.”