I’m Going To Start A Real Estate Team
“I’m getting my real estate license and I’m going to start a team”. These are the words I so often hear from new and newer real estate agents. It’s the new shiny object, the new get rich quick (so they think) and overall the thing to do. The perception seems to be when you build a team you can hire agents to sell for you, have administrative staff to do everything you hate or not good at and is a way to sell a bunch of homes and make a ton of money.
Yes teams can be a way to leverage your time and through that grow your business, they can allow others to perform activities you are not good at or do not want to do AND there is so much more to consider.
What does it mean to be a team?
First let’s define a team by Merriam Webster : a group of people who work together.
What do you think about sports teams like football? How do they dress? How do they act on the field? How do they communicate? How can you relate sports teams to your real estate business? I tend to think about how they have uniforms and what’s on the jersey. Yes they have their name on the back and everywhere else it’s the team logo, the team name and everything they do is for the team. While each player has their own specialty, each understands that every first down gets them closer to scoring. It’s about being together and working together with others who have the same common goal, to win. And I would have to believe that if I were the coach of the team I would want them to act and feel this way about themselves and each other.
Teams That Work Together Are More Productive
I’ve seen real estate agents throw teams together and they have many individuals working on their own separate business while under a team name. And yes to each his own of how you want to run your business however, history shows us that teams that work together are more productive and more successful. The common factor is they have one goal. And when everyone’s actions are in alignment with one goal success happens and when everyone is about the team goal more so than his or her own personal achievements momentum happens. I played softball growing up and I can always think back and remember to the cut off man. If you were an outfielder and you wanted to muscle and show that you can throw from centerfield all the way to the home plate well sometimes and most of the time you just fell short and runs were scored. However those who consistently hit the cut off man and followed the system allowed more outs.
Which Model Is Best For Your Team?
I also see real estate agents partner up with someone very early or throw a team together just because “they don’t want to deal with the buyer leads”. While you can grow a successful team a number of ways, there are best practices and models to follow along your way. One book, the Millionaire Real Estate Agent has several models to follow. There are several factors to consider before you start a team. Number one if you do not have enough buyers and sellers to support yourself to close between 36 and 40 deals per year you likely do not need a buyer’s agent. Remember as you’re growing a team you are now taking over peoples lives you are now partially in charge of their success and their finances. You are their caretaker, their rainmaker and while their production will contribute to the team’s success you’re called a rainmaker for a reason. Have you proven that you were successful in getting business? If not how will you teach someone else to do so and if that person is self-driving and figures it out on their own before you do how likely are they going to stay with you? Not to mention if you do not have systems for support where is the value?
Second, your first hire should be an assistant (not a buyer’s agent) and yes you’ll need to pay that person. The typical person for this job is very detailed oriented and will not want to work on a commission only or variable income. So you will pay this person hourly or salary and with that comes TAXES. Oh you thought it was just going to be $35,000-$50,000 per year? Nope add taxes on top of that and what about bonuses? Because you will be so focused on listings you’ll need someone to do the marketing, unless you want to spend the wee hours doing it yourself because your seller will expect you to market their home.
Next you have showing agents and buyer specialists. Should you be fortunate enough to have a surplus of business to hire a showing agent or buyer’s agent what are the additional costs you will provide as value to them? Yes you will be splitting your commission with them to provide a service to your customers and those agents will still expect other things from you as their leader. Pay their office bill, flyers and other printing, closing gifts, customer appreciation parties, business cards, open house signs/flags, training and education, database software and leads, mentorship and a place/office to call their own.
Team Building & Mentorship
Training and mentorship are a big responsibility. Having agents on your team shouldn’t be to only call your leads, you should want to add to their development of skills and leadership, increase their level of thinking and help them understand leverage and their business. Yes you may train them and they leave and guess what? It’s better than having them out there untrained. I personally welcome the growth of everyone currently or who has ever been on my team.
Your hiring never ends. In addition to providing business for the team you are also now in charge of finding and hiring for the team. Just like leads, people are not begging you to hire them. People will leave you. For some, it will be because you didn’t train them, others won’t find any value in what you provide, some will not buy in to the vision that you have, some will not grow with you, some won’t be able to control their own ego, others will be more concerned about themselves, many will not hold up to the standards you provide or they will leave because you do not have standards at all. You will have interoffice conflict, drama, jealousy, and culture fall out. Your leadership will be constantly challenged and you must chose if you will grow yourself or let ego hold you back.
As your business grows you will hire. Remember building a team doesn’t necessarily mean you will make more money. With every hire you are getting a little more time back. You are buying your time back with people and then you will invest money back in to your business to grow it. A team is a small business and many small businesses go under, so having a budget and managing your expenses is key. You may not even make a profit in your first years.
Having a team isn’t something cool or flashy. It is not always fun or glamorous. You can go broke while watching your team get paid. You bear the burden of bills, marketing and talent. You must ensure you have standards and procedures, contracts for all employees and 1099 independent contractors including your licensed agents.
So why in the world would anyone want to start a team? Well that’s for you to decide. For me it’s about providing a better life to agents that are loyal to my team and to the vision. I would go broke and have been broke so my team members would get paid. It’s not about the money, it’s about providing for them so they can provide for others. Just as an agent gets yelled at, cussed at, disrespected and takes it all so they can see the happy faces at closing, as team owner you will lose money, lose people, be talked and gossiped about, go backwards and broke all to see your team members succeed. There is nothing more rewarding than when members of your team show you how different their life is, the bills they’ve paid off, the people they have cared for and financial independent they now have because of what you chose to build. So really think about this before you say I am going to start a real estate team. They earned it and all the team success is not because of the rainmaker, it is because of the team.
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