If you’ve gone to a National Association of Realtors (NAR) or Inman conference in the past few years, you’d think that every agent in the country is trying to figure out how to build a team. But the reality is more sobering. According to the 2022 National Association of Realtors’ Member Profile, the percentage of agents on teams actually went down by more than 4% last year.
Why? Well, you could blame the market, but we have a sneaking suspicion most agents gave up because they didn’t take the time to learn how to build a team the right way.
To get you started on the right path, we decided to use our 40-plus years of real estate experience to walk you through everything you need to know to build a thriving real estate team in 2023. We cover getting started, the most efficient team structures, building your tech stack, which team members to hire and when, and wrap up with seven common mistakes new team leaders make.
How to Build a Real Estate Team in 2023
Before embarking on your quest to dominate your real estate market with a team, you need a plan. Here are the step-by-step instructions for getting your team up and running.
1. Get Approval & Guidance From Your Managing Broker
Even though real estate teams are legal in all 50 states, you still need to talk to your broker to make sure you know the rules. You’ll also need to get a split and cap agreement in place so you’ll know how much money you can count on from each transaction to pay to your team and cover your expenses. As your team grows and becomes more successful, you can renegotiate with your broker.
Why Managing Brokers Love Teams
Worried about your managing broker approving your team? Don’t be. Leadership in every brokerage I’ve worked for actually encouraged agents to start teams. Why? Simple. Teams require less hands-on management and usually recruit and train junior agents on their own. That means less work for your boss, not more.
That said, if you come to your broker with a detailed plan for your team from this article, they’re more likely to take you seriously and offer help getting your team off the ground.
2. Choose the Right Team Structure
Once you get the green light from your managing broker, the next step is to decide how your team will be structured. To get you started, here is a quick overview of our three favorite team structures for 2023. If you want to learn more about each structure, check out our deep-dive strategy guide at the end of this section.
Mentor-Mentee Model: Teach Them to Fish & Build Residual Income
- Best for: Team leaders who excel at recruiting and training new agents at brokerages with downline revenue sharing like eXp, Keller Williams, and Exit
- Split to team member: 70-90%
- Cost to operate: Low
If you love training new agents and work at a brokerage that offers revenue sharing, the mentor-mentee model might be your best bet. In this model, team leaders recruit, train, and mentor new agents, but instead of feeding them leads, they teach them strategies and systems to generate their own. Unlike other team structures, agent retention is not your goal here. Instead, you mentor them until they are ready to go out on their own to build your downline.
Since you won’t have to reach into your pocket to generate leads for your agents, costs are low. Low costs = better splits. Better splits = less work recruiting new agents. Not bad, right? Of course, this model is not all wine and roses and is not for everyone.
Drawbacks to the Mentor-Mentee Model
If you choose this model, you will spend almost all of your time recruiting and training new agents. If you’re not a skilled recruiter or dislike the idea of having a new face in your office every other month, then this model might not be right for you.
Want to improve your recruiting skills to fill your team with rock star agents? Check out our strategy guide to recruiting. We include 10 foolproof recruiting strategies and scripts to help you find and hire the diamonds in the rough—without the stress.
Team Leader Model: Leverage Your Personal Brand
- Best for: Team leaders with strong personal brands and established reputations in their farm areas
- Split to team member: 50-60%
- Cost to operate: Medium
Have you been building a magnetic personal brand and want to use it as the centerpiece of your team? The team leader model is the perfect fit. It operates more like a boutique brokerage than a traditional real estate team. The only difference is that, instead of a brokerage brand, the team leader’s personal brand is your unique selling proposition.
Rather than endlessly recruiting and training new agents, the team leader model relies on building an actual team to support you. As team leader, you will be the lead listing agent and recruit other listing agents, showing agents, and support staff to keep your operation humming.
Drawbacks of the Team Leader Model
Since you will require support staff, the team leader model is more expensive to start and run than the mentor-mentee model. Also, since your personal brand is what drives this model, it won’t work well unless you have a solid brand and an established reputation in your farm area.
Lead Team Model: Run Your Team Like a Startup
- Best for: Scaling your team without a strong personal brand
- Split to team member: 30-40%
- Cost to operate: High
If you have some cash to burn, a strong business background, and thrive on organization and systems, the lead team model just might turn you into the next Gary Keller. Here, you’ll operate more like the founder of a startup than a leader of a real estate team. Instead of you generating leads for everyone else, a business manager oversees a marketing manager and team of inside sales agents to fill your customer relationship manager (CRM) with fresh leads. Those leads are then fed to listing agents and showing agents, who close them with the help of a transaction coordinator.
Drawbacks of the Lead Team Model
Unlike the mentor-mentee model and the team leader model, you’ll need deep pockets to get this off the ground. You’ll also need to pay your employee’s salaries no matter what your local market is doing. If you don’t have the capital to get through lean times, then this model won’t work for you.
3 Foolproof Team Models: Hiring, Splits, Lead Gen + More
3. Develop a Business Plan & Budget
The management of a real estate team’s business is different from the management of a solo real estate business. Create a plan for what you need, how you’ll pay for it, and what to do with the revenue you generate. Need help creating a real estate business plan? Check out our strategy guides:
4. Decide on a Compensation Model
Instead of splitting a commission solely with a managing broker, real estate team members split it with their team (which has a collective split agreement with their broker). A junior agent split is usually between 40% and 50%, with 60% to 75% for team leaders. There is no standard split for teams with their broker; it usually is similar to the split percentage of a typical solo agent.
What’s different is the cap—typically about 90% of the collective cap of a group of licensed agents of the same size as the team. Why the discount? For the same reason it’s cheaper to buy your toilet paper in bulk. Real estate brokers are usually willing to give up a little bit of their top-line commission income in order to have a better chance of making their bottom-line commission income—a security that real estate teams provide.
Use our guidelines for the split ranges for the team structure you chose as a starting point to decide what to offer your new team members. Since you’re just starting out, being a bit more generous can help you attract high-quality agents. You can always lower them as your team scales.
5. Build Your Technology & Communications Stack
No matter which model you choose, your toolbox can make or break your team. Remember, team members will not rise to the level of your combined talents, but sink the level of your systems. The right software will make it much easier to recruit new agents, and more importantly, reduce stress and confusion.
Here are a few of our favorite tools that are designed specifically for teams. They’re not cheap, but most will let you create accounts for as few as two team members and then add more seats as you scale.
CRM + IDX Website Platforms
Propertybase: This CRM and IDX website platform is designed for teams, and is perfect for maximizing your client communication, lead distribution, and overall efficiency. It’s based on the rock-solid Salesforce CRM platform, so is endlessly customizable and can grow with your team.
Real Geeks: Real Geeks is another CRM and IDX website platform that is built specifically for teams. Generating leads is the name of the game with Real Geeks, so if you’re running the team lead model, then Real Geeks can have a massive return on investment (ROI) for your team.
CINC: CINC’s CRM and IDX platform works almost like an inside sales agent. CINC monitors your incoming leads and acts as your own personal concierge, getting them on the phone, qualifying them, and then connecting them straight to your phone without all the email or text messaging back and forth, saving you a ton of time and upping your conversion rate.
Coffee & Contracts: Want to run the team leader model but can’t afford to hire a marketing manager? Coffee & Contracts is your new secret weapon. They offer beautifully designed templates for social media and print that will make everyone think you hired a $100,000-a-year marketing manager.
At this time Coffee and Contracts has closed its membership until Fall 2023, however you can join the waiting list now and receive access to their free resource suite and get an exclusive discount when they open their doors again.
Market Leader: If you need a steady stream of seller leads without the hassles of running your own platform, then Market Leader is for you. Their exclusive seller leads come from housevalues.com, one of the most efficient lead capture websites on the internet. All you need to do is sign up and start qualifying your leads.
Slack: Want to escape the drudgery of digging through your inbox just to follow up on conversations with your team? Slack, a group messaging platform for businesses, is the 21st century method smart teams use to communicate. No more lost emails; no more scrolling through endless email chains to find that one disclosure file.
6. Hire an Administrative Assistant
If you want to set your team up for success, your first hire should be an administrative assistant. Many new team leaders make the mistake of recruiting junior agents first, only to have them quit or move on in a few months when they discover how much of their time is dominated by mundane tasks. Having an administrative assistant on your team can be an attractive lure for recruiting junior agents.
This person’s primary responsibility is to take work off the plate of the team leader or other licensed members of the team so that they can focus on the real estate-specific tasks that drive new client relationships and closed deals.
This work includes things like filing, calendar coordination and scheduling, communication that doesn’t include real estate-specific advice or strategy, light marketing tasks, errands, sign placement, marketing material delivery, and general office organization.
What to Look for in an Administrative Assistant
The ideal candidate for this position is organized, helpful, and solutions-oriented. They are someone who sees a problem that needs fixing or a chance to increase the efficiency of a daily routine, and fixes it without being told to.
This is generally an entry-level position, so real estate experience isn’t necessary here. But it is helpful, especially if you’re a top producer with a lot of volume.
Overseas Virtual Assistants Offer the Best ROI
If you’re short on cash, or just want to maximize your ROI, consider hiring an overseas virtual administrative assistant. Since administrative work for real estate agents is such a common need, you can easily find someone in the Philippines who has direct experience working with real estate agents.
Hire a Top-notch Virtual Real Estate Assistant in 2023
7. Build Out the Rest of Your Team
Once your team starts closing more deals than your agents can handle, it’s time to scale. While the team model you choose will determine who you should hire next, here is the general order we recommend for most teams.
A buyer’s agent is a licensed real estate professional who works exclusively with house hunters. Because of how labor-intensive the buying process is, successful solo real estate agents can only work with so many buyers before running out of time in the day. When you reach the point where you have more buyers than you have time, a buyer’s agent is the right hire.
What to Look for in a Buyer’s Agent
Team leaders looking to recruit a buyer’s agent should look for someone who is energetic, organized, and motivated. A real estate team is best served by a buyer’s agent who is quick to follow up on leads, can prioritize their time wisely, and isn’t squeamish about getting on the phone in order to convert prospects to clients. So make sure whomever you choose for this role is someone who can crush their outreach and follow-up goals.
The Ultimate Guide to Recruiting Agents for Your Team or Brokerage (+ Scripts)
Anyone who’s working in real estate knows that the business gets divided into two phases: the legwork and the paperwork. That’s why a transaction coordinator is often a perfect early hire. Not only will they free up your buyer’s agents to show more houses, they will also help you attract new agents to your team. A dedicated transaction coordinator is an alluring perk for any agent, experienced or not.
What to Look for in a Transaction Coordinator
The ideal candidate for this position is someone who is supremely organized, a fantastic communicator, and able to manage deadlines consistently. Since the best transaction coordinators are those with previous real estate experience, definitely consider applicants who are former (or current) assistants on other teams and are ready to move up.
The yang to the buyer’s agent yin, a listing specialist does just what their title says: specializes in listing property. In many cases, especially with newer (or smaller) teams, the team leader is also the listing specialist. But as your volume grows, so will the requests for listing presentations. If you’re running the team leader model, keeping your showing agents busy can be a huge problem when the market is slow. Adding another listing agent to your team will keep them on their toes and help your team grow faster.
What to Look for in a Listing Specialist
When recruiting a listing specialist, make sure to look for somebody who has a lot of market knowledge and experience selling property in your community. One of the primary roles of a listing specialist is to perform comparative market analyses, so without an intimate knowledge of what’s selling and what’s not, it’s hard to execute this position.
This person also needs to be a closer. They’ll be going on a lot of listing appointments, performing the final steps of lead nurturing in order to turn a prospect into a client. Make sure anyone you put in this position can consistently get a name on the dotted line.
Guess how much marketing experience is required in order to get a real estate license? Zip, zero, zilch. Guess how much of your success as an agent or team depends on a solid marketing strategy? A lot.
A marketing specialist is in charge of envisioning, designing, and executing a marketing strategy for your real estate team. Their work includes branding, lead generation, referral generation, and property marketing. This role is incredibly important; your marketing specialist creates the messages that your community consumes about you, your team, and the way you do business.
What to Look for in a Marketing Specialist
The ideal marketing specialist’s qualifications start and end with marketing experience. This person should have a track record of success in a broad range of real estate marketing fields, including social media management, email marketing, graphic and layout design, paid lead generation, content marketing strategy and execution, website design, and search engine optimization.
The bad news is the ideal candidate is going to be pricey. Finding all these skills in a single person requires a lot of training, experience, and knowledge—things that don’t come cheap.
The good news is creative marketers are typically hungry to learn and expand their expertise, so if you can find someone who can meet your team’s immediate needs, they will most likely grow into the role as your strategy expands.
Licensed vs Non-licensed Marketing Specialists
Should your marketing specialist be licensed? Ideally, yes. In most states, real estate-specific marketing can technically only be executed by a licensed agent or broker. A non-licensed person can prep all the media, but a licensed agent or broker has to “approve and execute” all messages (literally pushing the buttons to send media live).
Inside Sales Agent (ISA)
An inside sales agent is someone whose primary responsibility is to create new leads with outbound communication, qualify incoming leads, and pass off opportunities to other members of the team for nurturing and closing. This person spends a lot of their time on the phone; they deal with lead communication at scale, meaning they’re shooting to make hundreds of contacts a day.
What to Look for in an Inside Sales Agent
The ideal inside sales agent is someone who is very comfortable on the phone, is a great communicator via email and text message, and has no problem starting conversations with complete strangers.
Inside sales agents are also very comfortable with the word “no.” They understand that rejection is mathematically part of their job and aren’t discouraged by a negative outcome. On the contrary, the best inside sales people see rejection as a step closer to their next positive outcome.
Inside sales agents should ideally have a real estate license. Without a license, these agents can only start conversations—they can’t actually discuss real estate specific topics, a critical component of qualifying leads.
Not sure how to train your ISAs to become lead qualifying machines? Check out our ISA training tips here.
7 Critical Mistakes New Team Leaders Make
Now that you have a better idea of how to set your team up for success, let’s take a look at some common missteps that bright-eyed and bushy-tailed new team leaders make. Our very own Sean Moudry has seen these mistakes crater talented and driven teams many times over the years, and he has a few tricks to help you avoid the same fate.
1. Not Embracing the Platinum Rule
If you’ve made it this far in life, you’re very likely familiar with the Golden Rule: “Do unto others as you would have them do unto you.” It’s another way of saying, “I’ll treat people the way I’d like to be treated.” Maybe that’s your first mistake.
Everyone is different, and perhaps they want to be treated differently! Great leaders embrace the Platinum Rule, as popularized by authors Michael O’Connor and Tony Alessandra: “Treat people the way they want to be treated.” You also need to commit to knowing your people well enough to understand just exactly what that means.
Whether you are applying the Platinum Rule to team members or to clients, it starts by asking great questions. A few to consider include:
- How do you prefer that I communicate with you? How would you prefer to communicate with me?
- If changes need to be made, how much notice would you prefer to have?
- How can we best deal with any conflict that may arise?
2. Not Providing Consistent Guidance, Direction, or Accountability
Leaders often attain their positions because they possess great instincts, act quickly and decisively, take risks, and seek to achieve results. However, the best of the bunch also recognize that successful teams and businesses require people who are supportive, methodical, want clear instructions, and have a deep desire to understand what’s expected of them. In other words, they’re not like you.
Are you taking the time to share your vision, track and measure your progress, and advise your people as to what’s needed in order to achieve your desired goals? If you’re expecting people to read your mind, make assumptions, or operate in a vacuum, you’re failing to understand something pretty basic.
People in our industry join teams and organizations because they want to be a part of something and they want to be led. So, if you intend to be a great leader, you must be accessible, highly communicative, and model the high-minded behavior that you expect from them.
A 10-minute morning huddle (virtual or in-person) allows you to set the tone and goals for the day. Team meetings should be mandatory, held consistently, and offer a value-packed agenda. Accountability starts with you, so make this time sacred and treat it with the significance it deserves. No rescheduling because you have something “more important” to do. This time with your team is the priority.
3. Not Helping Your People Develop to Their Full Potential
If you want to start a team, you have to commit to professional development. What prevents leaders from doing this? Most struggling leaders will never admit this, but I know from experience they are thinking it, and it’s holding them back.
- “I don’t want the people on my team to be more successful than I am.”
- “If I share my skills and secrets, they will take everything I’ve taught them and go out on their own.”
- “I don’t want to reveal the skills I am lacking or what I don’t know.”
It’s important to remember that your feelings aren’t necessarily facts. The idea that you are mentoring people who may shine brighter than you or that you’re grooming your own competition is a mindset problem—you’re dwelling in scarcity. Create an amazing team that provides growth and opportunity, and few will ever leave. If they do, take some credit and be proud. Your leadership likely changed the course of their career—and their life.
If you want to continue to attract great talent to your team, you need to demonstrate how others have grown and prospered as a result of being aligned with you. Leadership requires you to put the needs of others first, setting aside your ego and personal competitiveness. Leadership does not require you to be an expert in all areas, or that you have everything figured out. It’s enough to show them that you care.
Consult with each member of your team and create an individualized growth plan. Where do their interests lie? What skills and proficiencies can be improved upon over the next quarter and year? What impact could this have on their performance and your profitability? Be prepared to identify the people, platforms, courses, and resources to make it happen—and to invest the resources.
4. Failing to Respect Other People’s Boundaries
Let’s get one thing straight—no one is ever going to work as hard as you do to grow your business. You may fly your flag on the “I’m available 24/7!” mantra, but expecting that from others is unrealistic and selfish. Remember the Platinum Rule? Great leaders embrace their people and honor what’s important to them.
Your team members want balance. Balance comes as a result of boundaries. For many, this means regular days off, family time, uninterrupted vacations, and the ability to turn off their phones. If you’re texting and emailing at odd hours expecting an immediate response, demonstrating resentment because someone is dealing with a sick child or an ailing parent, or generally being a jackass, it’s time to STOP. THAT. NOW.
Get a life, leader. Seriously. A life that exists beyond your business. And give your people a boss break!
Pay attention to how you are spending your time and what your people are observing you do. Be willing to share the challenges you are facing and your desire to make positive, impactful changes. Reinforce their boundaries and balance, and seek a peer group to do the same for you.
5. Not Recognizing a Job Well Done
After six months on the job, a once highly enthusiastic, creative, and very skilled marketing assistant for a very successful team suddenly became sullen, withdrawn, and increasingly ineffective in the role. The team leader declared, “I’ve made a bad hire and she has to go!”
Not so fast, sister. Back, once again, to the Platinum Rule.
Had the team leader paid a bit more attention, she would have realized that her employee was an eager-to-please approval seeker. She was motivated by praise and recognition and wanted to be seen and appreciated for her unique and artistic contributions. She wasn’t getting that from her leader—or from anyone else on the team.
“Give her a shoutout in front of everyone,” I said. “Thank her for all she has done and the impact she has had in such a short period of time. Reward her.”
The team leader looked shocked. “Reward her? The paycheck is her reward!”
Yeah—no. While it’s easy and maybe even second nature for leaders to identify what someone is doing wrong, you’ll be better respected and earn greater loyalty when you pay attention to what your people are doing right. So praise them. Thank them. Surprise and delight them. Be the leader others love to work with.
6. Making Big, Business-impacting Decisions Without Consulting Those You Lead
It was easy in the beginning, wasn’t it? You needed to make a decision, so you did. There was no need to seek permission, consult your trusted advisers, or worry how your choices may impact those around you—because when real estate agents start out, we typically are going it alone.
After you start a team, however, there are others to consider. If you’re a smart leader, you’ll ask for suggestions, consider their opinions, and include them in your decision-making process. If you don’t, things can go terribly wrong.
I was once contacted by an agent working for a team on the West Coast. He was in a total panic. With less than three days’ notice, he was told by the team leader that all of them would be moving to a new brokerage, be completely rebranded, and were expected to sign new team and company documents within 24 hours.
But he liked where he was. He loved the brand. He and several others were angry and disappointed that they weren’t considered or consulted in the process, nor were they going to be incentivized or compensated in any way after being so quickly uprooted.
Bad decision on the team leader’s part.
Guess what happened next? He, along with three others, abruptly quit—and hopefully taught their former leader a powerful lesson.
7. Micromanaging & Expecting Perfection From Your Team
Did you hear the one about the top producer who complained about her fifth administrative assistant walking out on her—after she screamed at her in front of an entire office full of people?
She was still irate when she called me to continue her rant. Once she came up for air, I said—quietly and slowly—“What do you think might happen if you decided to treat your employees as well as you treat your clients?” I let her sit in her silence for a few seconds.
She got my point. Your employees and team members are your clients.
If your team or business has become a revolving door—with talented people walking in and disgruntled people walking out—it’s time to take a good, long look in the mirror.
Providing opportunity and a paycheck to others does not give you the right to project your bad mood, unrealistic expectations, or perfectionism onto others. Unrelenting, micromanaging, uncompromising jerks quickly develop reputations—and not the good kind.
Aside from the fact that you’re making it nearly impossible to create a positive culture, you need to remember this: Finding great talent—for sales, operations, or support—is one of the most significant challenges team leaders face. How easy do you think it will be if you have a reputation for being a nightmare to work for?
There is hope for those with enough self-awareness to recognize where they’re falling short as a leader. A therapist, a coach, or a trusted group of peers may all provide support as you seek to correct the behavior preventing you from achieving all you are capable of.
How to Build a Real Estate Team: FAQ
What is a real estate team?
A real estate team is a group of real estate agents and employees with complementary skill sets that join together to close more deals. Teams come in all shapes and sizes—ranging from a duo of experienced agents who work side by side to close deals together to a single licensed agent with multiple unlicensed assistants to a dozen or more buyer’s agents, listing agents, and inside sales associates.
What is a real estate teamerage?
A teamerage is a real estate brokerage that is managed and run more like a team than a traditional brokerage. Think of it as a smaller and more collaborative alternative to a boutique brokerage. For many agents, teamerages offer the best of both worlds. They get the training, support staff, higher splits, and independence of a traditional brokerage, and the one-on-one mentorship offered by team leaders.
I’m a new agent. Should I join a real estate team or a teamerage?
If there are teamerages in your market and you have at least a year of experience, we would recommend joining a teamerage over a team. You will have more opportunities to build your personal brand and generate your own leads in a teamerage without the hassle of leaving your current team or finding a new brokerage.
What are the benefits of joining a real estate team?
Being on a real estate team can yield big benefits for all. Here are some of the standouts:
- Shared costs: A real estate business gets a little less expensive when you can share costs like lead generation and marketing, or even get a better split or cap from your broker.
- Shared expertise: If you’re new to the business or just looking to level up, teams are a great place to learn from others as well as share your expertise. Real estate team members are generally invested in one another’s success, so every time you have a real estate challenge, you’ve got allies to help figure it out.
- Risk mitigation: The real estate industry can be volatile; single agents are completely dependent on their own performance to pay the bills. When you’ve got an unpredictable market, that can be tough. When you’re working with a team, you can rely on the performance of others a little more, making one or two bad months not as difficult a pill to swallow.
What qualifications do I need to start a real estate team?
If you’re a licensed real estate professional, you can start a real estate team. Most teams are started by agents or associate brokers who have reached the limit of the business they can do themselves because they’ve got more leads than they can serve on their own.
However, teams are also started by agents or brokers who want to diversify the services they can offer their clients (for example, by bringing on a commercial specialist or an agent who specializes in rental management), or agents who want to help bring down their operating costs by sharing them across a group.
How do real estate team members get paid?
The compensation model for a real estate team is determined by the team leader. Some team members (like real estate assistants or marketing specialists) are typically salaried or paid by the hour since their positions don’t actually require a real estate license or their work doesn’t directly result in closed deals. Licensed members of the team, like the team leader, buyer’s agent, or listing specialist, typically get paid exclusively by commission.
Bringing It All Together
Building a real estate team is a fantastic way for successful agents to scale up their business and for new agents to break into the industry and learn from seasoned pros. Are you a part of a real estate team? What advice would you give to agents wondering how to start up a squad? Tell us in the comments below.