According to a recent National Association of Realtors survey, more than 26% of Realtors in the United States belong to teams. Real estate teams are a fantastic way to share the costs of marketing, broaden your expertise, and mitigate the risks that are a part of a volatile industry like real estate.
In this article, we’ll take a look at the different structures successful teams are using in 2020, explore the benefits of teams, learn how to start one, and give you suggestions for the tools you’ll need to be successful.
What Is a Real Estate Team?
A real estate team is a group of professionals with complementary skill sets that join together to close more deals. The NAR Teams Survey showed that the average real estate team had four people on it, 80% of whom had a real estate license. Nearly three-quarters of team members were compensated at least in part based on commissions.
Teams can 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 licensed professionals like buyer’s agents, listing agents, and inside sales associates, sometimes each with their own assistants.
What Are the Benefits of 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 and cap rate 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 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 Are the Roles on a Real Estate Team?
While there are many ways to structure a real estate team, the most common roles that you’ll need to fill are:
- Team leader: A licensed agent or broker who sets direction and strategy for all the rest; someone in charge of hiring, training, and holding the rest of the team accountable.
- Buyer’s agent: A licensed agent or associate broker whose primary role is to service the buyer clients generated.
- Listing specialist: A licensed agent or associate broker who focuses on seller clientele.
- Transaction coordinator: Ideally, the coordinator is a licensed agent who specializes in the shepherding of transactions across the finish line after a contract for sale has been signed.
- Real estate assistant: The admin, or real estate assistant, is in charge of non-real estate tasks like organization, communication, and filing, so that licensed members of the team can focus on activities that directly drive commissions.
- Marketing specialist: This is ideally a licensed agent with an extensive background in marketing and promotion; this person is in charge of every element of public-facing marketing and media for the team.
- Additional specialists: Though the first members mentioned above are the typical “starting line-up” for a real estate team, depending on the needs of your market, there are other players you can add to your team. Commercial specialists, rental experts, or property managers are great options.
Want to read more about each of these roles? We’ve detailed these positions even further, including qualities to look for in a candidate for each role, as well as important tools or platforms critical to success. Click here to jump to these descriptions now.
Who Can Start or Join 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 service 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. Licensed members of the team, like the team leader, buyer’s agent, or listing specialist, typically get paid exclusively by commission.
However, instead of splitting a commission with a broker, real estate team members split it with their team (that has a collective split agreement with their broker). A junior agent split is usually anywhere between 40% and 50%, and 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 rate—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 is cheaper per roll 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.
This may seem like a lot of commission for individual agents considering a team to give up, but remember, this split agreement is taking care of costs like lead generation, a customer relationship management (CRM) tool, team communication systems, a brokerage split, MLS fees, and so on. A major benefit of the real estate team compensation model is that it removes the burden of upfront cost, which is a helpful perk for new agents who are short on cash.
It’s also commonplace for real estate teams to offer bonuses and volume incentives for hitting sales goals.
How to Start a Real Estate Team in 8 Steps
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 Your Broker’s Stamp of Approval
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. Also, you’ll 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.
2. Develop a Business Plan
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? We’ve written an entire article with free business plan templates (including one for teams).
3. Decide on a Compensation Model
Figuring out how you’re going to pay the people on your team is part of your business plan, but it’s so important that it warrants being called out separately. Are licensed members of your team going to be paid salary or by commission? How about non-licensed members of your team? What about freelancers or virtual assistants? Knowing who you’re going to pay, how, and how much is critical.
4. Figure Out Your Lead Generation Strategy
Presumably, one of the reasons you’re starting a team is because you can’t handle all the leads you’re generating on your own. But, as your team continues to grow, how are you going to scale your lead generation efforts to keep the machine running? If you need some suggestions, we’ve written an entire article about the best real estate lead generation companies of 2020, so check it out.
5. Decide on a Communication Strategy
One of the unexpected challenges of running a successful real estate team is getting everyone’s communication flowing. Different people communicate in different ways, so having a single platform like Slack or Microsoft Teams is really helpful.
6. Develop a Growth Plan
Remember earlier when we outlined all the members of your real estate team? It’s unlikely you’ll hire all of them at once. Who does your business plan dictate you hire first? Will you need multiple people in certain roles?
7. Decide on Physical Space
This seems like a basic question, but definitely one that needs answering as a part of your business plan and your growth plan. Where are you physically going to put everyone on your team? Will you have an office with desks for everybody? Will you be operating a remote team? What about when your team grows?
8. Choose Your “Tools of the Trade”
There are lots of tools that you can use to 10x your team’s productivity. Here are some of our favorites:
- Propertybase: This CRM is designed for teams, and is perfect for maximizing your client communication, lead distribution, and overall efficiency.
- BoomTown: This is a website platform designed specifically for teams. When you’re trying to manage a content strategy for an entire team, having a website built for multiple contributors, multiple lead sources, and with different levels of access for your team leader and administrator is critical.
- Zillow Premier Agent: If you’ve got a buyer’s agent on your team, Zillow Premier Agent is a must-have. We all know that our buyers are spending time on the Zillow platform; this is a great way to market to them and get your buyer’s agent’s schedule filled up.
- Asteroom: In a pandemic and post-pandemic real estate world, virtual tours are going to continue to be vitally important. Asteroom is a great tool for getting this job done; their equipment doesn’t require a mechanical engineering degree to operate, and you can get started for less than $100.
- Clozio: One of the most exciting things about a team is seeing all the contracts on the board at once. One of the most daunting things about a team is figuring out how to manage all of them at the same time. Clozio is a fantastic transaction management platform, and it even comes with a slick consumer-facing app that you can give to your clients to keep them up to date on the progress of their transaction.
Real Estate Team Structure: A Closer Look
The roster for a real estate team will vary depending on the needs of the team and the market they operate in. But, there are some well-defined basic roles that make up just about every team out there. Here’s a more in-depth summary of each role on a real estate team.
The team leader does just what you think: They lead the team. Usually the founder of the team, this is the person who’s in charge of hiring and firing, setting team direction and strategy, and ultimately holding each of the team members accountable to their responsibilities, as well as coaching them towards their goals.
Some real estate teams—like a duo of agents where both agents share the same level of experience and seniority in the industry—won’t have a defined team lead. But, just like in any partnership, the team members lean on the strengths of one another, so it’s common for leadership to emerge on particular aspects of the business (e.g., maybe one agent leads the referral generation effort while another takes control of the lead nurturing tasks).
A great team leader is experienced, knowledgeable, and trusted in the industry by their teammates and colleagues. If real estate agents are small business owners, real estate team leaders are the CEOs. A team leader needs to be able to delegate responsibility, train those who work with and for them, and be a driver of positive culture so that their team members stay engaged and motivated to perform.
Hiring an admin or an assistant is a great first step to starting a real estate team. This person’s primary responsibility is to take work off the schedule 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.
The ideal candidate for this position is organized, helpful, and solution-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.
A buyer’s agent is a licensed real estate professional who works exclusively with buyer clients. Because of how labor-intensive the buyer process is, successful solo real estate agents only have so many buyers they can work with before running out of time in the day. When you reach the point where you have more buyers than you have time for, a buyer’s agent is the right hire.
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 (more than 90% of internet leads from sources like Zillow are buyer leads), someone who can prioritize their time wisely, and someone who isn’t squeamish about getting on the phone in order to convert prospects to clients, so make sure whoever you choose for this role is someone who can crush their outreach and follow-up goals.
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 your requests for listing presentations.
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 analysis, 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.
Anyone who’s working in real estate knows that the business gets divided into two phases: the leg work and the paperwork. The leg work occurs precontract, when you’re sourcing leads, nurturing prospects, listing homes, and showing buyers prospective purchases. The paperwork happens once you’ve got your buyer or seller under contract.
A listing coordinator is someone who handles all of the paperwork of a real estate contract—someone who makes sure that every party involved (inspectors, lenders, appraisers, other agents, brokers, and so on) all have what they need when they need it, and that deadlines are being met in order to move the ball down the field.
The ideal candidate for this position is someone supremely organized, a fantastic communicator, and someone who can manage deadlines consistently. Since the best listing coordinators are ones with previous real estate experience, definitely consider applicants who are former (or current) real estate assistants on other teams who are ready to move up.
Since this is the first position on the team where a real estate license isn’t required, you should be prepared to offer a competitive hourly wage. Depending on experience, most listing coordinators start anywhere from $35,000 to $50,000 a year.
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 everything from 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.
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 (SEO).
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.
Should the 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” (meaning literally push the buttons to send media live) all messages.
Though it’s nearly impossible to actually monitor who is pushing which buttons, if there was ever a complaint about marketing for your team and an audit of your practices, having a clear understanding of who is responsible for what is important.
Inside Sales Agent
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.
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.
Bringing It All Together
A real estate team is a fantastic way for successful agents to scale up their business and for new real estate 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 considering starting up a squad? Tell us in the comments below.