Ultimate Guide to Joining a Real Estate Team in 2021
In this guide, I will show you how to join a real estate team that will either give a good start to your real estate career or take your existing business to the next level.
20 years ago, I went through this process myself. A couple of years later, I started my own team that I’ve been running up to now. Based on my two-decade experience, I will share with you the essentials of selecting the best real estate team for your needs and give you tips on getting accepted.
Let’s start with classifying real estate teams by organization structure and compensation types.
Types of Real Estate Teams
The structure and hierarchy of a modern real estate team can be almost anything. Teams can range in size from two agents sharing an administrative assistant to more than 30-member teams that resemble a small brokerage.
No matter what the size is, the intention is usually the same — to provide a higher level of service than a solo practitioner, by leveraging specialized talent. The goal for a real estate team is always to provide exceptional service through team development.
The structure of a team almost always starts with a sole proprietor making their first hire by adding an assistant. This initial hire lays the foundations for subsequent additions to the team.
Back in the 80’s, RE/MAX founder Dave Linegar encouraged RE/MAX agents to hire an assistant. In a now-famous quote, Linegar said: “If you don’t have an assistant, you are one”.
This trend opened the door for specialization within the agent’s own business. Agents began to realize that if they could outsource administrative tasks to a specialist, they could focus their efforts on taking care of their clients which in turn led to a higher level of service and customer satisfaction, and of course, more business.
Team Types by Leadership
The loosely organized team. This is usually a group of agents that might share an assistant, the same company, and cover each other’s business.
The family team usually starts with a solo agent bringing their spouse into the business followed by the kids as they come of age. Unless the team is carefully managed, it can mirror the same dynamic as the family. Subsequent non-family team members consistently feel like outsiders.
Top agent team. This team is built around the leader who is generally the top agent at a brokerage. While this person may be good at generating leads, they are not always a team player or a great leader. Just because someone is a successful real estate agent doesn’t mean they can run a successful real estate team.
Top real estate agents are often difficult to work with and are too demanding. Top agent teams tend to see a high turnover of team members and can be a difficult place to work.
The great team. Successful teams share many common factors. But the primary one is a great leader. This doesn’t necessarily have to be a top agent with years of experience.
The great real estate team leader understands how to maximize and leverage other people’s skills and abilities. They also continuously push to make the team better by implementing systems and strategies. Successful teams tend to be run like a successful franchise operation.
Team Types by Organization
The magic to putting together a great team is in the organization of roles on the team. Most teams consist primarily of agents for 80-90%. This is because agents should be driving revenue which is the lifeblood of any team. The subsequent support staff roles associated with a team generally account for the other 10 to 20% of the team.
It’s this 10 to 20% that really establishes the functionality of a team. These support roles should be filled with specialists that are able to do their job at a higher level than an individual agent could.
Support roles are usually defined by the particular market a team operates within. For example, teams that work in luxury markets would most likely emphasize marketing functions or concierge-type services.
On the other hand, teams that specialize in selling a higher volume of homes priced closer to the median sales price for an area would need more help with transaction coordination and day-to-day errands.
Here is a list with some brief descriptions of the most common roles real estate team members perform:
- Agents — these are the sales people who should be responsible for working with home buyers and home sellers. Sales agents are the direct income producers on a real estate team. Because of this, they generally account for the largest portion of the team. Agent roles can include: buyers agents, inside sales agents for handling incoming leads, and listing agents.
- Managing Broker — every real estate organization needs to have a Managing Broker. In many cases this role is handled by the team owner. In the event the team is under the umbrella of a larger brokerage, that company will have a Managing Broker. In either case, the managing broker will have a big impact on the way your team operates. This is an important role and one that can make or break a team.
- Marketing Specialist — this role is very important for a real estate team. Many teams start with one marketing director and then hire additional marketing specialists to handle specific niches. These people need to be experts at their jobs because it is one of the most public-facing aspects of the team and is responsible for creating a brand image for the entire team.
- Administrative Manager — administrative support is essential to a team’s success. It’s easy to get bogged down in personnel and day-to-day administrative issues. Administrative work is a productivity killer for salespeople, and they are not generally very good at it.
- Transaction Coordinator — a transaction coordinator takes care of the day-to-day details of each transaction the team has going. They make sure all of the deadlines are met, the earnest money is where it should be and the deal is moving towards closing. This person keeps the agent in the loop as to what’s happening on the deal and if they need to get involved in particular details.
- Open House and Showing Staff — these responsibilities are generally taken care of by a licensed agent or realtor. The idea is to put agents in situations to meet and prospect new home buyers. Teams use very structured sales processes as well as scripts to turn cold buyers into new clients.
- Assistants — this position can cover everything from answering phones and greeting guests to transaction coordination.
- Team Leader/Manager — while we have described many of the organizational positions on a real estate team as being very important, none are more important than the team leader. This is the person who implements the vision and steers the ship.
- Runner — many teams will employ a runner to handle things like signs, earnest money, and errands. This is a huge time-saver for busy salespeople.
This list of job descriptions should help you start understanding the value of having a team as opposed to a sole proprietor being able to master all of these jobs alone. There are countless other job descriptions a successful real estate team could create. The structure of a team is always based on the particular market they are working in and the type of business they do.
Team Types by Compensation
Compensation models used by real estate teams can be very much like the structure or organization of teams themselves. While the best real estate teams are all about innovation, the traditional commission split is still the primary basis for agent compensation.
In the National Association of Realtors’ most recent study of real estate teams, these are the most common compensation plans ranked by percentage of popularity.
You can learn more about agent commissions from the article How to Choose the Right Real Estate Brokerage to Work For as a New Agent by Kristina Morales written for Real Estate Bees. Below is a short summary of eight main models.
- 38% — fixed commission split (under 100%). The fixed commission split model is the throwback to the early days of real estate brokerage. In this scenario, the salesperson receives some percentage of all deals they close. Depending on the plan, this can look like 50/50, 60/40, 70/30, etc…While an agent might scoff at the idea of giving up that much commission, on this plan they actually have little to no expenses. If you have been an active agent for a while, you understand this is a big deal.
- 22% — graduated commission split. In this scenario the more the agent sells the more they get. The team would establish what is known as a company dollar. This is the amount of money the company needs to make from the agent. This number resets every year but once the agent meets their company dollar, the commission split changes in the agent’s favor. Depending on the plan, this can continue up to 100% going to the agent.
- 13% — 100% commission split. In this model, the agent keeps all of the commission. The team would make money from the agent in the form of a monthly office bill consisting of various fees.
- 5% — salary plus a share of profits/production. In this scenario, the team pays the agent some form of salary plus a percentage of the overall team profit. This is an interesting scenario for a couple of reasons. First, it requires the team to be very transparent about costs and profits. Second, it changes the status of the agent from an independent contractor into an employee. This changes the dynamic of how the agent can be used within the team.
- 4% — capped commission split. This method sets the company dollar for each agent. Once that company dollar is met, the agent moves to a set split usually 95-100%.
- 4% — commission plus profit sharing. This option is a hybrid option that puts the agent on a higher commission split but incentivizes them with profit sharing.
- 3% — salary only. This option treats the agent as an employee. This allows the team to establish rules like working hours, where the agent works, etc. without violating the IRS’s independent contractor rules. It also provides the agent with a sense of security, while many agents would prefer the traditional independent contractor commission plan. There are a growing number of real estate brokerages and teams that are moving to the salary-only model, and their agents seem to be pleased.
- 2% — share of profits only. The profit-sharing only model is the least popular option but there are teams that employ this method.
How to Choose the Most Suitable Team Type?
Real Estate teams are not a one size fits all solution. The variation in team structures, organization, and day-to-day operations are what make them so attractive.
For example, a newly licensed real estate agent would be wise to look at a team that provides training and leads. This means they should look at the Great Teams or the Top Agent teams (types described in one of the previous sections) in their area.
While a more established agent could certainly look into these types of teams as well, they would probably be better served by the Loosely Organized team or some other type of hybrid team that leverages resources.
The experienced agent is looking for support as well as financial relief through expense sharing. This is best accomplished by finding other agents in the same position.
It’s important to look at where you are now as well as where you want to be 5 and 10 years down the road. Choose a team that can give you the guidance and resources to get there.
Pros and Cons of Joining a Real Estate Team
Teams are not for everyone, especially not for those looking to build their own business and create their own brand.
On the other hand, they are a great alternative for someone looking to jump start their career and become a successful real estate agent quicker. Teams provide leads, structure, support, and training.
All of these are essential elements for a new realtor. If you have the opportunity to join a team, carefully consider if it’s the right choice for you. If the answer is yes, jump in and prepare to grow.
Let’s go over the important factors to help you decide if joining a team is the right choice for you.
Do You Have the Right Personality for Being on a Team?
Joining a team is a great opportunity for the right person and torture for the wrong one. Success on a team is determined by your personality and your preferences for the working process, as well as what success looks like to you.
If your motivation for being a real estate agent is building your personal brand and your personal book of business, you’re probably the wrong person for a team. This type of personality is better suited as a solo agent or a sole proprietor.
If on the other hand, you are looking for a way to provide your clients with a high level of service while you learn a lot about the business and you aren’t concerned with who gets the credit, you might be a good candidate for a team.
Working in a Real Estate Team vs. Individual Practice
The day-to-day work life on a real estate team is different from that of a solo agent. The solo agent is responsible for everything related to the current transactions they are involved in as well as prospecting for new business.
If the solo agent doesn’t consistently prospect, their business will experience peaks and valleys. In other words, when they are busy closing transactions, if they aren’t prospecting, once those deals close, the agent has no new business, so they start prospecting again. This cycle continues on and on for solo agents.
On a team, members’ responsibilities are clearly defined and team members work within their specialization. There are people in charge of managing the current transactions and others in charge of prospecting: processing leads resulting from their real estate SEO efforts, managing social media pages, and conducting other lead generation processes.
This helps keep the volume of business at a consistent level in order to realize their real estate goals without constantly switching gears between transactional work and prospecting.
Time away from the business is another point of differentiation between life on a team and life as a solo agent. When the solo agent needs to get away, their business either goes on hold or someone they trust must watch over their in-process transactions.
A well-run team will have time off planned for every team member at some point throughout the year. When members do take time off, there is a solid reliable plan in place to make sure their responsibilities are covered.
Now, let’s summarize real estate team benefits and drawbacks.
Pros of Joining a Real Estate Team
#1 Learning from the Experienced Team Members
The purpose of a real estate team is to improve the level of service provided to their clients. This is accomplished by leveraging the right people as specialists to perform the various functions related to the business.
The benefit for newer real estate agents is that they get to be around other real estate brokers performing at a very high level. The learning curve in real estate is steep and being a member of a team helps flatten that curve.
#2 Prospect of Steady Income
Another benefit of being on a real estate team is the prospect of steady income. Real estate sales can be a very inconsistent source of income. Because of their structure and ongoing lead generation efforts, teams tend to have more consistent business therefore more consistent income in spite of the lower commission split.
#3 Building Your Own Clientele
Your clients will probably receive a higher level of service with the support of a team. This is a great benefit, especially as you are building your business. Don’t forget these people will become your past clients, and you want them to see you as someone they’re willing to refer to their friends and family.
Cons of Joining a Real Estate Team
#1 Disagreements with Colleagues
Anytime you work with a group of people, there are challenges. The likelihood that you will have issues with some of the other team members is great. Working through that can be difficult and often compromises your experience.
#2 Lower Compensation
Another aspect of real estate teams that realtors have problems with is compensation. While the compensation may be steady, it will most likely be lower than you would make on your own. This is the sacrifice you’ll have to embrace if you choose the team route.
The good news is that the longer you stay on the team, the more volume the team can potentially produce, which eventually makes up for the reduced commissions.
3 Essential Questions to Ask When Joining a Real Estate Team
There are three essential questions to ask before joining a real estate team. Let’s go over each one.
#1. What is the structure of the team?
Before you go too far, you need to make sure the team is well organized and well-run. You don’t want to end up on somebody’s team that has no clue what they’re doing. It is a little too easy to say “I’m forming a team come join me”.
Unless the team has established lead generation methods, established administrative staff, and established transaction management, you should not risk joining. It’s important that you don’t jump from team to team, and starting out on a team that’s destined to fail is simply a bad idea.
#2 What will my role be?
If you are interested in being a salesperson, then you need to make sure the plan is to have you in a sales role. Sales roles on teams generally include the following responsibilities:
- holding open houses
- showing homes to buyers
- Showing homes to renters
- cold calling
- door knocking
- writing offers
- negotiating offers and inspections.
Notice that most of these responsibilities are related to working with buyers. In most cases, the team leader or listing specialists will be responsible for the listing appointments and working those deals.
Listings take more knowledge and experience, so on a team, they tend to be the domain of more experienced agents.
#3 What training options do you offer?
While ongoing career development is important for anyone in real estate sales, it is essential for new agents. Teams will offer a wide range of different training options, everything from classroom training to in-the-field experience.
I have found the most effective method to be a combination of both. A good team should offer a range of learning options that will prepare you to operate as a competent real estate professional.
This example of a mentorship program by a Colorado Springs real estate agent team, Springs Homes, shows what a good training includes to effectively develop a newbie agent into a top producing realtor.
If you are a newbie, look for a team having a solid training and mentorship program rather than just providing you with studying materials that you need to process on your own.
The most effective approach is to have an experienced professional guiding you through each step during your first deals and helping you avoid common mistakes new real estate agents make during their first year.
#4 How does the compensation work?
While you certainly don’t want to lead with this question, it is something you need to ask during the interview. If working on the team won’t generate enough income to pay your bills, you’re going to have to find another job to work until it does.
It’s important to know that there are teams looking to take advantage of new agents. While you certainly can’t expect to start at the top of the pay scale, you do need to pay your bills.
Avoid joining a team that uses you as free labor. Talk to other team members or other people you know on teams to learn about what other real estate team members make in your market.
How to Get Accepted
Bringing on a new team member can be costly for a team. This makes it important for them to get the hiring process right from the beginning. Because chemistry is so important on real estate teams, many top real estate teams will use a personality assessment tool to get a sense of how a new team member might fit in.
Good teams are always looking for new talent, and savvy team leaders will always at least engage in the conversation about joining their team. It’s refreshing to be approached by agents about joining a team, so don’t avoid asking.
If you do get the opportunity to interview for a position on the team, they want to know that you’re willing to work hard, learn, and contribute to the team. Teams will often create an opportunity for what they consider to be the right person.
It’s also important to be very transparent about your experience. Teams aren’t necessarily looking for the most seasoned agents. In many cases, experienced agents don’t fit into the team culture very well. They bring their own experiences and opinions which often makes it difficult for them to embrace the systems the team has in place.
In most cases, the team is looking for somebody that will fit into the culture, work hard, and ultimately be trainable.
Where to Find the Best Real Estate Team to Join?
There are many ways to find real estate teams for your consideration. First, ask your colleagues and acquaintances for recommendations. First-hand experience is always a valuable insight.
Then research teams on your own. Browse through the directory of the best local real estate teams at Real Estate Bees. This directory features top realtor teams across the United States rated according to their level of service and reputation.
In the directory, choose your location and select a few real estate teams in your area for an interview. Perhaps, one of them will be your new working collective that will take your real estate agent career to the next level!
About the Author
Joe Boylan has been a Realtor in the Pikes Peak Region for over 20 years. He has been a Colorado Springs REALTOR® since 1997 and as a first-year agent, he received the Real Trends Magazine “Rookie of the Year” award. Since then, Joe has participated in hundreds of real estate transactions.
Joe operates a boutique real estate company in Colorado Springs, Colorado. He also writes about issues affecting home buyers and sellers, current trends in the real estate industry, and their impact on the Front Range real estate market.
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