Should I Start a Real Estate Team?

One of the questions Realtors regularly ask me is whether they should form (or join) a team. And my answer is always: “Maybe! And maybe not! It’s a complex question!” 

It is key to unpack what you think you need by starting a team - and then figure out what you actually need, and the most effective way to make that happen. 

If you want any sort of business partnership to last (and I view any team arrangement as a partnership even if you’re not sharing ownership/profits), it’s critical for the interchange of value on both ends to be strong, and for the alignment between all involved parties to be even stronger!

If you’re thinking of creating or joining a team, here is my 4 step framework on getting the “match” right and defining the interchange of value between all team members: 

First and Foremost: Personal & Business Values Match

When you’re partnering up with someone for business purposes, the first step is to ensure that you are a match for what each of you value. Here are some points I encourage you to clarify and discuss with potential business partners: 

• What are your personal / business values? 
• Make a list of the top 5 things that are a must (or a must not) for you. 
• What personal morals and standards are really important to you?
• Know your deal breakers. It’s important to understand that the way people behave in their personal lives will always show up in their work relationships and behaviors, too. 
• What kind of lifestyle do you lead? 
• Example: everyone on my team is a mom of young kids. There is an implicit and explicit understanding about how that impacts each of our ambitions, schedules, and availability. It’s really important to each of us to have total permission to put our families first. As a corollary, we all prefer to work remotely, and prefer meeting up for lunches instead of happy hours. These “little” things aligning make it a lot easier to collaborate and vibe organically. 

Do not pass go if the values match is missing!! A values mismatch can cause extreme friction, heartache, or even put you in situations where you are working with someone who is behaving in ways that can damage you or your reputation. 

Step Two: Team Culture Match

Culture and values intersect, but they’re not quite the same thing. I define Culture as the way team members treat each other and communicate. I suggest you clarify where you stand on these questions: 

• How do you prefer to communicate? Are you all about face time in the office, or are you happy to Slack & text with your colleagues the majority of the time?
• Where do you stand on working virtually? If you decide you want to run a virtual team, and interview someone who is most successful when they come to an office and see their colleagues every day, that could become a source of friction or dissatisfaction quickly. 
• Where do you stand on mandatory meetings? If you want your team to meet regularly in a certain format and on a certain schedule, that’s something to clarify and communicate before you partner. Some teams are very formal, structured, and traditional. Some teams are looser and collaborate more organically. Many realtors get into the industry expecting lots of freedom with their schedule, so it’s important to define when and how often you meet (and why). 
• What is your business relationship tone and style? What is important to you in how your colleagues treat you and vice versa? Do you want to be best friends with your coworkers, or do you prefer a relationship that is purely professional? 
• What leadership benefits are on offer? Whether you’re the leader or looking for a leader - it’s important to evaluate what the leader has to offer. How much real estate experience and wisdom do they possess? How much leadership and management experience do they have? Are they overwhelmed with their own production and business chaos, or are they readily available to dedicate time and energy to supporting their team members? (That last one is a major challenge in many teams). 

Assuming you have a values & culture match, that’s when it makes sense to explore the details on the business side.

Step Three: What Value Do You Bring To The Table? 

The entire point of a team, in my opinion, is to have a meaningful interchange of “value” where everyone is more successful because they work together. You can define success in countless ways. What’s important is that you define what success is for you, and what value you need from another party to get there (and what value you can give to help them get to their version of success, too). 

I encourage you to look at the value conversation in both directions. Make a list with two columns - what value do you bring to the table, and what value do you need from prospective business partners? 

These are the key things to account for in the real estate team value equation:

• Leads: If you’re forming a team, do you have leads to offer? How many? (If you’re joining a team - these same questions apply!) 
• One thing I ask every person who tells me they want to start a team is “Do you have an abundant overflow of something you can offer your team members?” If you don’t have excess leads, time, and/or administrative & marketing support - what exactly are you planning to give your people? The most successful team leads start building a team when they have extra leads and administrative capacity that they can offer to their team members. 
• What’s the quality of the leads that are generated? 
  • A boatload of Facebook leads with a 1% conversion rate that require 10 hours/week of conversion are, in my book, way less valuable than one referral lead per week that converts at a 95% ratio and takes 5 minutes to convert. 
• This is something that gets skipped over super easily! Quality factors include source of the lead, skill & training required to convert, conversion rate from lead to closing, price point, and location. 
• Here’s an example of a conversation I encourage prospective team members to have: “You give out leads? Awesome! What’s the source of those leads? What is the conversion rate on those leads? What time, technology, and habits are required to convert those leads?” 
• Listing & Contract to Closing Support: Whenever a team is offering any sort of administrative support, I like to know specifics. What exactly does the support entail, how comprehensive is it, how custom is it to each agent, and what limitations are attached to that support, if any? Is this an outsourced resource or an in-house resource? 
• Marketing Services: There are a million things that “marketing” could mean in real estate! Assess the quality and depth of support available around:
• CRM - Assess the caliber and usability of the CRM, as well as what marketing tools it provides, and what the team expectation is around usage 
• Marketing Campaigns - What will the team do to market both itself and its team members? What is the strategy? How strong is that strategy, and how modern is the implementation, branding, and design?
• Nurturing a Sphere of Influence - What tools, systems, and mentorship are available to help individual agents grow their own sphere? 
• Events - Does the team plan & host events? Are team agents allowed to invite their entire sphere or a limited number? How often are the events? How valuable are they? Will the team market and fund every aspect of the events? 
• Printed Collateral & Gifts - Everything from listing/buyer presentations, flyers, and brochures, to business cards, promotional items, birthday cards and closing gifts 
• Social Media - What exactly is provided, and is that support for just the team brand, or the agent’s personal brand as well? 
• Web Presence - Including website(s), Google presence, etc. 
• Innovation Check - Is the team’s marketing cutting-edge, beautiful, and effective? Or is it dated and unattractive?
• Operations, Systems & Infrastructure - This is a big category and should include:
• Team technology platforms
• Checklists
• Policies & Procedures
• Email templates
• Automation systems 
• Proactive operational planning & support from a leader or administrator 

Here is the big Value Exchange mistake to avoid: Lack of Self Honesty

It is really important to evaluate yourself honestly regarding the exchange of value. Where are you crushing it with bringing value? And where do you have an enormous gap that needs to either be disclosed candidly, or addressed by a team partnership (or other strategic hire)? 

One of the biggest sources of team member dissatisfaction and turnover is getting a rosy sales pitch at the outset and then finding out that __fill in the blank__ is actually poor quality, inconsistent, or nonexistent. 

Be honest with yourself and others from day 1, and save yourself the trouble of team turnover or needing to change teams repeatedly. Seriously!

Last and Final Step - Check the Details!

Assuming you were able to check off steps one, two, and three, then you’re probably down to assessing the finer details of the value interchange and mutual expectations. 

Here’s a checklist of key items to evaluate:

• Team split specifics, including any variation in splits depending on buyer/seller/renter, and/or source of the lead
• I recommend running numbers on last year’s production if you were to have led a team or been on that team, versus your current arrangement or being solo. This is a simple and illuminating exercise. 
• Who owns the data & leads? If your buyer agent leaves, do you give them their sphere from the team CRM? And do you keep that data or delete it on your end? 
• What requirements are in place regarding team branding and systems - including marketing materials, CRM usage, team email usage, phone numbers utilized, etc.
• What expectations are in place around being present in the office, mandatory meetings, suggested meetings, socializing, schedules, communication, and anything else that’s really important for your lifestyle and personal schedule?
• What opportunities are available or can you create to facilitate team member growth - whether that’s opportunities for ongoing training, more flexibility, leadership, bigger investments in marketing & business development as time goes on, etc. 
• Is there a written team agreement that specifically outlines all financial arrangements, data ownership, non solicitation provisions, etc? And was it drafted by a lawyer? 

Here’s the bottom line…

Forming or joining a team is a big deal. While it isn’t life or death, it is generally a major project that takes a lot of mutual time, energy, resources, and perhaps even money to unwind if it doesn’t work out.

Just like buying a great investment property - doing really strong “homework” up front makes or breaks the success of the deal. 

The most important thing you can take from this article is that an honest assessment of your gaps, and where you can have them most successfully and efficiently addressed, is absolutely key to any successful real estate team decision.

Do you want to tap into my expertise on team-building?

Reach out to me to schedule a consultation and we can talk more about how I help ambitious Realtors achieve their goals. Click here to book a call with me now!