Real Estate teams are all the rage. Everywhere you turn real estate agents are forming a team. Before you make the move to start a team or join a team, think about how you want to run your business. The first question you need to ask is this, “Is a team right for me?” As with everything in life, there are pros and cons to being on a real estate team. For newer agents the idea of being on a team is ideal. What’s not to like? You can get training from an experienced agent. You don’t have to prospect for leads and you have back up. If you’re a newer agent and are approached to join a team, make sure you know what you’re getting into. Don’t be afraid to ask questions. If you don’t know what questions to ask, talk to your broker. They will be able to provide guidance.
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Do Your Homework Before Joining a TeamIt’s important that you do your homework before joining a team. Assuming that the real estate team is profitable can lead to disappoint. The profitability of the team depends on how it is structured.
- Will you have a buyer’s agent?
- Is there a separate listing agent?
- Does the team need a licensed assistant or an unlicensed assistant?
- Are all of the team members compensated the same?
- What is the job description for each team member?
Show Me The MoneyAs an outsider looking in, it’s easy to assume that teams make a lot of money. Teams post large volume numbers, that look very impressive. Since money is a driving force for many real estate agents, the team concept seems to be the way to go. But do teams make as much money as you think?
What Are the Costs of Joining a Team?Most teams have more overhead than individual agents, so they may not be as profitable as you think. In addition, each team member may have to be compensated after the settlement of each property. Depending on the structure of the team you may be expected to contribute to the marketing expenses. This could include expenditures that you don’t necessarily agree with, but as part of the team you must pay them. Your split may be lower or higher than what you would receive on your own. Some team leaders feel that since the leads are given to you, you don’t deserve a higher split because you didn’t spend any money prospecting.
It’s Not Just About MoneyWhen a team is structured where there is only one listing agent, you won’t get the volume credit for bringing in a listing lead. This can have a huge impact on you and your business if you ever decide to leave the team. When another broker checks the multiple listing service they won’t see your name as a listing agent anywhere. It will look like you’re a brand new agent.
It’s All Good, Until It Isn’tLike any relationship, it’s true bliss in the beginning. Then you start noticing the little things that annoy you about your partner. Next thing you know, everything about them is annoying. When talking about forming or joining a real estate team, be sure to talk about the separation agreement. You may not think it’s a good way to begin a relationship, but you’ll be sorry if you don’t. This is a business arrangement. You want it to last, but things happen, people change and goals change. Expect the best and prepare for the worst.
The Real Estate Team Separation AgreementThink about how the team get divided up should there be a parting of the ways.
- How will the open house leads get divided?
- Who gets to keep the team name?
- Who gets to keep the phone number?
- How will the clients be divided?
- Will all parties agree to rebrand?
It’s Your Decision to MakeForming a team can be a great way to build an amazing business, but it is still a business and should be treated as such. If you are approached to join a team, make sure to ask questions about your role and responsibilities. If you don’t like the responses you receive, don’t be afraid to pass on the opportunity. As a real estate agent you are your own boss. Take some time to think about how you want to run and grow your business. It may be trendy to be on a real estate team, but it doesn’t mean it’s right for you. Be prosperous!
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As an active Realtor licensed in three jurisdictions, I approach real estate training from a different perspective. With over 18 years in the real estate business, I teach agents what it’s really like to be a real estate agent.