The Pros and Cons of Real Estate Agent Teams
The real estate market is always changing, and there is one trend that continues to be getting stronger every year. Team hires are the future of the industry. And the future is now. Total team domination is one of the hottest trends in real estate right now. In the United States, there are approximately 35,000 to 50,000 teams. And I predict that in 3 years there will be over 100,000 teams. Are you ready? Is your business ready? What needs to change to make sure you are ahead of the curve?
As you already know, the power of a team can always outperform an individual. There is so much you need to do to be a successful real estate professional. From the lead generation, marketing, setting appointments, negotiating, transactions, and paperwork, trying to do it all on your own is nearly impossible. That is why the benefits of a real estate team are showing up in more markets every year.
Not every real estate hire was created equal though. And unfortunately, we are seeing some good and bad practices when putting together a team. Whether you are considering joining a real estate team or if you are already part of a team, we will break down the benefits of a real estate team, how the structure works, and the real-world tradeoffs so you can make a smart decision.
How does a real estate team work?
How does a real estate agent team work? In most real estate team structures, there is a team leader who drives vision, standards, and lead generation, and the team members support clients and production through clearly defined roles and shared systems.
While the team leader often takes the reins by generating most leads, guiding team members, recruiting, and managing performance, the rest of the team operates like a leverage machine. Clients can contact any team member for questions or concerns, which can increase responsiveness and improve the customer experience. Team members may host open houses, work with buyers, and manage follow up, while the team leader often focuses on listings, high level negotiation, referrals, and hitting the big goals.
Together, the leader and the team offer support to one another to reach milestones and achieve success. One of the biggest benefits of being on a real estate team is that you are not operating alone, you are operating inside a playbook with people around you who can help you move faster.
When it comes to splitting commission as a real estate team, there are different routes a team can take. The most common way real estate teams split commission is the fixed commission split model. Through this structure, the lead agent will split the commission on a consistent basis for each transaction, such as 60% and 40%.
However, the way teams split commission varies based on team structure and goals. For example, some teams with multiple agents may split commissions based on who did the bulk of the work. No matter the structure, it is important to have the commission split in writing and that it is easy to understand so there is no confusion between team members.
Real Estate Positions and Titles on a Team
If you have ever wondered about real estate positions and titles, here is the simple truth. A great team runs on role clarity. When people know what they own, what success looks like, and who the handoff goes to next, the entire business becomes more predictable.
Common real estate positions and titles you will see on strong teams include team leader, showing specialist, buyer agent, listing agent, listing coordinator, transaction coordinator, operations manager, marketing manager, and ISA or OSA for lead follow up. Your exact org chart will depend on your volume, your market, and whether your leader is more of an artist or an operator, but the goal is always the same: create leverage and protect the client experience.
This role clarity is one of the most overlooked benefits of a real estate team because it removes guesswork, reduces dropped balls, and helps everyone improve faster.
Structure of Real Estate Teams
Teams are an amazing way to leverage time and resources. In my nearly 30 years of experience coaching rockstar agents like you, I have noticed there are four different types of team structures in real estate. Not every real estate team structure is successful, which is why it is important to learn about the different team formations and which ones produce results. Learn more about each structure below to determine which category your team might fall under and which structure to move toward.
1. The Illegitimate Team
The illegitimate team is not really a team in the traditional sense. This is just a group of people who all do the same thing and started selling together. Think of this as more like a bunch of salespeople without anyone to run the operational side of the business.
2. The Family Team
You have probably seen a family team and they are very popular. Although everyone is related, roles are not clearly defined as to who is doing what. Also, family teams usually have to put the business on hold when they all go on vacation.
3. The Hero and The Minions
I am sure you have met the hero agent leading the team of minions. The hero agent is great at what they do, but they are huge control freaks. These are the types of teams where burnout is common and people are always coming and going. The hero can be tough to work with and they are usually the kind of person that does not play well with others.
4. The Team Builder
There are some rockstar agents out there who know their stuff and hire a team to help support them in the other areas of their business. They realize that with a team they can grow the potential of the business exponentially. This is because the team builders know the team is the vehicle to maximize everyone’s strengths to better serve the customer and take the business to the next level. This is one of the clearest benefits of a real estate team when it is built the right way.
No matter what kind of team you have, we recommend the Team Builder approach. You will find that the type of entrepreneur who leads the team can vary greatly. The team must be structured to account for the team leader being an artist or operator.
Pros and Cons of Real Estate Teams
Teams in real estate offer plenty of great advantages, but they are not automatic. If you are weighing the pros and cons of being on a real estate team, you want to look at the full picture, including support, standards, commission structure, and culture. Done right, the benefits of being on a real estate team can accelerate your skills and your income. Done wrong, it can feel like you are doing work without control.
Pros of Real Estate Teams
- Support: Working on a team offers plenty of support when you need it. When part of a real estate team, you will work with a group of people striving for the same goal, allowing you to learn from one another and succeed. This is one of the biggest benefits of being on a real estate team for newer agents.
- Lead generation: Finding leads is one of the primary duties of being a successful real estate agent. In a team setting, there will be more people working on generating leads, which can eventually lead to more clients, which is a win win for everyone involved.
- Improved work life balance: Taking on all of the responsibilities that come with being a real estate agent alone can be a challenge. When working on a real estate team, more tasks can be delegated amongst the group, allowing you to create a healthier work life balance that allows you to grow personally and professionally.
- Shared resources: Part of being on a team means working together. One of the top benefits of a real estate team is that you are able to share resources with one another, such as leads, software, tools, and marketing materials.
- Education: In an industry that is rapidly evolving, it is crucial to stay up to date on news and trends. When you join a real estate team, you will be able to learn from your peers about the newest changes that affect the industry, market trends and changes, and new marketing tips to expand your business.
Cons of Real Estate Teams
- Less control: While working on a team means you get to work together, it takes away from some of the control and freedom you would enjoy as an independent real estate agent. This means running new ideas by your team members to determine whether everyone is on board or if it needs to be scrapped or tabled for another day.
- Commission split: One of the top drawbacks of working on a team in real estate is that you will have to split the commission, which is less money in your pocket. Additionally, the larger the team, the larger the split, which means your team will need to generate more leads and close more deals than an independent agent in charge of their own success. When joining a real estate team, ensure the commission split is clearly detailed so there is no confusion.
- Negative team dynamics: In some cases, the dynamics of your real estate team might not be healthy. Unfortunately, not every personality type meshes well with one another, meaning you can find yourself in disagreement with another team member, which can stall progress. In turn, this can cause stress and undesired results. This is why it is always important to evaluate the culture of a team before joining to ensure you will be a good match.
- Lack of personal branding: When you join a real estate team, you are working on building the brand identity of the company, not yourself. Depending on where you see yourself in the future, this can make it difficult for you to turn your name into a brand. This belongs on every honest list of the pros and cons of being on a real estate team.
How to join a real estate team
How to join a real estate team starts with getting clear on what you want to learn, what support you need, and what standards you will commit to, then choosing a team whose systems, culture, and coaching match your goals.
Interview the team leader and at least one agent on the team. Ask how leads are generated, how training works, what the commission model is, and what the expectations are for daily activity. Look closely at role clarity and real estate positions and titles so you understand who does what, how handoffs work, and what success looks like in your seat. The best benefits of a real estate team show up when you join a team with strong accountability, clear numbers, and a culture you actually want to be part of.
Learn From Some Of The Best Real Estate Team Leaders
When you have a team structured in the right way, with the right people it is incredibly powerful. I have been privileged to talk to two amazing team leaders recently.
Tim Smith
Check out this interview with Tim Smith as he talks about the rewards and challenges faced by leading a rockstar team of agents. I loved what Tim had to say about hiring an assistant.
Heather Sittig Jackson
I also interviewed the CEO of Relola, Heather Sittig Jackson. Heather and I talked about the different aspects of a team and why it is critical that you hire the right people. I really loved what Heather had to say about hiring based on your team’s values.
Babushka Doll
Whether you are looking to start your real estate agent team with just an assistant or take on five or six people to build your team, you need to remember one thing.
Have you ever seen one of those Russian nesting dolls? It is a big doll that splits in half and there is another doll inside that is a little bit smaller. This keeps going several more times with the dolls getting smaller in size.
I bring this doll up because this is what most people think hiring a team is. The ego and desire to feel important causes many agents to hire someone smaller than them. If you want to achieve massive success in your business, you have got to add rockstars to your team that are committed to doing big things.
This means not hiring based on ego, but instead finding the people who think and perform big and are dedicated to growing the business.
2 Types of Team Entrepreneurs
1. The Artist
This is the vast majority of the people in the real estate business. They are high energy qualitative, and emotional and their decisions are made based on their gut and emotions.
2. The Operator
These are the people who work off of checklists, processes, systems, and numbers. What we have found is that the artists make all the money in this business when they have an operator. The key to building a great team is to get educated and gather the right information to make the best decisions possible.
4 Solutions to Common Team Problems
1. Read
There is so much good information out there on building teams that you are doing yourself a disservice to not be prepared.
Here are a few: Our CEO Manual, The E-Myth, Good to Great, and In Search of Excellence.
2. Know Thyself
Know who you are. Are you an Artist or an Operator? Build your team accordingly.
3. Define Roles
No matter what type of team you have, make sure that every team member’s duties are clearly defined.
4. Build the HUB
The hub is the back end of a smart and successful real estate business.
A team has the training, culture, operations manager, listing coordinator, transactions coordinator, direct response marketing, marketing for branding, nurturing (ISA or OSA), sales, and client satisfaction.
With this structure, you can then add as many sales agents as you have space for. Not sure if you are ready to start your own team? Simply sign up for a complimentary coaching consultation to find out all the ways we can help you and your business improve.
Final Thoughts on Real Estate Teams
Are you wondering how to join a real estate team? At Tom Ferry, our real estate coaching programs can help you in every aspect of your real estate career, from building a strong business foundation to connecting with industry leaders and building or joining a team. There are numerous factors to consider when joining a team in real estate, and our coaches can provide the mentorship and real estate tools to help you make the best decision for yourself and your career.
Whether you are a veteran agent or just starting out, our real estate coaches can help. You will gain exclusive access to resources for success, such as tips on how to create a business plan and eight rigorous levels of curriculum. Add a Tom Ferry real estate coach to your team today to see how you can succeed. If you want the real benefits of a real estate team, you need structure, standards, and coaching that keeps you focused on the right activities.
Recap: Real Estate Team FAQs
What are the benefits of a real estate team?
The benefits of a real estate team include faster response for clients, shared resources, clearer systems, and role based leverage that helps you close more deals without trying to do everything yourself.
What are the pros and cons of being on a real estate team?
The pros and cons of being on a real estate team usually come down to leverage versus control. You can gain training, leads, and support, but you may trade some independence and a portion of commission for that leverage.
What are common real estate positions and titles on a team?
Common real estate positions and titles include team leader, buyer agent, showing specialist, listing agent, listing coordinator, transaction coordinator, operations manager, marketing support, and ISA or OSA roles for lead follow up.
How does a real estate team work day to day?
If you are still asking how does a real estate team work day to day, it works through defined roles, clear handoffs, shared standards, and a leader who measures activity and performance so the team can improve every week.
What are the benefits of being on a real estate team for newer agents?
The benefits of being on a real estate team for newer agents often include mentorship, more opportunities for appointments, and a faster learning curve because you are executing proven systems instead of guessing your way through every step.
What should I ask before joining if I am comparing teams?
When comparing the pros and cons of being on a real estate team, ask about lead flow, training, expectations, commission structure, role clarity, and culture so you know exactly what you are joining and what the path to growth looks like.
