Editor’s note: This is the first of a three-part series.
At Real Estate Connect, Ben Kinney, who runs one of the most successful real estate teams in the country, claimed, “Real estate teams are the future of real estate.” Whether you agree or disagree, before you go down the path of starting a team make sure you are prepared for what is required.
Team image via Shutterstock.
Although there is some variation in the numbers, most experts agree that once you hit 40-50 transactions per year, your production will be capped at that level unless you hire an assistant or someone else to help you manage your business.
The big “why?”
Most agents start teams because they are stressed out and would like to do more business. If you’re just focused on the money, however, it’s much more challenging to build an effective team. A better approach is to have a “big why” or major goal that you would like to achieve.
Tami Pardee is one of the top agents in Los Angeles. Tami’s team consists of 17 people, two of whom are commercial brokers. Pardee’s “big why” is giving back to her community. This small group of agents has donated over $465,000 to local causes. Their home page highlights their “big why” of giving back very clearly. The results speak for themselves.
Pardee is not alone in this approach. In “Billion Dollar Agent: Lessons Learned,” approximately two-thirds of the agents profiled in that book were actively involved in giving back to their communities or in some other type of charitable fundraising.
If you’re starting a team, identifying your “big why” is the cornerstone on which to build your success.
The primary reason teams fail
The primary reason that teams fail is they lack a business plan. Before starting a team, make sure that you have a written business plan with written goals. Your plan must include the number of transactions that you do now and plan to do, the average cost per transaction, marketing expenses, cost per lead source, Web and print conversion ratios, etc.
Your plan will also include the positions on your team as well as a job description for each team member. Typical positions on an agent team include rainmaker/team CEO, unlicensed assistant, transaction coordinator, office manager, buyer’s agent/showing assistant, listing agent/coordinator, marketing/social media coordinator.
It’s important to identify how you will build your team, what positions you will fill, as well as the job description for each position. Complete these steps before you hire someone, not after.
Teams vs. agent partnerships
While some people call an agent working with an assistant or another agent a team, the most effective teams have one thing in common: All business flows through the team. No one does transactions independently of the team.
The classic hiring mistake
Many agents decide that the best way to start a team is by hiring a buyer’s agent. The results can range from chaos to catastrophe. First, if the lead agent doesn’t have adequate systems and the administrative help to handle additional transactions, adding a buyer’s agent only exacerbates the problems that already existed.
Furthermore, the lead agent must now devote time to training the buyer’s agent. He must also find time to handle the additional management and supervisory duties that having a team requires. As a result, the lead agent often becomes even more stressed out, his systems break down even further, and his customer satisfaction can nosedive.
Whom to hire first
Before you consider starting a team, there is at least one step you can take to clear a big chunk of work off your desk. That step is to hire a transaction coordinator. Prices generally range from $295 to $495 per transaction. You are still available to assist your clients when there is an issue, but taking transaction management off your plate is an excellent first step.
As part of the process, it would be extremely smart to shift to using digital signatures coupled with a robust transaction management platform. The best programs allow you to determine who sees what documents, as well as giving you a digital paper trail that limits your exposure to litigation.
Hiring your first assistant
When many agents decide to hire their first team member, they search for another agent who is new or not that busy. As you may have already concluded, your first hire must be administrative, not another agent.
The question is what tasks do you want to delegate? A great place to start is with what you hate to do.
If you’re like most successful agents, handling details isn’t your greatest strength. You would prefer to be interacting with clients, negotiating transactions and solving transaction issues as opposed to organizing files, managing databases and processes, and reviewing contracts.
A good place to begin this process is by making a list of the 10 real estate activities that you least like doing. Next, identify what you do well. At this point, you have the beginning of two job descriptions — one for yourself and one for your first assistant.
In terms of the person to hire, you want someone who is your opposite but who can work alongside you. Most agents hire someone who has a behavioral profile similar to their own profile. The result is this person often ends up leaving because she believes that she can succeed on her own.
For example, if you are poor at details, hire someone who thrives on details, loves doing spreadsheets, and all those other tasks you hate to do. As part of this process, some questions to answer include:
- Does this person share your vision and your “big why”?
- What is their big purpose? Is it compatible with yours?
- Does this person share your work ethic as well as your sense of fun?
Two excellent resources for evaluating whether there is a good fit between you and a potential team member are Target Training International’s DISC behavioral-style assessment and Tom Rath’s StrengthsFinder assessment.
You have decided to start a team, you have a job description for your first hire, what’s next? See Part 2 to learn more.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of the National Association of Realtors’ No. 1 best-seller, “Real Estate Dough: Your Recipe for Real Estate Success.” Hear Bernice’s five-minute daily real estate show, just named “new and notable” by iTunes, at www.RealEstateCoachRadio.com.