- Real estate teams can surround and guide new agents while offering resources and the opportunity to scale.
- Others see teams as setting agents up to grow someone else’s business -- while multiple communication channels can confuse clients.
Teams have become a permanent fixture in today’s sophisticated real estate environment, and proponents argue that they can give agents the best of both worlds: Work-life balance and top producer status.
Moreover, the formula can provide new agents the opportunity to pay their dues and learn the ropes before clients trust them with a deal that could forever impact their financial future.
But do real estate teams come with a dark underbelly? Does their true purpose operate in the best interests of the client, or are they all about agents getting more business? Finally — can they be a nightmare to work with?
Here, two industry pros give their seasoned and dueling perspectives.
Read on and hear the case for (presented by Jill Penman) and against (presented by Charlie Peterson) real estate teams.
‘So how many homes have you sold?’ The case for real estate teams
By Jill Penman
If you are new to real estate, you’ll soon find that it’s way too competitive to tackle on your own. You’re better off joining a successful team to learn the inner workings of the business.
Today, even if your sphere is strong, very few savvy buyers or sellers will want to put one of their largest investments in inexperienced hands when they already know half a dozen or so skilled and successful Realtors.
The reality of becoming a successful real estate agent has changed significantly while the perception of what it takes to be successful remains the same.
We are in a world where past experiences, credentials, consumer reviews and successful outcomes are the drivers for an agent’s successes, compared to the personal relationships of days past.
Yet ask the average person whether it’s hard to become a Realtor, and they will likely tell you it’s a piece of cake, with training taking only a few months to earn the title.
Sell a few houses a year to friends and family and just like that — success.
Meanwhile other occupations, even those far less complicated and with far less compensation, require years of schooling and accreditation.
In some ways, the skeptics are right. Every week more and more people with little to no necessary skills or qualifications take a few weeks of classes, study and hang their license with a broker to swiftly become agents.
It just does not seem fair, until you dig a little further and look at the successful and effective agents.
Both foundation and scale
Let me suggest a different reality.
When I started my real estate career over 15 years ago, I was already a highly skilled, college educated sales executive with a proven track record of results.
I understood human drivers and motivators, I was adept at matching product to client needs or desires, a skilled commercial negotiator, highly organized, process driven and autonomous — needing little support from “corporate.”
I had just moved from Chicago to Miami, where positions in my former field — high-end software sales — were limited. However, real estate as a profession runs in my family, and I was exposed to the interesting world of South Florida real estate through my own home purchases, so with confidence I decided to “get licensed,” which I did without delay.
A few short weeks later, I was ready. I had met with several brokers and decided where I would join.
I was a bit surprised at the lack of broker support for new agents given the new agent/low volume commission splits, but figured I could handle it — how hard could it be?
I created a brand, put together some marketing materials and even launched a website (which was not very common at the time) with the help of my marketing/techie husband.
And just like that, I was a Realtor. One who, at a cursory glance, looked very much like any other successful Realtor.
All this skill and confidence, and there was one thing that just kept haunting me: What am I going to say when my first potential client asks me, “So how many homes have you sold?”
Every response I could think of sounded silly and ridiculous. “Let me handle one of your largest financial and life happiness decisions; don’t worry, I think I am going to be really good at this.”
It was then that I realized that my education as an agent had just begun. I immediately shifted my efforts to seeking and pursuing local top producers looking to expand their teams. I joined with the leading top producer as a buyer’s agent and basic “do it all” team member.
From there I toiled for years, training through hands-on experience.
‘Let me handle one of your largest financial and life happiness decisions; don’t worry, I think I am going to be really good at this.’
I worked on every aspect of the business, including showing homes, overseeing inspections, guiding appraisals, hosting open houses, driving buyers all over Miami, hanging signs and labeling post cards. Along the way, I leveraged my prior experiences to strengthen my client care services and perfect the art of selling luxury homes.
I stayed on that team for over four years before deciding to go out my own, eventually creating my own team.
It is in the construct of a team where I found the real education I needed and now where I find the scale I need to manage the complexities and realities of being a Realtor today.
What’s in a job description?
As you can see, I am pro team not only for new agents, but unless you find a real niche with low complexity to drive leads and sales, being on a team is nothing short of survival.
I personally feel that in today’s complex environment, the team construct fills a necessary void between the support most traditional brokers provide and the ability for a lone agent to manage all aspects of a successful real estate business.
This goes way beyond what I initially sought when I joined a team: hands-on training and to leverage the name, brand equity and track record of the top producer I was working for.
Think of all the skills and attributes needed to be successful in today’s market:
- Self-motivation with the ability to create your own opportunities
- Good intuition with people and managing difficult situations and conversation
- Processes with mature organizational skills and relentless follow-up
- Knowledge about bleeding-edge technology and how tech is disrupting and changing consumer purchasing behavior and expectations
- Skill in brand building and all aspects of marketing
- Deep understanding related to financing and commercial models
- Basic understanding of legalities and legal negotiation
- Planning and event execution abilities
- An extroverted, social personality to drive networking and build relationships
If you were to read this list, you would think it was a job description for a highly paid corporate position geared toward a post-MBA student, not for an agent, due to folks’ dated stereotypes.
The idea of taking this all on as an individual is daunting, and I can’t think of many agents I know (who have recently entered the industry with success) that did not start or stay or even venture back with a team.
Gaining resources, experience and credibility
So, for you new agents, I hope this helps you see why joining a team makes sense.
Think of the investment in resources that can be shared across the team to create leverage and scale for you.
Think of the instant experience and credibility a team can provide to you and your clients.
Think of the camaraderie and friendships created in teams that naturally exist in so many other jobs and industries. Think of your time spent on that first team as part of your education, as part of you truly “becoming an agent.”
It is your internship, your apprenticeship, your residency, your on the job training — or whatever you want to call it. The good news is unlike most education, you could get paid to do it, instead of paying for it and accumulating years of student loans.
I leave you with a few thoughts on how to find the right team and how to be a successful team member:
- Work with a team that has a proven track record.
- Pursue multiple teams, and look for people who share the same values and will be a good chemistry fit.
- Communicate your commitment and restrictions clearly to set mutual expectations.
- Look for an exchange of value: what will you give, what will you get.
- Real estate is hands on, so don’t think any task is below you. Show me a successful top producer, and I’ll show you someone who is not afraid to hold an open, set up their own appointments or drive around town hanging signs.
- Don’t be distracted by early success. If it seems easy, don’t be so quick to do it alone in order to avoid the commission split. Chances are your team and its track record is why those early deals seemed so “easy.”
- Look for a team that will allow you to adapt and grow. Find that situation where if you are successful, so is the team — and vice versa.
Jill Penman leads the Jill Penman Group, a team of real estate professionals dedicated to finding the ideal home for the homebuyer and selling the unique property of the homeseller. The group specializes in the Miami real estate communities of Coconut Grove, Coral Gables, South Miami, Pinecrest, Key Biscayne and Miami Beach.
Real estate teams: The latest pyramid scheme?
By Charlie Peterson
Teams, groups, collectives — whatever you call them, they make “traditional agents” reach for that second glass of wine, and before it’s drained, we’re wondering why we’re surprised another transaction went south: “If teams are so damn good, why aren’t they any good?”
As agents, we should be extremely supportive of one another. In fact, two of my favorite agents in my local market lead teams, and they are some of the savviest agents and client-centric businesses around. That said, it is evident that they are not the norm.
We need to constantly take a hard look at how we do things, why we do them and where we can improve. I have dealt with a plethora of teams and collected immense feedback from agents/brokerages, and it is undeniable that we experience consistent issues specifically related to the team model.
Doesn’t every model have its own issues? Yes. But these new issues don’t absolve the problems of traditional agency, they append new problems on top of what is already there.
What’s in a team?
First, let’s define what I mean by “team.”
“A real estate team is a group of agents working under a common brand with segmented skill sets and responsibilities.”
Specifically, let’s visualize a team leader, with multiple buyer’s agents underneath him or her, along with a support staff of listing coordinators, contract coordinators, etc.
Here’s my concern with the team model: I don’t believe it was birthed by asking how we can best serve our clients, nor has it flourished and produced better agents under its popularity.
Rather, it is a product of how we as agents can do more business, earn more commissions and control our own people without becoming principal brokers.
Let’s explore three myths associated with teams:
- Teams are specialized in their roles.
- Agents advance under the mentorship of their team leader.
- Because the team works together, they implement better systems.
Teams are a specialized group of agents, so they say.
For example, a buyer’s agent works with only buyers. Because I work with buyers and sellers, I know both sides to this real estate coin.
As a result, my skills as a listing agent are sharpened against the blade of my skills working with buyers. Are my offer-writing skills better because I also understand the mind of sellers? Yes.
Knowing this, would I ever hire someone to help me buy a house who had never actually sold a house? No.
When teams say specialization, what we experience is limitation. The one thing teams are specialized in is finding themselves in conflicts-of-interest with clients exponentially more often than traditional agents, but that is an article for another day.
Finally, administrative help is obviously very important, but when contract coordinators try to negotiate inspection repairs on a property they have never even been to, I have a problem.
Until there are scratch-and-sniff inspection reports, how will they understand the mildewy funk in the basement? Or understand the gravity of repairing the fence when Cujo lives next door?
More than just the house, real estate is context and lifestyle. As such, there is no substitute for a quality agent shepherding his or her client through every step, coffee-to-close.
More than just the house, real estate is context and lifestyle.
One thing’s true about real estate: It’s easy to get a license and difficult to make a career.
I fear the team model attracts new agents because it helps them get busy fast — growing someone else’s business.
They often start as buyer’s agents — the bottom of the pyramid — with opportunity to advance over time to learn other skills and maybe, someday, start a team of their own. Except this rarely happens.
Are all the buyer’s agents from three years ago the team leaders crushing it today? No. Why? Where are they?
Most of them fizzled out, mainly because it is difficult to split your commission more than once, all while not learning how to be anything other than a buyer’s agent.
By nature, the system’s design restricts the advancement of new agents, though maybe not intentionally.
Much like network marketing companies, new recruits are introduced to a high-energy team, work their asses off, realize only the person at the top makes a lot of money and eventually fade away.
Why don’t we just leave the pyramid scheme to makeup and vitamin companies?
If people don’t automatically trust you, and subsequently you’re forced to rely on a team leader people actually do trust, you are in the wrong business.
Trust trumps everything. Your skills will improve in time. So in the meantime, get a mentor from your office. No one willing to mentor you? You’re at the wrong office.
If you are the trustworthy, hardworking agent who started a team, when someone calls you to help them buy a house, and you say, “Let me introduce you to my buyer’s agent over here,” how does that make the customer feel?
After all, they wanted to work with you. They trust you. They didn’t call your buyer’s agent, but you.
But since you only work with sellers — because who has ever heard of a team leader specializing in buyers — this is what your model does.
It’s the same reason we don’t switch mechanics, dentists, etc. Don’t make consumers switch agents. Take business you’re qualified for, and refer out what you are not.
If there is one constant thread of grumbling in the real estate community regarding teams, it’s bad systems.
Who is the representative? Who am I negotiating with? Who’s in charge? Who am I supposed to be talking to? Why does this agent I’ve never heard of want to make sure he or she is listed on the paperwork?
These are the sort of questions and comments I see in threads all the time.
Don’t get me wrong! I and other “traditional agents” are all for well-run teams, but as my favorite agent “on the street” in Tacoma, Washington, has said, the mythical well-run team is a unicorn in our industry.
Bad agents will be bad agents whether they are on teams or not, but at least we knew who we were dealing with before. Now we have too many cooks in the kitchen.
Are teams the evolutionary result of a stagnant industry desperately needing change? I hope not.
Rather, I hope we’re in the middle of an evolutionary shift where we learn new things, try new things and push ourselves to something new. But this can’t be it.
Team leaders sometimes resemble the guy at the gym who loudly asks how much you can bench, while also skipping leg day each week.
To be the fittest agent, you can’t neglect half of the market. Working your triceps will help your biceps grow stronger, so working with sellers will strengthen your skills with buyers — and vice versa.
To the buyer’s agents who are closing 50 transactions a year and splitting their commission twice: Why not do half of those transactions for a year, splitting your commission once, and implement a strategy to grow your listings the coming year?
Lose the pyramid and false impression of mentorship, advancement and a fruitful career under this model. We’ve seen what teams can do; I’m not impressed, and my glass is more than half empty.
Charlie Peterson is a Realtor with RealtyTrust Residential and the thought leader behind CharlieKnowsHomes.com. You can follow him on Twitter and Instagram.