- First, ask yourself why you want to form a team. You should be an excellent agent who wants to share your success.
- Work on your time management, business management, personal management and activity management skills.
- Understand the numbers behind your business and know how they should change to support additional staff for a team.
- Build a vision and values for the team that will help guide your activities and processes. Are you Nordstrom or Walmart?
- Hire in the right order -- don't put the cart before the horse.
LAS VEGAS — If you’re going to build a team, noted Caryn Yates at Century One’s One21 Conference, you don’t want to throw it together haphazardly.
“There are strategies to becoming successful, and we want to know them,” she said.
The strategies presented are based on Dirk Zeller’s book The Champion Real Estate Team.
The first question
“The first question to ask yourself before you consider starting a team is: Why?”
“Everyone else is doing it” isn’t a good reason to form a team; neither is “I don’t really enjoy prospecting,” said Yates.
However, if the answer is “I am a really good agent and I think I can help other agents be as good as I am,” then you might be a team leader in the making, she said.
The 4 core success plans
Whatever success you’ve found in your business so far, Yates said, can be attributed to these plans.
“The reasons agents join teams is because they lack the ability to construct and implement these plans themselves. That’s why they’re coming to you.”
Yates asked attendees to rate themselves on these four plans from one to five; “anything less than a four needs work,” she said.
“The ability to be introspective and look at your strengths and weaknesses is what helps us start down that path toward higher success,” she added.
What are the core plans?
1. Time management
“Everybody’s told you ‘time is your most precious commodity,'” Yates noted. “But the implementation of a good time management plan for many of you in this room would make a 30 percent difference in your income.”
2. Business management
“A lot of teams and agents run marginal businesses,” she said, but they’re so focused on the tax write-offs that they don’t pay attention to the nuts and bolts.
3. Personal management success plan
How well do you control your emotions? Do you treat staff well and keep your cool when things go awry? “Are you able to keep your emotions in balance and are you proud of the way you do business?” asked Yates.
4. Activity management success plan
This is a fancy way of saying “you should work on activities that will support your goals.”
“There’s a pretty systematic way to success,” noted Yates. “You should know how many contacts to a listing presentation, how many listing presentations to a listing, and how many listings actually sell.
“You should also know on the buyer side, how many contacts do I need to get to a buyer consultation, and of those consultations, how many of those buyers are loyal to me? And how many get to close?”
Once you’ve finished rating yourself, Yates recommends that you work on the planning areas where you rate yourself a “4” or lower.
And the idea isn’t to gather points — it’s to analyze and criticize yourself so that you can improve and nail down your processes for your future team’s sake.
Yates also suggested that attendees rate their work habits and disciplines on a scale between 1 and 10 using the following criteria: knowledge, skill, attitude and activity (consistency). Where could you stand to improve?
- Time efficiency
- Qualifying sellers
- Qualifying buyers
- Lead follow-up
- Listing presentation
- Showing property
- Handling objections
- Closing the client
- Administrative work
- Identifying proactive lead generation sources
- Working sources/finding leads
- Contacting leads/identifying prospects
- Qualifying prospects
- Avoiding and eliminating unqualified prospects
- Making service presentations
- Closing/asking for commitments
- Overcoming objections/getting commitments
- Providing client services
- Assuring/confirming client satisfaction
- Building referral network
- Working referral network
6 key rules for business
To run a small business effectively, team leaders need to operate like, well, CEOs — building and managing their business-within-a-business.
And to do that, Yates said, agents need to understand the six key rules for running a small business.
1. Face reality as it is, not as it used to be or as you wish it to be.
Yates offered a series of sub-rules for real estate agents:
- Today is the only reality you have — yesterday and tomorrow won’t keep your business afloat.
- Too often you don’t look your financial reality in the face — that’s the adjusted gross income line on your tax return.
- What’s the reality of the numbers in your business?
There are very specific numbers that Yates suggested real estate agents nail down before starting a team:
Hourly rate: This is the amount of money you generate every hour that you are in business.
- Average No. of hours worked per day X days you work per week = hours worked per week
- Hours worked per week X weeks worked per year = hours worked per year
- Gross salary / hours worked per year = hourly income rate
(Need to increase your hourly rate? Yates said these activities will help: prospecting, lead follow-up, listing presentations and buyer consultations.)
Average commission check size: How much money do you make in your average commission check?
- Gross commission income / No. of units sold each year = average commission check
Average sales price: How much do the properties cost that you are selling?
- Gross sales volume / No. of units closed = average sales price
Average commission rate: You might think you charge everybody consistently — and you might be surprised when you dig in.
- Average commission check / average sales price = average commission rate
Cost per transaction: How much money do you spend to close a transaction?
- Total marketing expenses / No. of closed units = marketing cost per transaction
Time invested per transaction: Could you be more efficient regarding the amount of time you spend on each transaction? This will give you a dollar amount of your time spent on each listing.
- Time invested to buyers + time invested to sellers X hourly rate = time invested per transaction
2. Be candid with everyone. Be willing to tell that seller that he is overpricing his home, or the buyer that she’s being unrealistic in her expectations.
3. Don’t manage; lead.
4. Change before you have to. Being reactive is rarely as lucrative in business (and in life) as being proactive.
5. If you don’t have a competitive advantage, don’t compete. This competitive advantage could be small, Yates noted — but it needs to exist if you plan to leverage it.
6. Control your own destiny or someone else will.
Not everybody can (or should) be a team leader, Yates said. She suggested that attendees conduct a self-assessment to ascertain whether they can lead.
A good team leader’s strengths might include drive or motivation, the ability to communicate well and an attitude that’s unafraid of hard work or failure.
However, the weaknesses are just as important. Are you sloppy with your finances? Do you make promises you don’t intend to keep? Be brutal; this is important!
Other questions besides strengths and weaknesses to ask:
- What new behaviors do I need to embrace to achieve a higher level of success?
- What are the key abilities I need to possess to unlock my true potential?
- Why am I not taking the action I need to take right now?
- What’s one thing if you mastered it right now, would make the biggest difference in your life?
“A great team leader removes that limiting step,” said Yates.
Imagining the team
OK — you’re confident that you’ve got what it takes, both in terms of personality and process, to build an agent team.
You need to build your team vision and understand what your team will provide to the marketplace, in terms of approach and purpose, that sets it apart.
Some questions to ask to help you build your team vision:
- How much do you want to sell in units or sales volume as a team? And individually?
- What does your business look like in five years?
- How long do you plan on being a real estate agent? “You probably don’t want to spend a lot of time and energy and investing in the learning curve that occurs if you’re only going to be in the business for five more years,” noted Yates.
- Do you have other business interests, either now or in the future? Teams can be all-consuming.
- Where do you see your income coming from in the next 10 years? Do you want to keep earning sales commission or transition to a broker-owner?
- What’s the size of your marketplace? “Will my market support the goals that I want to create?”
- Are you really a good teacher, manager, coach? (This is really important!)
“Successful companies know they have to have a vision. Sometimes knowing who you are as a team is more important than knowing where you are going,” said Yates — which is why she added that mission statements are not something that you “have to have.”
Core values, though, are a different story, she said.
“Your core values are really your guiding light and your guiding principles in your business. They won’t change, or shouldn’t. They endure over time,” she noted.
Your business vision will dictate your staff, systems and clients. “Do you want to deliver a Nordstrom or a Walmart experience?” asked Yates. Depending on the answer, you’ll craft your team accordingly.
Stages of hiring
If your plan is to hire another agent first thing — you might want to rethink that plan, said Yates. “Your first two hires should be administrative,” she noted.
Consider the personality types that will be the “best” at each job, too. Personality assessments can help here — and keep you from investing money in the wrong candidates, said Yates.
She outlined eight stages of organizational growth. You by yourself as a single agent are the first stage.
The second step is to hire an assistant. “His purpose is going to be to remove as much of the production-supporting activities from your plate as possible. Your job is not to micromanage them; it is to spend more time on lead generation, lead follow-up and qualified appointments,” said Yates.
The third step is to alleviate some of the burden on your assistant by hiring a listing coordinator and a closing coordinator. (We’re still not hiring any agents!)
The fourth step is when you get your first agent team member — a buyer’s agent (who, according to Yates, should be closing at least 20 deals a year in order to keep the team afloat) to generate more business for your assistant and coordinators.
Step five? You will need multiple buyer’s agents and a field coordinator, who manages incoming leads for your buyer’s agents.
In step six, you will hire a lead manager, and in step seven, a head buyer’s agent.
The last step involves you and all of the above, plus a CEO to help you hold everything together. (Do not go from step one to step eight, cautions Yates.)
And don’t put the cart before the horse and start hiring buyer’s agents immediately, she added — buyers tend to be loyal toward their agent, and if you don’t have an administrative assistant who can help you manage everything, you’ll onboard buyer’s agents only to lose them (and their clients) later on.
“The most meaningful area of success to me is the growth of relationships in your life,” said Yates.
“One advantage to being a team leader is the advantage to accomplish, in less time, much more than you could have on your own,” she said. And a good team leader will use that time wisely.
“It doesn’t take any particular skill to work a lot of hours, earn a big income and blow up your family while you do it,” noted Yates.
Editor’s note: This story has been updated.