- Be deliberate about each step of the team formation process, create profitable systems and hire members dedicated to delivering stellar customer experience.
What does it take to build a successful real estate team? According to Travis Robertson at Inman Connect, you must be clear on your “big why” and have strong systems, effective lead generation and recruiting strategies, and an understanding of how to structure and compensate your team.
Travis Robertson’s learning lab did a deep dive into what it takes to launch and maintain a successful real estate team. Here is an overview of what he covered.
Begin with ‘why’
Robertson believes that successful teams begin with having a purpose bigger than yourself.
For example, making other people’s lives better, providing your children with an education or creating a legacy. The strength of “your why” will determine your outcome.
5 signs that you need to start a team
According to Robertson, the five signs that you need to start a team are:
- Your client service is suffering, or you’re answering emails every night after 11 p.m.
- Your income has plateaued. Income growth follows personal growth so constantly upgrading your skills and knowledge is vital.
- You are turning away business.
- Your family doesn’t recognize you. You’re available 24-7 for your clients but not for your family. Even when you are home, you take calls during dinner and frequently miss important family events.
- You need time off, but the word “vacation” sounds like a fantasy.
When not to start a team
If you are not a rainmaker or if your business is based on referrals (rather than consistent lead generation), Robertson says, you should not start a team.
Structuring your team
The data on starting a team is clear — your first hire should be an assistant. A major mistake that many team leaders make is hiring a buyer’s agent first instead of an assistant.
If you hire a buyer’s agent without the necessary support staff, you will be adding to the chaos rather than reducing it.
The profile you’re looking for is someone who scores at the 70th percentile or higher on the “S” (steadiness, reliability factor) and the “C” (compliance, attention to detail) factors. Ideally, you would like to hire someone with a strong “I” factor (strong people skills) as well.
Your first administrative hire should have the skill set to help you to organize and document your systems. This is one step alone often results in a doubling or even tripling the number of deals you can do.
To keep costs down, you may want to begin by hiring a virtual assistant. These individuals have their own equipment, they are trained, and you only pay them for the work you have them do.
Examples of the type of work they do include managing your marketing and social media, scheduling appointments, tracking bookkeeping, putting together digital listing and buyer packages, etc.
Prioritizing your hires
Robertson suggests that you use the following guidelines to prioritize your hires:
Hire from the bottom up
This means hiring out the least dollar productive work such as filling brochure boxes, dropping off keys or even doing personal errands so that you have more time for higher dollar productive activities and for your personal life as well.
For example, if you’re a great at generating listings but lousy with paperwork, hand off transaction management to an assistant or transaction coordinator as soon as possible.
Hire out your biggest energy drains
This can include waiting to let an inspector or an appraiser in at a property, putting together marketing pieces or setting up showings.
The most deadly arrangement — a partnership with non-related team members
The California Association of Realtors’ Women’s Initiative research showed that brokerages formed with family members were quite stable, but those formed with unrelated individuals often were a formula for betrayal, embezzlement and breakups.
“Partnerships are the only ship that won’t sail. A 50-50 partnership is absolutely the worst model — it has all the disadvantages of being in a marriage without being married.
“If you are thinking about forming a partnership, write the divorce papers before you start the team including how you will split everything (your team members, your assistants, listings, closings, etc.) This also means addressing what happens if someone is sick, dies or has a major illness.
“Furthermore, someone must have 51 percent voting rights. Make this person the CEO. If you’re not willing to give your partner the CEO position and 51 percent control, don’t enter the partnership.
“On the other hand, family partnerships (spouse, parent-child) work as do purchase transitions where another agent is buying into the business over time.
“In terms of family partnerships … it’s important that the parents realize they are not the future of the team. When the parent is unwilling to relinquish control, the son or daughter on the team usually strikes out on their own.”
Keep your compensation plans simple. Everyone should be on the same commission schedule.
Instead, incentivize your team with additional compensation for performance, which can be through bonuses, profit share or revenue share.
Avoid this compensation trap
A widespread compensation error is giving team members their split prior to deducting expenses.
Taking expenses off the top (usually about 15 percent) means you each net 42.5 percent rather than you netting 35 percent to the buyer’s agent’s 50 percent.
Handling the ‘split objection’
Keep in mind that the no. 1 reason agents join teams is that they are unable to generate enough leads for their business.
Consequently, if someone objects to your split, Robertson recommends asking one of the two following questions:
- “Would you rather have 100 percent of five deals or 42.5 percent of 30-40 deals?”
- “Are you more concerned with your split or how much you net at the end of the year?”
The value you are offering is the opportunity for your team members to make more money with your team than they would on their own.
Best team practices
Robertson recommends the following best practices:
- Hire slowly, fire quickly.
- Because anyone can bring his or her A-game once, conduct multiple rounds of interviews. If possible, use multiple interviewers.
- Leverage the 15-minute initial interview by phone. Avoid building rapport on the first call, and stick to asking questions. When you ask a question, shut up, and listen to the answer. A great first question is, “What was it about the ad (or this position) that made you want to apply for this job?” Another one is “What is your big ‘why?’ (your most important reason) for wanting to be on a real estate team?”
- Whenever possible, meet their significant other or spouse. Make sure he or she is on board with the agent joining your team; if not, don’t hire the agent. Furthermore, no matter how great the agent is, if their significant other isn’t, the agent will bring that bad mojo to the office.
- Fire quickly.
Robertson says never hire any candidate that replies with any of the following:
- How many leads will I get? (It’s about them rather than being on the team.)
- What is the split?
- How much money can I make?
- I can’t work nights/weekends.
- I don’t have any questions.
If you are deliberate about each step in the team formation process, create profitable systems and hire team members dedicated to delivering stellar customer experience, your team will be a boon to your business.
If not, your team could morph into the dragon that eats your business alive.
Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles and two best-selling real estate books. Learn about her training programs at www.RealEstateCoach.com/