In recent years, the undeniable buzz around teams has intensified. For agents, starting a team represents an opportunity to work with and mentor others, to be more efficient, to scale up your business (and potentially make it saleable) and to make more money.
For brokers, however, that buzz seems more like a buzzkill — teams eat away at their already-thin margins; they are a liability; they steal away people who, as independent agents, could be solid fee-paying revenue generators; and in the end, they will be the death of the traditional broker. At least that’s what conventional wisdom has lead everyone to believe.
Conventional wisdom has brokers and agents functioning in tension with one another. Of course, that conventional wisdom is often a mediocrity trap. We should instead observe the simple rule that says if something is good for the agents, it had better be good for the broker. We need to function not in tension, but in harmony.
If the conventional wisdom for brokers says that teams are a nuisance at best and a nightmare at worst, and if at the same time agents are profiting and prospering by having teams, we urge you to consider a course correction.
The benefit of teams
Real estate teams were an organic development, driven from the bottom up by agents, not from the top down by brokers. As a result, few agent teams find value in the brokerage, and most brokers mistakenly remain locked into thinking of teams as the enemy.
But it’s time for brokers to change this mindset. Teams offer a bright, profitable future for the traditional brokerage — and properly managing teams actually limits liability.
We found that teams add value to our brokerage in the following ways:
- Professionalism and agent development: As team leaders, agents take their business more seriously, experience personal growth through teaching others and generally function at a higher level. And team members, with training and support from both their broker and their team leader, become exponentially more productive
- Liability: Well-managed teams actually limit your liability as a broker. There are multiple levels of oversight with both the broker and team leader monitoring team members. Newer team members have higher levels of support when both the broker and the team leader are available for questions and counsel, so they are much less likely to make costly mistakes.
- Recruitment: When done properly, embracing teams creates an unstoppable recruitment engine for your brokerage. Your agents will be bringing productive people into your office whom you never would have met. If handled with total transparency and mutual understanding, your team leaders will see that many of their team members — especially the most productive ones — will eventually want to spin off on their own as independent agents, and when they do, it’ll benefit everyone if they stay in your brokerage. (All the more so if your company has some form of profit share for recruits referred in by your agents.)
Adding value as a broker
Those who figure out how to better support teams will gain a tremendous competitive advantage. Here are the most important things we are doing to enhance our teams’ success and thus add value as a broker:
- Creating respect, connections and balance: The best way to earn your agents’ respect is to embrace their team dynamic. This will also encourage a deeper connection between them and you, their leader. We think of it as a great service opportunity — we have delivered value by helping agents create a well-run team that adds to the productivity and balance of their business.
- Recruitment and training: Most agents’ skill sets don’t necessarily include recruiting and helming a team, but those are precisely the skills we exercise every day as leaders. We have delivered value by partnering with our team leaders in recruiting, training and coaching their team members.
- Being a guide: The industry has, for the most part, passively watched individual agents develop teams. Brokers didn’t provide guidebooks, lessons, coaching or best practices. We have delivered value by providing all of those things to our team leaders.
- Equality: Team members have all too often been treated as second-class citizens by their brokers. We have delivered value by erasing all distinctions between independent agents and team members. We provide the same coaching, training and support to both.
We concluded that the best way for us to learn how to deliver the highest possible value to agents starting teams was to turn to the best teachers available: the team leaders in our brokerage, who after all were the ones who wrote the book, who learned all the hard lessons and gathered all the valuable experience.
We have delivered value by putting together a Team Council (that includes all our team leaders) and helping them share ideas and best practices with one another.
Value equals results
By resetting our perspective on teams, we were able to significantly increase our brokerage’s value proposition for agents — and we have seen significant results in return.
In an office with 105 agents, 27 of them now have teams, and that number is growing every day. We expect 40 percent of our agents to be running teams within the next two years.
These numbers bode very well for our agents, who are prospering tremendously from their teams’ development.
The difference now is how we as a broker are also prospering greatly from having embraced teams.
Those 27 team leaders have recruited 65 talented and productive team members to our office, so we now number 170 agents (not 105).
What’s more, 18 of our 105 agents were originally team members. And those 18, now as independent agents, will produce over $120 million in sales this year, at an average of $6.7 million apiece. In fact, all of our highest-producing new agents came from teams, where they had already gotten their business off the ground and become effective and productive. And most of them are starting teams of their own.
This is extraordinarily fertile ground. And it represents the future.
Bear in mind, our company charges nothing for team members. They are absolutely free. So the agents are enjoying the most team-friendly arrangement in our market, by a wide margin.
Even so, we have found ways to make teams exceptionally profitable for us as the broker too, which benefits everyone — broker, agent and team member.
Now is the time for brokerages to review their approach and policies regarding teams. Your agents are going to have teams. Will you fight the tide, or will you let them take you to greater growth and prosperity? Decide now how your future will look.
Lynn Wheeler serves as 2nd Vice President and Branch Manager for The F.C. Tucker Company Keystone office.
Brian Walker manages a top producing Indianapolis branch office for Indiana’s largest independent real estate firm, the F. C. Tucker Company. He’s been in the business since 1995, and resides with his wife and daughter in Carmel, Indiana.