Aaron West, a top agent in Modesto, California, and founder of The West Experience Real Estate Group, says the decision to start a real estate team came down to one question.
“Am I going to continue to kill myself or am I going to branch out and maybe form a team?”
West brought on his first team member 12 years ago — a transaction coordinator — and learned that they could close about 85 sides per year together. But like many successful solo agents, West reached the limit of what one agent could do alone.
He added a buyer’s agent five years ago, and slowly expanded to what’s now a team of eight: himself, three buyers’ agents, two full-time admins, a part-time transaction coordinator, and a full-time virtual assistant. In 2019, the team closed 163 transactions.
If West’s death-by-real-estate scenario touches a nerve, you’re probably thinking that 2020 is the year to start your own real estate team. Before you do, ask yourself these eight questions to go deeper and decide if starting a team is the right thing to do.
1. Am I starting a team for the right reason?
West says there’s only one reason an agent should even think about forming a team: you have more leads than you can handle alone.
You might know of agents who did it for emotional reasons — they think it’ll be fun to work together with good friends in the office. They think it’s the thing to do.
Others might start a team out of a sense of pride, as in Look at me, I have my own team now — I’m important! But that’s a recipe for failure. “Ego is one of the reasons that a lot of people form a team,” West says, “Because they just want to be able to say they’re the team leader.”
If you’re thinking about starting a real estate team, make sure it’s the right business decision.
2. Am I ready to be a leader?
Robert Greenblatt, a top agent in Cherry Hill, New Jersey, who formed his team way back in 2000, says he’s seen agents wrongly assume they should start a team because they sell a lot of homes.
But even the most successful solo agent may not have the right skills; starting a team demands leadership, not sales skills.
“Just because you’re a really good real estate agent, it doesn’t mean you’re going to be a really good manager or leader,” Greenblatt says. “It’s like the really good school teacher isn’t necessarily going to make a great principal of the school, but oftentimes they get promoted to principal.”
3. Do I have the right systems and processes in place to run a team?
Your team’s success will depend as much as anything on the systems and processes you put in place — marketing systems, lead generation systems, systems for tracking progress and measuring success, processes for following up with leads, processes for launching new listings, and on, and on, and on. Team success depends on consistent behaviors and actions; systems and processes create that consistency.
“When you grow a team, it’s all about systems. The whole basis and success of your team is the systems that you have in place,” West says.
It’s more than what CRM (customer relationship management software) you use or what commission split you establish for your agents. Something as simple as not having a system in place for how you’ll distribute new leads can sink a team from the start. (Greenblatt says he often hears agents on other teams complain that their team leader “keeps all the good leads for himself.” Yikes.)
Systems are so important to your team’s success that, as you read through the rest of this article, most of the questions you’ll be asking yourself are about the systems you’ll need to get right. That starts with…
4. Do I have a plan for hiring and team expansion?
Both Greenblatt and West went through a number of team members in the early days because they didn’t have a plan, a system in place, that defined what roles they needed to fill and what kind of person would best fit those roles.
“I brought in the wrong person or I wasn’t clear in the early days of what the role was. And it’s painful,” Greenblatt recalls.
West says his earliest hiring lesson happened because he rushed to plug a hole, when he should’ve taken time to fill a position. “Give hiring the honor and the time that it deserves. Once I started doing that, the business really took off.”
Both agree that your team’s hiring plan must begin with a fantastic administrative assistant — someone who’s organized and detail-oriented — not another agent. It sounds counterintuitive, because we’ve already established that having too many leads is the only reason to start a team. And when you have too many leads, you think, I need another agent! Nope. You need an assistant.
“If you’re truly a really good real estate agent,” Greenblatt says, “You’re probably not really good at the paperwork and administrative tasks. If you hire a buyer’s agent, then you’re going to be working for them, trying to make sure that their transactions are moving forward.”
By hiring a great admin to handle all the paperwork and transaction management tasks, you free yourself up to service the leads that you couldn’t before.
Your hiring plan needs to address adding agent(s), too. How and when will you expand? And who — i.e., what kind of people and what kind of agents — will you add? All-star agents may not be great team players. Your closest friends might be good agents, but might not be a good fit for your team culture (more on culture below).
5. How will I train and onboard new staff and agents?
Even if you add experienced admins and agents, you can’t put them to work without training. If you do, it won’t be long before they’re unhappy with you, you’re unhappy with them, or both! The result? A lot of turnover. A good onboarding system is your job as team leader, and a big part of the value you offer the team.
West’s onboarding system requires new buyer’s agents to work with an experienced team member during their first four months on the team. Every client meeting, every offer they write — it’s all done in tandem with another agent so that the new agent can learn the ropes.
Greenblatt’s onboarding system combines three training areas: cultural, technical, and systems.
“When we bring in an agent, they spend some time with me early on going over mindset and servicing clients.” That’s the cultural element. Then it’s on to the systems and technical aspects. “They spend time with one of my senior team members going through the nuts and bolts of our CRM, [learning] what our expectations are as far as managing our clients to our CRM so we can keep accountability in place. They’ll also spend some time with our transaction manager understanding the [details] of a transaction and what happens once we go under contract.”
For both Greenblatt and West, the training process continues with regular meetings that both new and veteran team members have to attend. West and his team have two meetings each week, including a training meeting on Thursdays. Greenblatt’s team has one group meeting per week, and he also does one-on-one meetings with each team member. “We review the nuts and bolts of some clients,” Greenblatt says about the individual meetings. “But then it usually segues into a teaching point or a mindset exercise.”
6. Am I ready and able to delegate?
Greenblatt admits that he wrestled big time with this when his team was new — it was hard to let go and trust others to get the work done.
“It was part of a learning curve in trying to develop a team,” he says. “You just can’t do everything yourself. You have to leverage.”
West’s solution to the delegation question was to figure out what he was earning per hour — and what he wanted to be earning per hour — and delegate everything that paid less.
His system goes like this: An agent who nets $200,000 in earnings (gross commission minus expenses) and works 2000 hours per year (40 hours per week x 50 weeks per year), has a $100 hourly wage. If that’s what you want to earn, all tasks that are worth less get delegated to the team.
A system like this “allows you to focus on more things that are within your hourly wage,” West says. By attaching a dollar figure to all the work involved in running a team, it’s easier for a team leader to delegate work to the right people.
Bonus: It also helps you understand when it’s time to expand (question No. 3 above). “As your business grows and your hourly wage increases, bringing on a buyer’s agent makes sense because you want an agent to represent all of the buyers that are under your hourly wage,” West says. “My business is now to the point where I no longer help buyers at all. My hourly wage is such that it only makes sense for me to do listings.”
7. What level of production and accountability will I expect from my team agents?
Agents need to know your expectations for how productive they are, and how accountable they are to their work, each other, and you.
Some teams, like West’s, have a systemized approach to setting goals and expectations, and discipline when agents don’t perform to those expectations. His agents have a minimum number of contacts that they need to make each week. If they don’t hit that goal, they don’t get new leads the following week until they’re caught up.
“Every week at the team meeting, everybody goes over their numbers of how many people they are working with, how many contacts they made, how many attempts that they made, if they did open houses, all the feedback, all that kind of stuff so that I know what’s going on,” West says. The team’s operations manager meets with each agent daily to review numbers and help the agents stay accountable to these goals.
Rather than spelling out specific goals and expectations in the team contract, Greenblatt takes a looser approach. “I want my team members to take this to whatever level works for them in their lives,” he says.
Greenblatt has one agent on the team who sets ambitious goals and recently grew her business from 30 deals one year to 50 the next. But there’s another agent on the team who has a young family at home, helps with some admin work at the office, and does 20-25 deals per year.
“She can’t do more than that,” he says. “Even with our infrastructure, there’s just not enough hours in her day to do more. But she’s happy with that. So if she’s happy with that, I’m happy with it.”
There’s no right or wrong approach to production and accountability, but you do need a system in place for this. West and Greenblatt have very different approaches, but each system works for their team. And each system is also part of their team’s culture, which is the perfect segue into the last — and possibly most important — question you need to ask before starting a real estate team.
8. What team culture do I want to create?
The left-brained among you might be tempted to roll your eyes about the idea of creating a team culture, but please don’t. If you’re thinking about starting a team, the culture you create will determine your success as much as anything in this article. Get it right and you’ll be able to attract agents that become happy and productive team members; get it wrong and team members will be miserable, you’ll struggle to attract and keep agents, and productivity will suffer.
“A team should be a group of people in flow and everybody’s going in the same direction,” West says.
The first time we mentioned culture in this article was above in the hiring section, and for good reason. West says culture should be the guide as your team grows. “As a team leader, one of your goals when you start a team is bringing people on that have the same values that you do.”
Greenblatt describes his team culture as one of problem-solving, not finger-pointing, and says it defines how they treat each other. “There is no room on this team for an attitude or snippiness or impatience with each other,” he says, “because the business lends itself to tremendous stresses. There’s no reason why we should add to that stress amongst each other.”
Culture also defines how the team treats buyers and sellers. “Every single lead is super important, and regardless of price point, everybody gets service to that same level,” Greenblatt says. “I don’t care if it’s a $50,000 condo or an $850,000 house, they all need to feel special and they all need to be followed up with the same way and with the same intensity.”
Think of it this way: the systems you have in place will help the team do what it needs to do — connect with new leads, follow-up after an open house, etc. But the culture you instill will determine how those things get done. It may sound vague or nebulous to some, but you can’t underestimate the importance of culture when forming a real estate team and nurturing its success.
“If you build a team around a culture and people who are all going in the same direction,” West says, “then you’re able to build something sustainable that lasts and that people want to be a part of.”
Source: (CoWomen / Unsplash)