Building a Team: The Next Logical Step in Growing My Business

If you spend much time discussing real estate with anyone who's been in the business for more than a couple of months, all of those statements and questions about real estate teams will surface. These days, it seems like everyone is jumping on the team bandwagon.

Don’t believe that? Try Googling the phrase “starting a real estate team,” and you'll see over 85 million search results with articles, videos, tutorials and observations from Inman News, trade associations, major franchises and even mainstream media outlets like Forbes and Time. Peruse Amazon and you’ll see that volumes have been written on starting, growing and developing a real estate team.

If everyone is talking about it, there must be something to it, right? What are some of the advantages and disadvantages of belonging to a real estate team as opposed to going it alone? Should you start or join a real estate team?

I recently had a couple of long conversations with Jack Holter, the Director of Business Development for Jackson Realty in the San Francisco Bay area. Jackson is a small “boutique agency” with 24 agents where, six months ago, two agents set up a team. Jack described their process of forming a real estate team and shared their plans for the future.

Why create a real estate team?

“Why did your agents decide to form a team?” was the first question I asked Jack. “Did they do it because it was 'trendy and hip' or because they felt it would improve their business?”

“To be honest, and I know some won’t believe this, the primary driver for these agents to look at a team structure was the amount of business they were leaving on the table. Both are long-time Zillow Premier Agents® who advertise in multiple ZIP codes in the area. They found that they didn’t have the bandwidth to properly respond to all the leads that were coming in to them. Both had good systems in place to respond to contacts; they simply didn’t have the time to properly follow up with them,” said Jack.

“Initially, both agents started referring out some of their Zillow leads. While this did allow more contacts to be reached, we quickly realized that there wasn’t a lot of accountability. When an agent sends out a referral for a personal contact, the agent getting the referral feels an obligation to help the other agent. That desire is tempered a bit when an Internet lead is forwarded. The lack of a personal connection and basic human nature can result in 'non-personal' Internet-type leads getting less attention than a personal referral — and that attention is usually necessary to convert that contact into a client,” Jack told me.

“Our agents realized that setting up a team could maximize accountability for ALL leads the team generated.”

Defining the team structure

“Building a real estate team takes a lot of upfront work,” Jack told me. “There is probably an infinite number of ways a real estate team can be structured, and there really isn’t a right or wrong way to do it. That freedom and flexibility can be both a blessing and a curse.”

Take the time to think through how you want your team to look and how responsibilities can be divided to get the most out of each team member’s particular strengths and weaknesses. Will you have dedicated buyer and seller agents? Will the team have its own administrative support, or will support be shared with the brokerage and/or other teams? Is everyone on the team responsible for marketing and promoting the team, or will there be a designated marketing rep who produces all of the team's marketing collateral?

After much discussion and research, the agents decided that they wanted the following types of people on their team:

Administrative assistant. The administrative assistant would be the go-to person for managing inter-team communications, filing paperwork and ensuring compliance with local and state rules and regulations with regard to record retention. They would also work closely with the marketing director, help maintain the team's social media presence and perform other administrative tasks. The administrative assistant was the team's first hire and is a salaried position.

Dedicated buyer's agents. 90 percent of Jackson Realty’s business is on the buy side. As such, most of the leads they receive are buyer leads — and some of them were getting lost in the shuffle. The team felt that reaching and converting buyer leads was the area most ripe for improvement and business growth.

The team leaders tapped what they felt was the best source for buyer agents: agents they had worked with on previous transactions. Rather than reach out to agents in seemingly random fashion via email blasts or paid advertising, Jackson's agents went back through past transactions looking for agents they worked with who they felt would be a good fit for the team.

“We could have randomly recruited and hoped we got lucky,” Jack told me. “But it made more sense to go with agents that we had some experience and exposure with. Looking at agents on successful cross-deals just made sense to us. We weren’t looking to hire hundreds of agents; we just needed five really solid ones. We found plenty to consider (and a few that could be eliminated) based on the interactions we’d already had with them on a past transaction.'

Transaction coordinator (TC). At first, the team leaders felt the administrative assistant could also handle the duties of a transaction coordinator: setting up appointments for inspections, coordinating appraisals with lenders, tracking and filing transaction paperwork, etc. As the team's business increased, however, they reached a point where they needed both an admin and a transaction coordinator. They hired a licensed TC shortly after bringing on their third buyer's agent. The TC is paid a salary and a flat fee for each file handled.

The next hire. Marketing is currently handled by one of the team leaders, but given the growth of their business, they would like to bring on an experienced marketing and social media manager. “We want to take our marketing to the next level. As such, we feel we need a dedicated marketing professional to help us. This will likely be a licensed agent, one who understands both traditional and social media marketing. Our initial plan is for this person to be salaried with a transaction-based bonus.”

Hiring team members

I queried Jack pretty extensively on how they selected and hired team members, and Jack had some sage words of advice: “Most agents have little experience with hiring people. While virtually every real estate agent had a career prior to real estate sales, not many were in a position where they actively hired people. Hiring is part science, part psychology and part art.”

Jack told me they were fortunate in that one of the brokerage's founders had a background in human resources and had done extensive hiring in both the tech and hospitality industries. That hiring experience was invaluable and, he feels, saved the team a lot of pain from hiring the wrong type of people.

But what if you don’t have that kind of hiring experience?

“We also stole a page from the Keller-Williams book of hiring,” Jack told me. “We have every potential hire complete a DISC assessment.” DISC is a behavior assessment tool based on psychologist William Moulton Marston's DISC theory, and centers on four different behavioral traits: dominance, influence, steadiness and compliance.

Jack noted, “DISC is a great tool for helping to understand people and make hiring decisions. You should NOT just follow it blindly, though. Don’t hire a 'High D' for a buyer agent role just because High D’s make great salespeople.' Rather, use the DISC assessment to drill deeper during your interview to help decide if someone is a good fit.

Inter-team communication and systems

“Whenever you get two or more people working together — like you have on a real estate team — you are going to need a way for them to communicate and share,” Jack explained. “You can’t have people working in a vacuum and just assume that good communication and follow-up will happen.”

Fortunately, there are a lot of tools available to help facilitate inter-team communications. Jackson uses Yammer extensively, and are beginning to evaluate Slack as well. Both of these are real-time messaging and file sharing services. In addition to these, Jackson also uses “cloud-based storage” systems like Dropbox to facilitate file sharing. “It’s important for each team member to be able to communicate with each other, and to have access to the same files as well as strict revision control,” Jack reminded me.

“Tools like Yammer and DropBox allow us to collaborate in real time and have documents at the fingertips of all team members. In addition, Zillow provides free contact forwarding, which allows our Zillow contacts to be immediately distributed to team members based on a variety of criteria. Zillow’s Tech Connect program also lets our agents use the CRM that THEY choose and prefer as opposed to forcing each agent to use a particular CRM. This allows the agents a lot of flexibility while still maximizing the team's lead conversion.”

Was starting a team the right move?

“I don’t believe there is a single solution that fits every agent out there,” Jack said. “But for us, there is no question that going from an individual contributor type model to a team model was effective. Our conversion rate has increased from around 2 percent to almost 6 percent, our agents' GCI (Gross Commission Income) has increased, and we are able to serve many more clients and close more transactions because of our team structure.”