5 Real Estate Team Models: Start A Real Estate Team Vs Solo Real Estate Agent
You’ve been an experienced real estate agent for a few years now, and you’re starting to think that it might be time to form your own real estate team. You’re tired of the constant hustle and bustle of working solo all the time: you can only do so much on your own!
Sure, you make enough money, but there are still times when you know you're capable of more. Plus, having a team could give you access to more resources and contacts that would help accelerate and stabilize your success.
I've helped agents in every different real estate model. At the time I didn't know that we were doing different models, we were just building off what was already there. But after coaching hundreds of agents and observing best practices I've identified these different real estate models.
There are 5 different models you could use to structure your real estate team. Your goals and your skillsets will determine the model, size, number of agents, and success of your real estate team. The five real estate team models that have proven successful in today's market are RETOO Agent Model, The Model Model, Partnership Model, Team Lead Model, and Leads Team Model.
In this article you'll get three things:
1. Introduction to Real Estate Teams and Different Model Options
2. Advantages of Each Real Estate Team Model
3. Tips on Choosing the Best Structure for Your Success
But first, what we won't cover:
Being a solo real estate agent
Joining a team
Expansion real estate teams
Here's why...
Being a solo real estate agent vs a team
Being a solo real estate agent vs being a real estate team leader is a comparison that many agents grapple with when considering their next step in the industry. While both have unique benefits and drawbacks, it’s important to understand the differences and make an informed choice about what path is best for you.
As a solo agent, you’re likely to have more control over your own schedule, as well as a greater sense of independence. On the other hand, being a real estate team leader can offer significant advantages and opportunities for growth, including the ability to delegate tasks and build out your business. It may require more start-up capital and organization skills than operating solo but can also be extremely rewarding if done correctly.
When deciding which option is best for you, it’s important to assess your strengths and weaknesses. Consider things such as your time management ability, communication style, budgeting acumen, and leadership skills. If you don’t think that leading a team is right for you now or ever in the future then being a solo agent may be the better option for continuing your success in real estate.
Joining a team vs being a real estate team leader
Typically the decision of joining a real estate team versus being a team leader isn't a question most agents have. In their head, it's already one or the other.
When joining a team, you will usually be acting as an individual agent without major responsibilities or decision-making power. You also get access to resources that may not be available on your own such as multiple listing services, marketing materials, and administrative support. The downside is that you will have to split your commissions with other agents on the team which can significantly reduce your income potential. Additionally, you won't have direct input into the strategic direction of the team.
If you have no desire for creating a mission, vision, developing a strategy and setting objectives for yourself, let alone others, but you like the idea of support and community, being on a team could be for you. There’s no reason why you need to work alone in this industry.
Expansion real estate teams
Expansion real estate teams, also known as hub-spoke models, involve a centralized team leader or “hub” with a group of individual agents or “spokes” all working together. This model provides the team leader with a powerful platform to share resources, such as marketing materials and administrative support, across their team members.
The downside is that many expansion teams require significant resources and infrastructure investments upfront to get started. Having multiple people responsible for different tasks in the same organization can also create potential conflicts in terms of communication and decision-making.
When starting an expansion real estate team, it is important to consider factors such as goal setting, budgeting, recruiting strategies and communication systems. Team leaders need to ensure that each member has clear objectives as well as access to necessary resources for success. In addition, having a streamlined system for organizational structure and communication can help develop an effective workflow between all members of the team.
Five Real Estate Team Models For Today’s Market
There are many different models for creating a real estate team, such as the solo practitioner and multi-agent model. Each has its advantages and knowing which one will work best for you can be tricky. To help make this decision easier, we're going to look at five real estate team models that have proven successful in today’s market.
I’ll discuss the positives of each one, provide tips on how to choose the right structure for your success, and explore what it takes to create a winning real estate team.
Partnership Model
A partnership real estate team model involves two or more agents working together as a team.
This model is ideal for those who want to focus on specific areas of the business, such as marketing and sales, while also allowing each agent to benefit from the shared resources.
With this type of model, each agent takes on different responsibilities, depending on their expertise. For example, one could handle marketing and lead generation while the other focuses on closing deals. This allows for a more balanced approach since each partner can draw upon the strengths of the other to create an effective strategy.
The Pros
On the plus side, this model allows each agent to focus on their specific areas of expertise while still benefiting from shared resources such as marketing materials and administrative support. This type of model also offers more stability than working alone since agents have someone else to rely on if they run into any problems or need extra help. Additionally, it's easier to build relationships with clients when working as a team since there are multiple people available to answer questions or provide advice.
The Cons
On the downside, there can be conflicts within a partnership real estate team due to different communication styles, conflicting priorities, and varying levels of commitment. This can be especially tricky if one partner is more experienced than the other and takes the lead in making decisions. Additionally, having two or more agents responsible for different tasks in the same organization can create potential issues in terms of communication and decision-making.
Reports vary widely, but it's estimated that between 50% and 80% of business partnerships fail. That’s a high failure rate. This is a startling figure for entrepreneurs who are looking to start successful businesses with partners. The failure rate of business partnerships can be attributed to various factors, such as conflicting values, poor communication and inadequate planning.
Team Lead Model
The Team Lead Model happens often by accident, or so it can look and feel that way.
Typically the agent is a great solo agent, producing at a high level, and has a great personal brand. There is spillover of leads, referrals, and business. They feel like they are leaving money on the table. Other agents or those looking to get into the real estate industry see the success of the agent and ask to join them.
Since there is no team, and no existing SOP or systems in place, the operation becomes more about following the Team Lead around or doing what they say.
The Team Lead is based on the brand of the agent, their personality, and their past, and current success. This model is easy to spot by the name - usually the name of the agent with the team or group after. (ex. Johnson Team, Smith Group)
A Team Lead operates with what I call "drafting". A Team lead brings agents in to draft them. The agent tries to follow behind and pick up what crumbs are left behind.
The Pros
The Pros of the Team Lead model are many. For one, the agent is able to focus solely on their area of expertise and can leverage their personal brand and past success to bring in additional clients. This type of model also gives the team lead control over operations, decision-making and communication, as they are ultimately responsible for setting the tone.
The Cons
The cons of the Team Lead model are also significant. Firstly, it can be difficult to establish and enforce clear roles and responsibilities within the team, as it is often based on the personal brand and success of the team lead. This can lead to a lack of accountability among team members, with each partner assuming different tasks without any clear guidance or direction. Additionally, the team can become too reliant on the lead agent for decision-making and problem-solving, which can be difficult to sustain in the long run.
Also, because this style tends to operate with people being closer in relationship to the Team Lead, the agents and staff are closer to the finances. It becomes easier for the team to question why the Team Lead is making so much money compared to them. This leads to frustration and resentment.
Leads Team Model
The other type of "team" is a Leads Team.
And it's exactly what that sounds like. It's more brand-oriented and provides leads to the team members. Basically operating as if saying, "Hey, if you come join us, we're gonna give you 50 leads a month, or a hundred leads a month." Or whatever that offer is.
A Leads Team usually has decent systems, standards, and expectations for agents joining them. An extreme example of a Leads Team would be Redfin.
Redfin is absolutely a Leads Team. It's built around a brand and that brand goes, "Hey, we're gonna pay you money. We're gonna do this, we're gonna do that for you. And our expectation is you follow our rules. You'll make a good living, but you gotta follow our rules."
The Pros
The pros of a leads team model are it provides agents with a steady stream of leads that can be used to generate revenue and grow their business. Additionally, the structure of such a team ensures that each agent is held accountable for their performance and results. Additionally, it also allows for scalability, as the team can grow without needing to increase overhead costs on a per-agent basis.
The Cons
The cons of a Leads Team model are it is dependent on strong management of the leads being provided. If the quality or quantity of leads is not up to par, then all agents will suffer from decreased performance and lower revenues.
Secondly, there may be issues with loyalty between agents and team leaders, if each agent doesn’t feel like they are receiving what they are paying for.
Finally, the system can become overly reliant on the lead generation process and processes that do not guarantee consistent returns in terms of sales or revenue growth.
RETOO Agent Model
RETOO stands for Real Estate Team Of One. Being a RETOO agent doesn't mean you're solo, but it means you're not trying to scale or hide behind a team. You are using leverage to help you get out in front of more clients.
What's the difference between leverage and scale, you might ask?
Leverage is doing more with the same or less, scale is trying to do more with more.
A RETOO agent isn't interested in scale. They want leverage. They are interested in doing more with less.
A metaphor I use to explain the RETOO Model is to be like Santa.
Santa basically runs a RETOO operation.
He’s out front.
Delivering the gifts.
Meeting the kids.
Making a list.
Checking it twice.
He leverages the not-out-front stuff to the elves.
Santa is a team of one.
You might think traditional teams do this… but they don’t.
That would look like something called the North Pole Team.
There would be a picture of Santa in the middle and the elves on each side.
Santa wouldn’t be at the mall and doing pictures. There would be an elf to do that. And maybe an IEA. Inside Elf Agent.
There would be teams of elves, reindeer and sleighs heading out to deliver the gifts.
Santa would be back in the North Pole.
Probably focused on recruiting more elves and training more reindeer.
The Pros
The major advantage of the RETOO Agent Model is its flexibility.
By relying on leverage instead of scale to build the business, agents are able to customize their approach and tailor it to each individual client's needs and their own personal strengths. This makes them more efficient and effective in both finding and closing deals. Additionally, RETOO Agents have much more control over their business than they would with a larger team, as they can take ownership of all decisions that affect their business.
Another benefit is the cost savings associated with the RETOO Agent Model. Since agents are leveraging technology, processes and other resources, overhead costs associated with running a larger team are eliminated. This allows agents to increase profitability and focus on growing their business in other ways. Additionally, since there is no need for huge amounts of office space or staff, these costs are also eliminated which further reduces expenses.
And finally, RETOO Agents benefit from being able to focus on developing relationships with clients by providing personalized service that can't be replicated in a large team setting. By having direct contact with clients throughout the entire process, agents can better understand their needs and offer solutions tailored to meet those specific needs. This helps build trust between agent and client, making it easier for agents to close deals quickly and efficiently.
The Cons
The major disadvantage of the RETOO Agent Model is that it can be difficult to gain momentum alone. Without a team of agents or staff, there is a greater reliance on an individual agent’s ability to find leads, close deals, and market their services. This makes it challenging for one person to gain momentum and keep momentum.
Finally, when working as a RETOO Agent, it can be hard to manage work-life balance and prevent burnout due to the high levels of responsibility they have over all aspects of the business. Without other team members or staff members around them to spread workloads or pick up tasks when necessary, an agent might feel overwhelmed if they don’t plan ahead or prioritize correctly.
The Model Model
Once you have the RETOO Model locked in you can move into the Model Model. This is where you have your operations and systems locked in, you know what works and doesn't work in your marketing, and you can now transfer what you do, how you do it and why you do it that way to someone else.
And because you have leverage in place already the switch from being the One producer to now having Many producers is that much easier.
With a Model Model you are not trying to recruit the most agents to your team, you're working at identifying the best people to plug into your model.
It's not a numbers game, it's a matching game.
Your model is proven, and it is the focus of the "team," not your personality or the number of leads you provide the team.
The Pros
The major advantage of the Model Model is its scalability. By relying on proven operations and systems rather than individual sales and marketing skills, agents are able to focus on growing their business and expanding their reach. By plugging in excellent agents into an existing model, they can quickly increase their team’s size and capabilities while still maintaining an effective structure that allows them to achieve success.
This also helps reduce costs associated with training and onboarding new hires, as all agents are expected to have a baseline knowledge of the procedures used by the team so they can quickly learn the model's processes. This makes it easier for successful teams to expand without incurring additional overhead expenses associated with implementing new systems or developing training programs.
Additionally, the Model Model has the benefit of encouraging specialization across different areas of expertise within the team. While each agent should be familiar with basic procedures related to sales and marketing, agents specializing in particular areas can provide a more tailored approach for clients by leveraging their unique knowledge and experience. For example, an agent focusing on luxury real estate may specialize in helping high net-worth individuals find their dream homes, while another agent might focus on helping first-time buyers navigate through buying their first condo.
Additionally, since all agents understand what processes lead to success, they can make adjustments as needed without having to go through extensive retraining periods or waste time on unproductive activities and reinventing the wheel.
The Cons
The major disadvantage of the Model Model is that it can be difficult to maintain consistency if agents do not share the same values, approach, or goals. Agents who are not committed to a team’s core values may take shortcuts and underperform, making it more difficult for the team to achieve success. Additionally, if agents do not follow instructions correctly or stay on message, there can be discrepancies in how clients are serviced or how messages are presented which can be damaging for teams.
Finally, since agents are expected to follow set processes and procedures created by the model, it can be difficult for individual personalities and styles to shine through when serving clients. Agents should strive to create an environment where their personality shines through without compromising their ability to fulfill their duties as part of the team model.
FINAL THOUGHTS
Overall, there are many different real estate team models to choose from when building your business. Each model has its own advantages and disadvantages that need to be taken into consideration before making a final decision.
The Model Model is advantageous for scalability and specialization within the team, but it can be difficult to maintain consistency if agents do not share the same values or goals. The Partnership Model allows two experienced agents with complementary skillsets to join forces in order to better serve the client’s needs, while the Team Lead Model encourages collaboration between an experienced agent and newer ones who can learn from their lead's expertise. Finally, the Leads Team Model enables teams of salespeople to focus on generating leads through targeted marketing efforts so they have more opportunities for success without having every member actively involved in closing deals.
Ultimately, any one of these five real estate team models could be beneficial depending on your individual circumstances, goals and strengths.
WHAT'S NEXT?
In this article, we talked about five real estate team models that have been proven successful in today’s market. Now, it is time to decide which model is right for you and your business. Consider the advantages and disadvantages of each option, as well as any other factors such as cost or scalability. The good news is you don't have to do that alone. This is exactly what I help agents do. Check out how I can do that at darinpersinger.com/map
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FAQ's On Building A Real Estate Team
What are the different models for creating a real estate team?
The most common models for creating a real estate team are the RETOO Model, the Partnership Model, the Team Lead Model, the Leads Team Model and the Model Model. Each one has its own advantages and disadvantages that need to be taken into consideration before making a final decision.
How do I choose the best structure for my real estate business?
Choosing the right structure for your business depends on your individual circumstances, goals and strengths. Consider what type of team model is best suited to meet your needs and which would offer you the most success. Additionally, you should also consider any potential drawbacks or challenges associated with each model before making a final decision.
What are some tips for creating a successful real estate team?
When creating a successful real estate team, it's important to develop an understanding of basic procedures related to sales and marketing, as well as operations for transactions, and a system for recruiting, hiring and onboarding. Consistency among members is key – make sure everyone shares the same values and goals, and that clear instructions and processes are established for all agents to follow.