ARE YOU AN INDIVIDUAL AGENT OR JUST A TEAM DISGUISE?
Starting a team seems to be one of the hottest trends in real estate right now. Younger, hungrier agents are determined to one day have multiple assistants, several buyer agents and a moving truck with their smiling picture on the side.
The fastest growing real estate company in the world, Keller Williams, teaches its agents a step-by-step process to create a team so that one day they might exit the business and live off of the passive income it provides. Zillow is even incorporating teams into their Agent Profiles and developing new tools to help teams grow.
I manage a 10-person team, and I saw how real estate was changing from an individual sport to a team sport. I saw teams becoming so prominent in the industry that I built Nekst to help individual agents and teams be better at running systems within their business.
Although building a team is more popular than ever, there exists a heated debate over whether operating as a single agent or a team is better for the consumer. What I find most remarkable is that the industry has not defined what is means to be a team.
According to Merriam-Webster, the word team originated before the 12th century and meant “two or more draft animals harnessed to the same vehicle.” It later expanded to mean “two or more persons associated together in work or activity.”
Based on this definition, one could argue that a single agent working with an assistant is a team. I don’t know any top producing agents who do not utilize at least one assistant (and yes, your unpaid spouse counts as your assistant).
The blur between single agents and teams gets even murkier when you look at the annual real estate ranking report produced by Real Trends. Real Trends publishes rankings for the Top 1,000 Agents in America by total transactions and volume in both the team category and the individual category.
According to the most recently published figures, Ben Caballero was ranked the No. 1 individual producing agent in America by Real Trends for completing 2,383 sides. In other words, Caballero closed 6.52 sales per day including weekends and holidays as an individual.
In fact, Caballero sold 866 more homes than Rhonda Duffy out of Alpharetta, Georgia, who manages the largest team in America and did 1,517 sides last year. I can’t imagine how Caballero could individually manage this monstrous amount of business.
Even the lowest ranking individual producer on the Real Trends list, Suzie McDowell from Keller Williams, did 126.7 sides. (How she got .7 of a sale is a mystery better uncovered during my next article.) This translates to a home sale every three days, a workload that I again believe cannot be managed without some additional support.
So if the most successful real estate agents out there are working in the capacity of a team, why is there so much heated debate over whether a team is good or bad for the consumer? Perhaps the point of contention isn’t really about folks working together as a team but instead about how some teams operate.
Let’s explore a few of the more common reasons that individual agents hate teams.
1. A rainmaker
Complaint: Teams include a “rainmaker” who lists homes under his or her name but has limited involvement with the transaction, thereby misleading the seller.
This is sometimes true, but I don’t personally see this as a negative. Part of managing a team is creating and executing precise systems that are built to bring about the best selling experience for a client.
Most individual agents don’t have these systems since they work independently and tend to keep track of their business in their head.
But with a team, sellers are connected to a group of specialists who follow a well-defined process for ensuring a consistent and well-rounded experience for the client.
Although the seller might not be in frequent communication with the rainmaker, the processes in place for managing that sale are an extension of the rainmaker.
2. Commission splits
Complaint: Teams get better commission splits and better benefits from my brokerage.
Teams reap the benefits of economies of scale and have advantages that individual agents do not have when it comes to leveraging better splits.
Just like the cast on the TV show “Friends” bound together to negotiate a crazy high per-episode salary toward the end of the series, successful teams can do the same.
And when it comes to leads, I find that brokerages tend to favor the independent agent when it comes to lead distribution because teams are capable of generating leads on their own.
If you’re not getting many leads, it likely has nothing to do with your operating structure — it probably has more to do with the fact that your broker either has little confidence in your ability to close a lead, or you simply aren’t viewing your broker as a lead source who needs to be marketed to just like a consumer.
3. Assembly lines
Complaint: Teams are turning the transaction into an assembly line rather than building a one-on-one relationship.
Working with a team is more like an assembly line. But so is going to a restaurant, obtaining a mortgage, checking into a hotel and attending a sporting event.
Certain industries are either too complex to be managed by a single individual or consumers expect a level of service that individual agents cannot adequately provide. In my opinion, real estate is become more complex, and the demands of consumers are increasing.
Although there are still plenty of individual agents creating raving fans, the overall market share for individual agents seems to be declining which would worry me if I were an individual agent. The most successful teams are the ones who operate like an assembly line while also building a genuine rapport with their clients.
Complaint: Their marketing is everywhere: yard signs at every corner, a Glen Beck endorsement on the radio and an ad you can’t ignore on your grocery cart.
Although this might completely irritate any agent in the market, it is not grounds for feeling negative. The fact that teams spend money on traditional advertising only helps to remind consumers of our presence in the industry.
Jealousy is something we all deal with on occasion, but you should allow these feelings to motivate you inside rather than irritate you.
In conclusion, your decision to work alone or build a mega team should not matter. It’s all about where you find fulfillment in this crazy industry. For individual agents, it might be the hug at the end of the closing. For a rainmaker, it might be the bird’s-eye view of the operation you’ve built from nothing that fulfills you.
But should you have the desire to reach the highest levels of success in this profession, I hope we all can agree that you can’t do it alone.
As written for inman.com