Skip to content

The Ultimate Guide to Real Estate Agent Teams

The Ultimate Guide to Real Estate Agent Teams

[ReviewDisclaimer] 

In this article, we will go into lengthy detail about real estate agent teams. We’ll go into topics with shorter posts you can check out, like:

Introduction: What are Real Estate Agent Teams?

As a real estate agent, one of the options that you have as you begin your illustrious career is to work with a real estate agent team as opposed to being an independent agent.

Before we dwell into the details, just to clarify: real estate agent teams are not brokerages. All real estate agents must hang their license with a brokerage, a team will also operate within a sponsoring brokerage.

What is a Real Estate Agent Team?

A real estate agent team is where multiple agents, usually within the same MLS area, form a team to the mutual benefit of all team members and clients.

Team members often brainstorm and collaborate to help each individual client with their unique and specific needs. Tasks within the team are usually delegated by the team lead based on every agent’s specialty and niche.

Working on a team is becoming a more popular choice for real estate agents. In a 2018 study done by the National Association of Realtors, it was said that nearly 30% of all real estate agents in the nation works in a partnership or team.

Many real estate agents know of real estate teams, but don’t fully understand the concept of teams and the value they provide to agents of all experiences. Real estate teams are a great option for both the experienced icon agent team leaders looking to build a sustainable and streamlined business or the brand new agent looking for structured support from a large group of helpful colleagues.

Due to the variety of teams out there and each of their different aspects, we separated our guide down into 5 sections for ease of reading:

  1. Team Structures
  2. Types of Teams
  3. Joining a Team as a Member
  4. Starting, Building, and Leading Your Own Team
  5. Tips for Building Your Own Team

Team Structures

There are no set structures for real estate agent teams that are all encompassing. Real estate agent teams are like businesses, there are different functional areas that a team leader must employ. Usually teams can be structured in 3 different functional areas:

  • Lead Generation: team leader(s) typically generate client leads
  • Transaction Execution: agents work with clients and close transactions
  • Team Facilitation: as the team grows, other staff can be hired to help facilitate lead generation, transaction coordination, etc.

It is usually the team leader’s job to generate and assign leads to the team members. That’s where the value of teams for real estate agents stem from, the ability to work leads that have been generated for you through different methods.

The most value a team can offer its agents is lead generation

After the team lead generates and assigns the lead, it is up tot the agents themselves to cultivate them and turn those leads into clients or customers. In different types of teams, the agents will have different roles, but generally it is up to the team members to close the transactions.

Commission Splits

Team splits are determined by the team leaders themselves or according to their sponsoring brokerage’s standards. Some brokerages will have minimum or maximum referral percentages for team leaders, usually no less than 25% and no more than 50%.

Once a team begins to expand, it is important to adjust your splits accordingly based on the volume of transactions being done and the amount of work each agent has to do put forth. It is also important for the team lead to begin hiring more staff such as leads managers or transaction coordinators to help the team lead and the agents develop a more sophisticated and streamlined system to conducted business.

Team leaders decide their own splits and can adjust them accordingly when they grow their team

Why Teams Exist

There are a multitude of reasons teams exist. More experienced agents tend to start their own teams in hopes of building a more sustainable and leveraged business rather than relying on themselves solely for income. While newer agents tend to join teams when they first get started in real estate because of the support and more importantly lead generation the team lead has to offer.

Generally these are some reasons why teams are becoming more popular with all agents:

  • Extra income stream for team leaders
  • More sustainable business model
  • Collaboration with colleagues
  • Support for newer or part time agents
  • Lead generation and assignment from team lead to members
  • Source of knowledge for new agents

Types of Teams

There are several different types of real estate agent team models out there. Most are centered around lead generation from the team leader like we discussed earlier. Each type of team has their own unique way of benefiting both the team members and the team lead.

Most real estate agent teams can be grouped into one of 4 different categories:

  • Partnerships
  • Self organized
  • Rainmaker
  • Mega Teams

Partnerships

A partnership is usually formed between two agents who want to collaborate with each other to best serve their clients needs. Usually partnerships are formed between spouses or family members that are related in some way. On occasion, partnerships can be formed by two agents who share a similar level of experience that have contrasting strengths and weaknesses.

Partners usually divide and conquer their tasks based on their individual strengths. For example one agent might focus on marketing while the other focuses on contract negotiations. The most important aspect of partnerships is that each agent is able to leverage their partner’s time and resources in order to complete more transactions between the two of them.

Partnerships also provide clients with more credibility since there are two agents working on their behalf during a transaction. Clients can close their transactions faster since there are essentially two agents representing them.

For a partnership to form on the technical side there usually needs to be. written partnership agreement. This document will outline the division of tasks and responsibilities for the partnership so that there isn’t any confusion as to which agent focuses on which facet of the business.

You will also need to decide whether operate under an entity such as an LLC. This can be a great way for partners to clearly understand and address how expenses will be covered and by whom.

Commission splits in a partnership is commonly 50/50. On rare occasions where one agent is doing more work or covering more expenses, that agent might get a larger percentage of splits.

Self Organized Teams

Self organized teams are almost like a referral partnership between the team lead and the agents. This is where the team lead will give referrals or leads to other agents in return for a percentage of commissions. A self organized team is the most common type of team started by new team leaders.

This type of team offers the least support to their agents and mainly focuses on lead generation. There is usually not a sophisticated system in place for the team to streamline transactions. The team leader’s job is to use their experience in marketing and lead generation skills to cultivate a plethora of leads to refer out to their agents. Then it is up to the individual agent to turn those leads into clients and close the transactions themselves.

After the team generates the leads, the real estate agent has to turn them into clients.

The team leader will have to provide their agents with a written referral agreement stating the percentage of commissions split between the agent and the team. Although there is no set split, the team lead will generally take the standard 25% referral fee on a commission earned by the agent from any leads the leader helped generate.

A great aspect of this type of team is that agent team members are more than welcome to go out and generate their own leads without needing to share any commissions with their team leader. It is a great structure for agents who are looking for a multiple ways to get leads rather from their own efforts or from their team.

Standard Team

This is the type of team that most people typically think of when they think real estate teams.

The team leader is responsible not only for generating leads on a standard team, they are also responsible for providing support, formal leadership, systems and a team split. Most of the time an informal team will evolve into a standard team over time as the team leader develops more systems in place for their agents aside from simply generating leads.

On a standard team, the team leader will look for specific roles from their agents in order to coordinate and cater to their specific business style. Usually, on a standard team, there will be one or more agents working only listings, agents working with only buyer clients, and newer or less experienced agents who work open houses.

The team’s size and specific structure will depend on the team leader’s goals. If a team only works listings then there might be agents on the team that specialize in each niche: luxury, single family, condo, fixer upper, etc. If a team only wants to work with buyers then the team’s agents might consist of agents who specialize in helping: first time home buyers, veterans, seniors, etc.

Standard teams will require written team agreements outlining team splits, procedures, termination policies, expectations, and marketing.

Mega Teams

This is the team structure for for agents who want to build a substantial team of more than 10 agents. Mega teams are the largest type of teams and serve best for agents who are looking to build a true cash-flowing business for themselves.

A mega team is similar to a standard team in that it requires the team leader to provide a structural system for their associates as well as generate leads and delegate tasks. But it is also different from a standard team because mega teams will require a lot more staff and coordination.

Usually a mega team will work both listings and buyer clients and hold a firm and good standing reputation in their local market area. The most crucial component of a mega team is that it has systems in place to train and mentor new licensees in order to expand and scale their business quicker.

Mega teams are almost like a brokerage within the brokerage, where the team has enough systems in place to facilitate tasks and operate on a much larger scale than most standard and informal teams. Instead of relying on the reputation and effort of the team leader, mega teams are built on brand recognition and the systems they offer clients and agents for a smooth transaction.

These teams usually close a minimum of $40 million in transactions or 175 total transactions each year depending on their market. As you can tell, mega teams are sustainable and scaleable businesses that can help the team leader build long-term wealth.

What Type of Team Is Best For You and Why

When deciding which type of team you should join as a member you need to look at which team can provide you with the most value. If you’re already a decently successful independent agent, you might want to go with an informal team for the extra leads. But if you’re a new agent still trying to get your feet wet, you might want to join on with a mega or standard team for the added support and structure on top of the lead generation and task delegation.

If you’re looking to build a team, start small then scale big. Try starting an informal team first then expanding to a standard team before jumping straight away into building a mega team. That way you can gain experience in the easier aspects of team building first. Then as you put more systems in place and scale your team for more business you can then change your team structure accordingly.

Building a different type of national team

Now that we’ve just went over all of the different types of traditional real estate teams, it’s worth mentioning that running any one of those types of teams can take a lot of time. Some brokerages are offering ambitious, wealth minded agents with an opportunity to build a different type of real estate agent team that can be done on a national or even international scale.

These are called revenue share organizations within a brokerage and can be a great alternative option for newer agents who are looking to build a team. Learn more about revenue share organizations in real estate and how you can build one today!

Joining a Team as a Member

When you first get your active license in real estate, other than choosing a brokerage, your most important decision is to decide whether you want to be a solo agent or join on with a team.

See for yourself which path is best for you: Solo Real Estate Agent vs Team

Advantages of Joining a Team

Some agents have a hard time generating their own leads because they don’t have the credibility and seniority in their market to compete with more seasoned agents. A team’s job is to give an agent a sense of structure and direction for how they should go about their business.

What you can learn and gain

Working with a team can be a great option for all agents. There are a plethora of value in all types of teams. From the all important lead generation to the support and structure a team provides, a team can make a difference in an agent’s career in a positive and dramatic way.

Here are just some of the things that you can learn and gain from joining a team:

  • Continuous funnel of client leads to pursue
  • More transactions = more commission income
  • Focus on sales rather than on lead generation
  • Splitting commission for each transaction closed rather than up front paid lead generation with an unknown return on investment
  • Agents with no existing referral network can get leads easier
  • Still keep your usual commission split on leads you generate

Lead generation

As we discussed earlier, lead generation is the single most important value proposition that a team can offer real estate agents. In every type of team, the one consistency is that the team leader is responsible for generating and referring leads to their agents.

In today’s space, brokers rarely generate leads for their agents anymore, they have to focus on more important tasks such as contract review and providing training for agents. A team is the only place real estate agents can get a continuous funnel of leads to pursue nowadays. If an independent agent is a weak lead generator they would need to spend a lot of upfront money to buy leads from real estate lead generation services such as Zillow or BoldLeads.

Collaboration

For more seasoned agents who already generate most of their own leads, the collaboration from team members might be the most valuable aspect of a team. Working as an independent agent can be a lot of work, you are essentially relying on yourself to earn an income unless you have incorporated one or more wealth building tools.

Collaboration with fellow agents is a huge value add for experienced agents to join teams.

Working on a team with colleagues can relieve some of that stress. If you choose to go with an informal team, you can get leads from two different funnels, which means you may never run out of leads and can focus more on sales. If you choose a standard or mega team you can focus down on a more specific niche that you excel in and delegate other tasks to staff members or other agents.

Leadership and structure

With a team comes a established and experienced real estate agent team leader. Your team leader is supposed to build out a clearly defined system for you and other agents so that everyone knows their exact sequence of procedures when they take up a client. This can be a great way to add some much needed structure to the hectic business day of a real estate agent.

Other than defined structural support, a team leader is also responsible for providing leadership and coaching to their agents, especially on smaller standard or informal teams. Having a close working business relationship with an experienced team leader can elevate your own business. If you’re looking to start your own agent team in the future, joining a team can be a great way to learn from some of the best who have build and are running successful high producing teams.

Best Type of Agent for Teams

Joining a real estate agent team can be a great fit for ALL agents, but there are agents that can benefit substantially more from joining a team than others. Usually the best candidates to consider joining a real estate agent team are:

  • New agents
  • Agents with no established sphere or referral partners
  • Agents who’s strong suit is not lead generation
  • Agents that would prefer to take leads from a team than generate their own
  • Part time agents

Starting, Building, and Leading Your Own Team

If you’re an agent who is ready to build and lead your own real estate agent team, the first thing you need to figure out is if your brokerage has any guidelines in place for what type of team you can start and the procedures to do so. Since you won’t need to be a broker to start a team, your agent team will work under an encompassing brokerage.

Being with the right brokerage can save team leaders a lot of money and earn bigger profits!

That is actually one of the biggest pros of starting a real estate team, you can essentially build a business without needing to carry all of the stress and risk of being a broker. By working under a brokerage, your team will have access to the same amenities and resources that your brokerage offers it’s agents, making your job as the team leader much easier and more streamlined.

Consider Switching to a More Team Beneficial Brokerage

If you’re really serious about building a sustainable real estate agent team, you might want to consider switching to a brokerage that is more beneficial for real estate teams. That can be a multitude of things: better splits, more support functions, lower costs, better structure, etc.

Better splits

As a team lead, you will take a portion of your agents’ gross commission based on your team agreement. But since your team will still need to work under a broker, your broker will still take a percentage of your team’s gross commission income. For the agents on your team, that means they will need to split a percentage of their commission with you, the team lead, then split another percentage of their take home commission with the brokerage.

Here’s an example:

An agent on your team earned $5,000 GCI on a transaction. Your team has a 75/25 split which means the agent takes takes $3,750. Your broker has a 60/40 split. Then your agent has to pay another 40% to the broker, which means they end up with a take home commission of $2,250.

If you moved your team over to a brokerage with a better split, your agents will get to take home more commission while you get to keep the same team structure. If your team was sponsored under a brokerage that had an 80/20 split, your agents will get to keep a total of $3,000 on that same $5,000 commission.

Being at a brokerage with a better split will benefit you as the team leader as well. Since most brokerages require teams to be counted as a single entity when it comes to splits, meaning that they will calculate splits based on the total revenue you made with your team as well as your own efforts, you as the team leader will also get to keep more of your commission revenue as income.

More Support

When picking a brokerage to hang your team under, another very important aspect that you have to consider aside from splits is the support that the broker is willing to offer their agents and teams.

Your broker should guide and support their team leaders for better business and growth.

A team lead can save a lot of time and money if they hang their team with a brokerage that provides you and your team with tech support, a CRM software, transaction management, accounting, free office space, training, branding and marketing resources, etc. As you expand your team you will need to provide your team with most of the functions anyway in order to run a smoother business. Being with a broker that already has most of these functions on the ready means that you will just have to implement them into your own business as you being to scale your team.

What You Need to Know

Other than picking the best brokerage to associate your team with, you also have to develop your own business plan in order to build a long standing and cash-flowing business.

Starting a team will require you to conjure up a solid and clear plan that ranges from recruiting agents to transaction management. Here are just some of the things that you need to work out before you begin implementing your strategy to start and lead a real estate team:

  • Recruiting agents to your team
  • Figure out what your long term goal is for your team
  • Decide your team split
  • Establish a team agreement contract
  • Marketing and branding your team
  • Develop a lead generation strategy that can generate leads in volume
  • Institute a lead referral/assignment sequence
  • Put in place communication functions and expectations with team members
  • Plan boundaries and guidelines for your team, define roles and expectations for success
  • Streamline processes for agents on your team
  • Add staff and support functions as needed as your team grows and scales

Run it like a business

Building a team is just like building a business. You have to work to put the right systems in place for your associates so that everyone’s jobs are easier and clearly defined to avoid confusion and chaos. Just like any successful business, running a real estate team will require a substantial amount of upfront work. But as you scale and grow, make sure you are implementing enough support and facilitation systems that you are able to remove yourself from having to constantly work inside the business.

Remember: the team should not rely on you, but the systems you’ve built. You always want to work on your business, not in it!

Tips for Building Your Own Team

Who Should Start a Team?

An agent of any experience can start a partnership or an informal referral based team. Some brokerages generally require agents to have completed a certain number of transactions before they can start a standard or mega team.

Building a team is best for agents who already have a very solid and effective strategy for lead generation. Agents with a background or interest in business and marketing are perfect for starting a team.

Social media is a great way to market your business and generate leads for your team.

If you are an agent who have mastered the marketing and lead generation side of the business, but might struggle with negotiations, sales, technicality, or just don’t have the time to work all of the clients you’ve generated, starting a team can be a great way for you to make more income and scale your business.

Using Assistants and Staff

As your team begins to grow, you should consider hiring personal assistants and eventually, a team of staff to help you facilitate and delegates tasks too.

Your assistant is there to help you so you can take your business further!

Most individual agents today are already incorporating the help of assistants to diffuse their daily tasks. A personal assistant can help you keep track of incoming calls, send out mass messages, add things to your calendar, and more so that you can focus on the really important parts of your business.

As a team leader, having an assistant in the early stages of your team building can be crucial to your success. Your assistant can help you screen and delegate leads, schedule team meetings, and keep track of transactions. Not only will that save you a lot of time so that you can focus on growing your team, your assistant can also be a second set of eyes to catch any mistakes that you might’ve made in some of your daily business dealings.

Expanding your staff

Once you have grown your team into a standard or mega team, you might want to consider hiring more specialized staff aside from your personal assistant. A team of specialized staff can be of great value to you and the agents on your team.

When you have over 10 agents on your team and are doing transactions in bunches, you and your agents will need a more structured process as well as run into more issues. Your staff can help you and your team resolve those issues while the agents focus on sales and you on lead generation and marketing.

Some key staff members a team may have include:

  • Transactions coordinator
  • Leads manager
  • Team accountant
  • Marketing director
  • Showing assistants

Recruiting Sales Agents

Other than hiring your admin staff, you need a plan in place to recruit actual real estate agents onto your team. The best way to do that is to offer a competitive advantage over other teams or value adds from simply being an independent agent.

Recruiting agents to your team is the most crucial component of starting a team

How big do you want your team to be?

First you have to figure out how many agents you want on your team initially so that you have the right strategy and won’t under or over expend your recruiting efforts.

Generally speaking, a standard or informal team can consist up to 5-7 agents. Once you have over 10 agents on your team, you technically have a mega team by definition.

Start by asking around your network of agents in your local market area. Look for agents that are specialists in a certain niche, usually a niche that you want to expand into. You want to go after agents with a mid level of experience first since you don’t have the system in place to train new agents or the value adds to entice top producers.

You have to decide in the beginning which direction you want your team to go in to recruit the right agents.

Decide how many of each type of agent you need. Does your team only work listings? Do you also want buyer agents on your team? What kind of leads are you generating? Buyers or sellers? Both? These are questions you should ask yourself so that you know how many of each type of agent you want on your team.

Decide your value add and strategy

Once you’ve decided how many of each agent you want to recruit, now you have to come up with value adds so that agents are actually incentivized to join your team. Will you offer more resources? A better brand? Free marketing from the team? Can they work their own leads? Usually lead generation is a big value add that almost all teams offer. You, the team leader, focuses on generating the leads for the agents and all the agent has to do is turn them into clients or customers and close the transaction. This is perfect for agents that are more sales oriented.

Teams are perfect for agents that are sales oreiented.

The last step is deciding how you want market yourself and your team to real estate agents. There are a few approaches that you can take. Some agents will recruit on social media or the internet using both paid ads and organic reach. Other agents will take a more local and personal approach and meet prospective recruits at networking events or local MLS meet-ups.

Get Started!

Start or join a real estate agent team today!

Now that you know everything that you ever wanted to know about real estate teams it’s time to take some action and decide whether a team model is the right path for you. Whether if you’re an agent looking to join a team for the added structure and funnel of leads or someone looking to build a real business by starting their own real estate agent team, we hope we have given you the necessary information to be successful!