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Most agents dream of the day they’re ready to make their first hire.
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But those who have done it know this is where the real fun begins.
(And by “fun' we mean not only bigger revenue, but all the high-level challenges and leadership headaches that come with it.)
We’ve mined through the leading industry resources, collecting frontline advice from brokers, agents, and coaches with a combined total of over 220 years in the game, to bring you 9 simple steps that will help you build the real estate team you’ve been dreaming of (and avoid some of the most common pitfalls along the way).
Here's what we'll cover:
- Step 0: Double-Check Your Decision
- Step 1: Get Your Underlying Systems in Order
- Step 2: Hire the Right Role at the Right Time
- Step 3: Understand Your Real Estate Team Inside and Out
- Step 4: Use Your Intuition
- Step 5: Create a Real Estate Team Structure That Works
- Step 6: Fire Fast
- Step 7: Lead with Why
- Step 8: Don’t Forget the Little Things
- Step 9: Don’t Beat Yourself Up
Step 0: Double-Check Your Decision
Before you start a real estate team, make sure it’s the right business move for you. There are a few things you’ll want to consider.
Do you have enough volume to make it work?
The most important factor is, do you have enough volume to justify building a team? Do you have so many listings and transactions in progress that you’re sacrificing new leads? Are you so strapped that you have no time to spend on generating new business?
Generally speaking, a good benchmark is 40 transactions per year. In most cases, 50-60 transactions is the upper limit for an individual agent to handle on their own. So if you’re averaging about one transaction per week, you’re probably going to need some help to handle any additional leads coming your way.
In a similar vein, will you be able to generate enough new business to get a healthy ROI on your new hire? Starting a real estate team can be an exciting, even emotional decision, but balancing the financial realities is critical.
'If you are an individual agent, fairly new to the business, and you're not doing a ton of business yourself—starting a team should be the furthest thing from what you do. Bringing more people on is not going to make you more money. It's going to cost you more money and you better ensure that you have enough business to support yourself and business to support additional families,' says Justin Havre of JustListedCalgary.ca.
[ADD QUOTE IMAGE: “Many agents don’t understand the amount of transformation that needs to take place to go from being a top agent to a top team leader.” Taylor Hack, HACK&Co]
Are you ready to be a team leader?
Even if you’re successful as a solo agent, leading a team requires its own special set of skills. “[Many agents] don’t understand the amount of transformation that needs to take place to go from being a top agent to a top team leader,” says Taylor Hack of HACK&Co.
But if you’ve got the leadership chops (or are willing to develop them), then starting a team might be the right move for you.
Are you starting a team for the right reasons?
Being overwhelmed with incoming opportunities may not be enough reason to start a team. According to Kathleen Black, many team leaders come into the role for the wrong reasons.
“A lot of team leaders don’t imagine themselves owning a theater, so to speak. But that’s kind of what it is. As a team, they imagine themselves as the star actor or actress. But that’s not what a team is,” she explains.
Understanding your (and your team’s) strengths and weaknesses will be crucial as you move forward—but more on that later.
Step 1: Get Your Underlying Systems in Order
Every great play starts with a game plan.
Your very first step when building a real estate team is to set your revenue goals and work backward to determine how many leads and team members you’ll need in order to meet them.
As team leader, your real role is Chief Lead Generator. And while you need to have agents at the ready to manage leads from many sources, it’s crucial that your systems are capable of handling an increase in lead volume.
According to co-founder of WBNL Enterprises and real estate coach Jan O’Brien, these are the key real estate systems to set up as you get started:
- Business Plan and Goals
- Vision, Purpose, and Brand
- Marketing and Advertising
- Database and Referral System
- Listing Inventory and Farming System
- Buyer, Escrow, and Transaction Management System
- Lead Generation and Follow-up Systems
- Internet, Blogging, and Social Media Marketing
- Financial, Productivity, Profitability Reports, and Forecasts
[ADD QUOTE IMAGE: “The foundation of building a profitable real estate team is to have your own house in order first.” – Jan O’Brien, RealEstateTeamBuilder.com]
Like Jan, Dean Linnell has mastered the art of systemization.
As a ski-instructor-turned-solo-agent, Dean relies heavily on his technology stack to get his house in order, and at the center of it all is Follow Up Boss, which he integrates with his core lead sources and tech tools to stay streamlined across the team.
All his fine-tuning has reaped serious rewards:
“When we had a team of three buyer agents and two assistants, I did 97 ends that year,” he says. “Then when we got our systems dialed in… I did 92 ends on my own.”
That’s what we call firing on all cylinders.
Step 2: Hire the Right Role at the Right Time
Despite the mountains of advice against it, many team leaders still start adding buyer’s agents before they have their core business systems in place.
But you can’t expect your rainmakers to be admin whizzes. That’s why it’s so crucial to get your real estate systems running like a Swiss clock first. Then, when your high-octane agents finally do come on board, they can simply plug in and keep moving—without getting bogged down by clunky workflows.
If you haven’t found time to get your house in order, knock out two key steps in one go by hiring your admin first.
Agents who consistently close upwards of 30 deals a year should have no trouble affording full-time admin help. But if you’re drowning in paperwork and convinced you’ll have the transactions in the near future, there are some flexible (and affordable) remote options as well, including MyOutDesk and Real Estate Assistant.
[ADD QUOTE IMAGE: “When you find yourself too busy to grow your business (i.e. doing your own searches), that is when you know it is time to expand and build a killer real estate team.” – Darell Handler, Handler Real Estate Services]
Now that you’ve got the paperwork off your plate and your systems are raring to go, you’re ready to offload some of these leads to an ace buyer specialist.
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This buyer agent’s top priority is to make sure no lead slips through the cracks. You’ll want to provide them with a ready-made, rock-solid lead cultivation strategy and be ready to hold them accountable for database maintenance and follow ups.
Your buyer agent should be able to handle a max of 4 transactions per month. When it looks like you might exceed that number (do a little dance), then get ready to bring on your second agent or ISA.
Example of a high-performance team structure, from Ben Kinney’s Real Estate Team of the Future.
Inside Sales Agent
Once you’ve got your dedicated buyer agent, you’re free to get out there and generate a ton more listings. But get ready, things are going to get busy on both sides—fast. At this point, your team will be extremely tempted to focus solely on the hot leads and short-term deals.
That’s why this is the perfect time to bring in your first inside sales agent, or ISA.
A great ISA can double your GCI simply by taking over the tasks agents don’t want to do, namely: Making phone calls.
Making, tracking, and measuring calls (and texts and emails) is easy with Follow-Up Boss.
Mitch Ribak (a.k.a. The Grandfather of Lead Conversion) is the founder of InsideSalesAgents.com and broker owner at Tropical Realty Beachside in Melbourne, FL. Mitch has leveraged the power of ISAs to achieve $127 million in annual transaction volume and increase conversion rates by 450%.
But be warned: Fast, consistent follow up WILL bring in more leads—and more contracts. You, your systems, and your agents need to be ready to hit the ground running.
As the team owner, it’s on you to make sure you’ve always got the right number of listings.
You need to keep your team busy year-round, while proving you’ve got what it takes to consistently uplevel transactions month after month.
When you’ve reached the peak for the number of listings you can handle yourself (e.g., if you’re generating seller leads from the hotel business center on your family “vacation.”), it’s time to hire help in the form of either a listings agent/specialist or transaction coordinator.
You can also opt to hire or outsource to a third-party transaction coordinator. If you opt to outsource, expect to see a fee range of $300-$700 per transaction, which is still totally doable for most teams.
Each time you hit a new revenue goal, it’s time to evaluate your team and consider bringing on more help.
There’s a number of ways you can grow your team, including adding a marketing director, showing assistants, or even a personal assistant to help you with that ever elusive work/life balance. Point is, designing your real estate team structure will depend entirely on your goals for your life and your business.
One of the most widely recommended resources on the subject is without a doubt Gary Keller’s bestseller, The Millionaire Real Estate Agent. Even agents who aren’t fans of the KW model confess to loving and profiting from the lessons in this book. What readers love most is that the teachings can be applied to teams of all sizes.
But if you just want some quick-action Cliff’s notes, check out Lori Ballen’s personal story of how she built her own rockstar real estate team using the MREA model.
Step 3: Understand Your Real Estate Team Inside and Out
When you’re moving at 100 mph from appointment to appointment, it can be incredibly tempting to hire the first set of hands that comes along. But beware—bad hires cost time and money.
When Chicago broker Jake Tasharski set out to hire his first rainmaker, he knew culture and personality would be the priority. He wanted someone he could trust to represent his brand and emulate the experience his clients have with him.
And he made sure he had a rock-solid plan for onboarding. Jake brought on his first agent, Sarah Troy, during the offseason and had her shadow him every day for the first couple of months on the job. By the time the busy season rolled around, Sarah was able to completely cover Jake’s rental business and assist with showings.
And the best part is, they mesh well. 😊
[ADD IMAGE QUOTE: “I had the systems in place to mold the necessary skill set and market knowledge, but personality is something you just can’t teach.” – Jake Tasharski, Center Coast Realty]
Start with Yourself
Creating a great team is a lot like putting together a puzzle. Each team member will have strengths and weaknesses, and you want to ensure that those characteristics balance each other out.
And, as Lee Adkins (former real estate agent, now Head of Growth at Amplified Solutions) points out, “You can’t hire to your weaknesses or find the holes in the system if you’re not honest about the things you’re not good at…It’s a really delicate balance of finding the right team agents to join because you don’t want another you.”
Yes, you need to know who you’re hiring. But you need to be completely honest about what your own strengths and weaknesses are first.
Then, Get to Know Your Team Members (with a Little Help from Personality Assessments)
Most agents agree great team dynamics are crucial, but not everyone goes the extra mile to figure out exactly how their team ticks. Understanding personality traits and preferences can help you better assess the compatibility of a potential new hire, and work more effectively with the team you already have.
A personality assessment tool should never be the deciding factor for who you hire, but it can provide a framework to help you understand the various personality types of current or future team members.
Here’s a quick rundown of the leading personality assessment tools to help you choose the one that’s right for you.
This four-trait personality assessment is by far the most widely used team building tool in the real estate industry (and with over one million people using it every year, it might be the most popular, period).
DiSC’s biggest strength is its simplicity. Each team member is asked to rate their own propensity toward each of the following characteristics:
Dominance (D): Direct, strong-willed and forceful
Influence (i): Sociable, talkative and lively
Steadiness (S): Gentle, accommodating and soft-hearted
Conscientiousness (C): Private, analytical and logical
Based on their DiSC profile, team members and leaders can determine the best way to interact with each other.
For example, a high D will be most motivated when you exhibit your passion about a goal or target. Whereas someone with a high C will want the nuts and bolts on how and why that goal was created. Of course, it’s possible for someone to be high on both D and C, and for those team members, you’ll want to appeal to both their desire for enthusiasm and their love of details.
[ADD IMAGE - DISC ASSESSMENT]
Myers-Briggs Type Indicator (MBTI)
The Myers-Briggs Type Indicator (MBTI) is also widely used and respected. The main difference is that DiSC assesses how people behave externally, whereas the MBTI is more geared toward the internal, such as how people think, feel and make decisions.
MBTI is more involved than DiSC, with 16 personality types, each described using four letters:
Extraversion (E) or Introversion (I) – Extraverted types learn best by talking and interacting with others. Introverted types prefer quiet reflection and privacy.
Sensing (S) or Intuition (I) – Sensing types enjoy a learning environment where the material is presented in a detailed, sequential manner. Intuitive types prefer a learning atmosphere where an emphasis is placed on meaning and associations.
Thinking (T) or Feeling (F) – Thinking types desire objective truth and logical principles and are natural at deductive reasoning. Feeling types place an emphasis on issues and causes that can be personalized while they consider other people’s motives.
Judging (J) or Perceiving (P) – Judging types will thrive when information is organized and structured, and they will be motivated to complete assignments in order to gain closure. Perceiving types will flourish in a flexible learning environment in which they are stimulated by new and exciting ideas.
MBTI is great if you want to understand the finer details about how a team member will approach day-to-day challenges related to workflow, problem solving, decision making, and dealing with stress.
[ADD IMAGE - MYERS BRIGGS]
Larry Kendall’s Four Characteristics
Ninja Selling-author and real estate guru Larry Kendall says that rather than managing agents, you want to “sail with them.” He’s categorized four types of agents based on selling and performance characteristics.
Category 1 – Productive and Coachable. All you have to do is give these agents a general direction, they’re highly motivated and can take any task and run with it.
Category 2 – Productive and Uncoachable. These guys can be very successful but you have to sail alongside them, they don’t like to be told what to do.
Category 3 – Unproductive and Coachable. These agents are coachable, but they’re stuck in a rut. They need small, manageable activities and action steps (NOT giant goals and outcomes) to get them back in the game.
Category 4 – Unproductive and Uncoachable. There are approximately 600,000 of these types of agents in the real estate industry. These guys won’t be your rockstars, but they’d do fine in a brokerage with low fees and low expectations.
Larry’s approach is a great, broad-brush assessment for quickly identifying potential candidates and gauging the temperature of your team.
Again, be careful not to rush to judgment. Sometimes agents can be labelled a Category 4 when the real problem is no one has given them the right kind of coaching or tools to help them raise their game.
[ADD IMAGE - FOUR CHARACTERISTICS]
What to Do About the “Me” Person on the Team
Let’s face it: There are some BIG personalities in real estate. And while that’s definitely not a bad thing, it can make it hard to separate your ambitious Category 1 agents from your self-absorbed bad apples.
“One of the biggest mistakes is picking agents who want their name in the spotlight. Typically teams are formed when one or two rainmakers come together. The team members added to the group are typically newer in the business and are just starting to cut their teeth. As an individual you are able to promote ‘YOU’. As a member of a team, personal promotion takes a back seat,” says Bill Gassett of RE/MAX Executive Realty.
When you hire each member of the team, be clear about what it means to be on a team. Avoid fighting for the spotlight by having a system in place to make sure your star performers get the recognition they deserve and that they have plenty opportunities to advance their careers in the future.
Step 4: Use Your Intuition
With over 20 years in the game, Kyle Alfriend knows a thing or two about hiring a team. The Dublin, Ohio Realtor uses the slogan, “Independently Unified” to remind team members of the importance of being both self-motivated and tuned into the bigger picture, a trait he says is difficult to measure in tests.
But he’s also made some mistakes in the past. That’s why Kyle now takes his time with hiring. Here’s what his hiring process looks like:
- First, his staff conducts an initial phone screening.
- Next is an interview which incorporates some Myers-Briggs testing. The main focus of this step is weeding out the bad candidates—not finding the good ones.
- Finally, the candidate gets to Kyle. “The more ‘out of the box’ I want them, which is marketing and sales, the more I follow my gut. However, on the more procedural or compliance-related jobs, like closing coordinators or processors, the more I allow the questionnaires and personality tests to decide,” Kyle explains.
Ultimately, regardless of the position, Kyle always makes the final call based on gut feel.
[ADD QUOTE IMAGE: “Personally, I go on intuition. I see our success as being based on our uniqueness, a different approach to every aspect of the business, so I am not looking for people that fit the standard molds.” — Kyle Alfriend, Alfriend Real Estate Group]
Step 5: Create a Real Estate Team Structure That Works
Having the right people on your team is of critical importance. But how do you position them within the team? Not only do you need to find the right organizational structure, you need to define the right compensation model as well.
Real Estate Team Models
There are a number of ways to structure your real estate team. Your experience, preferences, and goals will determine which real estate team model works best for you. Here are three of the top options to consider according to top producing agent Sean Moudry:
- Mentor / Mentee Model: You recruit team members and train them to be successful. After a period of time, they transition out of “mentee” status and move into your downline or take on mentees of their own. *This model is great for those who like to teach and want to generate passive income through their downline.
- Team Lead Model: This traditional real estate team model centers on the personal brand of the team leader. *This model is great for agents who have an established personal brand and/or a strong vision for building one.
- Lead Team Model: Rather than centering on the leader, this model focuses on generating inbound leads. While the costs may be higher, there’s no limit on your growth. *This model relies on successful lead generation systems and marketing, so if that excites you, it’s probably the best one for you.
The amount of support you provide your team members, as well as the expectations you have for them, will play into how you compensate them.
[ADD QUOTE IMAGE: “The plan will always get better—as long as you have one.” – Lee Adkins, Head of Growth, Amplified Solutions]
Get the Math Right from the Start
Bernice Ross, CEO of RealEstateCoach.com, is one of Inman’s top 25 best real estate coaches and has over 30 years experience selling real estate. “Many agent teams are undercapitalized,” she says. “A primary reason is that they pay other agents at the full rate rather than their split AFTER expenses.”
“As a rule of thumb, if you’re running an efficient team, your expenses will run 15%,” she explains.
If you’re going to put in the time and energy required to build an awesome real estate team, make sure you get the math right from the very beginning. (The last thing you want is to look up one day and realize you’re a business owner who makes $10 per hour.)
Step 6: Fire Fast
Advice to “fire fast” is a veritable leadership mantra within the real estate community, yet many broker agents still wait far too long to fire the bad apples.
“If someone is not working out or not working well with the team, let them go. One or two bad people can be toxic and ruin the morale for the entire team. The sooner you let them go, the better off the team will be even if they sell a lot of houses,” says Mark Ferguson, owner at Invest Four More
Next to lead generation, your biggest job as a leader is to protect your team’s focus. It’s hard—especially the first time—but you’ve got to root out the bad seeds before they can spread their negativity onto the rest of the team.
And remember, the best thing you can do is not hire the wrong person in the first place.
A Word of Caution
Hire the right people, fire the wrong ones—it’s not complicated. But sometimes “right” and “wrong” are not that clear cut. Nat Ferguson, president and broker of Ferguson Realty, believes this is why it’s so key to understand whether an individual has the drive and enthusiasm to learn and succeed.
“Those agents tend to fall through the cracks in a big-box brokerage,” he says. “They know enough… they just need hands-on training and they need a set of tools that they’ll actually use.”
Before you let someone go, make sure you’ve held up your end of the bargain by giving them the tools and support they need to succeed as a member of your team.
Step 7: Lead with Why
Mega agents like Steve Harney and Dave Liniger say it all the time: You’ve got to lead with “why.”
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But why is “why” so important?
According to real estate training and wholesaling boss Kent Clothier, your team is there to grow your business and help your clients while taking the pressure off of you, the entrepreneur. Having to micromanage defeats the purpose.
Kent says, “In my experience, the keys to this are certainly to hire the right people and to have the right systems in place. However, none of it matters if your team is not filled with purpose-driven people that clearly understand why they are a part of your organization and feel compelled to help you and your organization to do more.”
Once you know your employees’ personalities and productivity styles, you’ll know a lot about what motivates them. Align their personal drivers with the overall mission of the business, and you’ll succeed in keeping them switched on and ready to work each day.
“The best teams are bound by common belief systems, values, and purpose,” says Kent.
A simple, visual leaderboard can help steer your team away from bad behavior and keep them focused on reaching their goals.
As the CEO of Labcoat Agents, and KW Realtor with over 14 years experience leading top-performing teams, Tristan Ahumada is a name you’ve probably heard before. Running multiple businesses and speaking at real estate events all over the world can definitely keep a guy busy.
So how does he keep his team motivated when he’s always on the go?
The morning call.
According to Tristan, this the #1 most consistent action he takes to keep his team engaged. Almost every morning at 8:30 am, Tristan and his team huddle together by phone. He chooses a topic to discuss, asks the team questions, and sometimes collects their feedback as well.
“I use that time to connect and motivate. The morning call has brought my team closer together and has elevated our culture,” says Tristan.
And how you end the call is important. Take it from another high-octane agent with over a decade in the biz. Barry Jenkins ends his morning calls with the following sign off:
“As you drive to your appointments today, you’re going to see people unhappy and limited by their current employment. You have the opportunity to be different. The sky is the limit with your career path. Be grateful for your current employment and go crush it today!”
Sparking a killer combo of gratitude and grit is the best way to keep your employees motivated—even before they’ve had their morning coffee!
Step 8: Don’t Forget the Little Things
One of the most common mistakes when you start to grow is overlooking the little things that fueled your growth in the first place.
Joe Arsenio, broker associate at California-based The 82 Group, was facing an extreme increase in volume when he decided to grow their team.
“When I reached 20 escrows and maintained being between 20-30 escrows at all times for a couple of weeks, I knew it was time to bring on more team members. My partner agents were in the same boat as well. We were all getting more acceptances than we were closing and yet the leads kept flowing in at an increasing rate. We needed to hire more agents to make sure we did not slip up on our top notch service.”
Joe and his team hired more showing agents, internal customer service representatives, and transaction coordinators to make sure they were able to uphold excellent service, all the way through.
According to Joe, the #1 most important “little thing” is quick communication. Whether it’s a response to a first time inquiry, or managing the escrow process, Joe and his teams aim to respond to all inquiries within one hour, if not immediately—even if it’s just to acknowledge the issue and let the buyer know it’s being addressed. “Being organized and responsive means the world to a buyer,” he says.
“We’ve found that the ‘little things’ are often the most important aspects to our clients and these ‘little things’ are also what sticks in their minds after the transaction is closed, leading to referrals and great reviews,” he explains.
Follow Up Boss makes quick communication even quicker with templates for texting and email, so you can keep your finger on the pulse of your customer relationships.
Train Your Team to Go Above and Beyond
Joe and his team always over-communicate.
“Go above and beyond when answering a question. Be proactive with your responses so that your client does not have to figure out the right questions to ask. More details and information will make your client feel comfortable that you’ve got their back,” he recommends.
Joe also advises agents and their teams to drop the jargon. Clients don’t understand the real estate process—that’s why they hired you. He encourages his teams to speak to clients and prospects like they would speak to a friend: “Tone down the sales pitch and turn up the humanity. The goal is for the client to feel comfortable and happy at the end of the transaction.”
Step 9: Don’t Beat Yourself Up
“Hiring right is not easy, and you have to have perseverance to go through the cycle of hiring and training more than once until you get settled with the right group of people. Oh, and you will almost never hire someone that is as motivated or driven as you,” says Sep Niakan of HB Roswell Realty.
Of course, everyone wants to get it right the first time, but some lessons just take longer to learn. And leadership might be the hardest, most valuable lesson of them all.
Sep is the #1 listing broker in the Greater Downtown Miami area and he’s the founder of CondoBlackBook.com, Miami’s most comprehensive condo-only real estate search.
So yeah, he’s been around the block a few times and knows what too many agents are quick to forget:
Leadership is a lifelong process.
Take a page from Sep’s book and make peace with the fact that this will be a long (and sometimes painful) process. When you step into it the first time, you will probably fail. Don’t get down on yourself or let yourself get distracted by the fact that nobody’s as dedicated as you are.
You are the leader for a reason.
Accept right now that you will have your fair share of bad hires and experiences along the way. But that’s what makes you better, and sometimes, that’s also what makes it fun.
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The only remaining question is: Are you ready?
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