Should you be an independent agent or a member of a team?
The team concept is prevalent in real estate and you will see it in a variety of settings.
Some teams are formed like a partnership where the agents share the work load, expenses and split the profits. Often they will work to create an independent brand or identity from the broker by having a team name and or logo. State law will still dictate how they must display the Brokers name but the teams create their own identity. Before just deciding to work together you should consider the issues and challenge yourself to answer the hard questions.
- What does each member bring to the team? A team is stronger if each party brings some diverse skill. Does one prefer buyers and the other sellers? Or one prefer back office paperwork and the other is more outgoing and can make contact with clients.
- What are the duties of each team member? Who will be providing what functions?
- Have you thought about how you are going to split expenses and profits? What if the work load isn’t equal? The team member who works with buyers will be investing more time and energy then the listing partner. Will that create a problem later on?
- Are you doing this to build the team for the long term or as a way to start your careers? Do you each have the same goals, short term and long term?
- If the goal is to build a long term brand and team identity do you agree on what that brand should stand for and what markets you are going to focus on?
Experienced agents who are growing and mega agents who dominate their markets will also have teams. But these will be much different then the above. The first example is really a partnership with you as one of the partners. When working for an established agent you are working for another agent supporting their business. You are more like an employee then a partner. The role of the experienced agent is to be the rain maker who generates the business. They will manage the support structure and possibly handle certain aspects of the transaction, like the offer, negotiations, listing appointments, etc.
As a team member:
- You may get a base salary plus commissions.
- Most likely you will have a specialty, like listing coordinator, buyer’s agent or marketing specialist.
- As listing coordinator you manage all aspects of supporting the listing, while the agent would be the one who got the listing.
- As their buyer specialist they will funnel their buyers to you. Buyers tend to take more time then sellers so this is a function they will count on.
- Marketing specialist mostly provide support functions which can range from stuffing envelopes, handling the database, getting ads ready to print, to taking prospect calls.
New agents often think of joining a team for a variety of reasons:
- As a way to gain experience and training before going out on their own; they view this as more hands on training.
- They can see how the real world works and gain confidence.
- They aren’t sure about how they will tackle a real estate career or get clients and being on a team has fewer hurdles.
- They are unsure of their skills and abilities to be generating business on their own.
- They can’t financially afford to just be on their own. They either need a minimum salary that they can count on they don’t have the funds to cover the expenses of growing their own business.
There is no problem working on a team as long as you are doing it for the right reasons. When I interview agents here is the advice I give:
- Is your long term goal to be an independent agent working and building your own business? Do you have the skills to market yourself and work independently? If so then being on a team will only delay that. The hardest part of real estate is building a business and getting clients. When you are on a team you are building someone else’s business. All of the clients you work with are their clients. If you ultimately want to be independent you would be better off starting on your own and building your business from the beginning. If you aren’t sure of your long term goal, then being on a team isn’t a bad idea in the interim.
- Are you joining the team to get training and mentoring from an experienced agent? If you know you want to be independent and are only looking for this hands on training then a team is the wrong approach. For the same reason as above, you need to be building your own business. If training is a problem then find the right broker who can give you the training you deserve and need. You are giving up too much to get the training that you can find elsewhere. Simply stated, this is very expensive training.
- If you don’t have experience networking, marketing yourself and you have few personal contacts then being on a team may be a good thing.
- If you prefer to just do the work of real estate and not be worried about or responsible for generating the business or managing the entire process, being on a team is also a good idea.
- The team may be paying a base salary and you need the income. But if the long term goal is to be an independent agent then you should just find a job somewhere that pays about the same or more than the salary. Take the time you have to start building your real estate career. The typical team pay is between $8 to $15 an hour. Can you find another job that will pay that much and at the same time you can work on your own transactions. You will likely have a higher split from your own deals so the other job plus own deals may net you more than being on a team anyway.
The main criterion is your desire and ability to be on your own in the long term. If this is your goal don’t delay because you need to be building your career from the very beginning.