Boston Real Estate Investors Association

New to Real Estate? Should You Join a Team?

So team or not to team.

I think a team is a GREAT idea for a new agent. There is a reason why 87% of all newly licensed agents are out of the business within 2 years. We will touch more on that in a couple of moments.

However a team offers a newly licensed agent a steroid shot and drastically increases their chances of making it in the industry. And for the record. This industry is cutthroat. It is one of the most difficult out there. I know the HGTVs of the world make it look easy… But again. There is a reason that 87% of all agents end up leaving within two years!

Yes. A team is a good idea. But only if it is the right team.

I mentioned a team leader who has a team to serve them a couple of moments ago. If this is the team you are looking at, then walk away and find a better team.

Like the Berenstain Bears beds, there are many different styles of teams. Some are really big. We call these Mega teams. Then you have what I would call normal-size teams. And then you have the smaller husband and wife size teams.

And all of them offer a different value proposition and can have some additional negatives. For example, a Mega team will most likely offer an agent more resources. Accountability will be a major thing as these mega teams are keeping track of all the KPIs, Key Performance Indicators. They will track how many calls you make, how many conversations you have. What the conversation-to-appointment ratio is. Then the appointment to contract signed ratio. You name it. They track it all. And they have to. Because they invest so much money every single month to ensure that the wheel keeps moving. They will also charge the buyer agent more. But if you want more leads, more training, more accountability, and possibly a bigger chance of success, then this is a great bet for you.

Then there is the husband and wife, mom and pop style team. There can be some big advantages to these team structures, but also some disadvantages. For the person wanting some resources, but maybe not wanting all of the accountability, then this could be a great option! But let’s dig into this a little deeper.

These teams aren’t holding their one or two agents accountable because they are not investing that much or even any into you and your business. Oftentimes the leads that these agents are receiving are the breadcrumbs of the team owners. The leads that they don’t want to work or the open houses that they don’t want to host.

I know this because this is where my team first originated out of. It’s how most teams first originate. My business was getting too big for me personally to handle. So I stopped working on all leads below $300,000. Then it became $350,000 and then it became a certain geographical area. Rather than throw away these leads and get nothing for them, I gave them to a buyer agent and did some wishing and praying. Anything converted was considered a little bonus.

In this situation the training isn’t great. There are leads, but they are the bottom feeder leads. But the splits are ultimately better!

Then there is the in between. The 10 or so person team that has a lot of the same resources. Has a bunch of accountability and is run with the agent and their success in mind. Ultimately at this level, the team leader has stepped out of production. They need their agents to be successful in order to pay their bills! These team structures ultimately feel a lot less like a machine and a close community. I find that it’s these size teams that generally have the best culture.

Without a doubt, a team will provide a new agent the best chances of success and drastically reduce the chances that the new agent becomes part of that 87% statistic.

So what is it that an agent is giving up in order to be on a team? A percentage of the commission.

On some teams that could be 30, 40, 50. I have even seen teams at 60 to 70 percent for in house leads that an inside sales associate nurtured.

It seems like a lot. I get it. But keep in mind that an agent on one of these teams has little to no monthly expenses.

People think that these teams slaughter it. But consider this. The best and most finely run mega teams will have a profit margin that tops out at 20 percent. If that team has a margin of 15%, then they are doing pretty well… And that’s before Uncle Sam comes knocking.

So what does that mean? Let’s say it’s a $10,000 commission after paying the brokerage as well as any ancillary fees. And let’s say it’s a 50/50 split. Agent gets $5,000 of pretty much profit while the team gets $5,000 of revenue. Of that $5,000, the team will reinvest $4,000 into their business in the tune of new leads, office support, maybe an inside sales associate department while $1,000 is their top of the line profit.

These bigger teams are built solely to get agents to be more productive and get a return on their invested capital.

Can you succeed as a new and solo agent? Absolutely! Will it be more difficult? 100%. Leads are harder to come by. Training is more important than ever in this rapidly changing industry. And for most, the freedom is enough where we hang ourselves so the accountability is what keeps us focused and in the game.

If you are newly licensed and think a team would be a right fit for you, then let me know. Happy to pass along some team recommendations for you.

And if you are looking for a company where you will be able to learn and grow, then I would love to chat with you about the opportunities over here at Real Broker.

Again, it’s Jeff Chubb. You can reach me at 617-775-7687 and all my other contact information is below.

Until next time!

#Real #Estate #Join #Team
Jeffrey Chubb
2024-04-22 14:52:16

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