Real estate agents are often attracted to the idea of forming a team so they can share costs, build their careers, network and create a better work-life balance.
The majority of real estate brokers have benefited from the team structure, with 80 percent of them saying in a recent survey by marketing firm Imprev saying they believe teams have helped to grow their business in the last five years.
But the team structure is also creating a paradox of sorts. Some 76 percent of team leaders say that teams have led to a higher sales volume within their brokerage, while 96 percent say they have more than one team set up. However, 45 percent of brokerages have in excess of six teams, and find that profitability per agent is reduced with the more teams they have. Some two-thirds of brokers said teams also cut into their profits due to higher commission splits and their greater use of office space and resources.
“We knew teams were making a powerful impact on real estate,” said Renwick Congdon, CEO of Imprev. “There are many fantastic studies out there covering the inner workings of teams, but we felt there was a need to understand teams from leadership’s perspective. This study shows that the effects are more double-edged than we anticipated.”
Even so, brokers are racing full-speed ahead in their embrace of the team spirit. In the survey brokers were asked to answer the question “does your brokerage fear or embrace teams?” on a scale of 1 to 100, with 1 meaning they fully fear teams and 100 meaning they fully embrace the idea. The average score was 73, which is “a surprising turn in sentiment over the past five years,” Imprev said in its conclusions.
Congdon said that based on the feedback from the survey, the key to building success is to put comprehensive policies and frameworks in place that can “ensure team leaders and brokers build strong, mutually beneficial relationships.”
Another finding from the study suggests that brokerage guidelines and technology could be better used to support teams of agents. The brokers listed their desires for team improvement, with 78 percent saying they would like to “create guidelines and team models to assist new teams, and another 71 percent saying they wish to “provide technology that can support both teams and individual agents.”