Making the right decisions and having a solid strategy to start or grow your team are paramount to success, while making the wrong choices can be extremely costly.
Fortunately and unfortunately, there is no one-size-fits-all approach to starting or developing a real estate team. You need to be careful how you set up your team—some coaches and brokers can help you navigate the process with guidelines and steps, which could save you lot of time and money; however, making decisions too quickly and/or choosing the wrong people and path can be extremely costly, both in lost business and in wasted expense and time.
Make sure you have a business strategist to help you, and be sure to avoid these major mistakes:
1. Starting a Team Too Soon
So many teams start before they should and end up struggling or not making it. Having a team means providing direction to others to ensure their success, and having a plan to scale your (preferably already profitable) business. So often, agents start a team too soon and hire for the wrong reasons. Adding people to your team without first having a profitable business is highly discouraged. You need to have a high enough listing inventory and leads to support adding a team member or partner. Take the time to make sure you are already turning a profit and have systems in place.
2. Not Increasing Sales Production
If two agents join together and don’t end up selling more, why do it? I tell agents all the time, “If you and another person team up and you don’t substantially increase your sales production, this didn’t work.” If a partner team, then together, you should have combined sales that double or triple what you each did alone to make it worth doing. (Nothing like splitting your commissions and making less than when you were a single agent.) Everyone should be performing at high levels, both converting leads from your lead gen system and by bringing in new business to the team.
3. Starting a Team Without a Written Plan
Hope is not a plan, and winging it is not a good business strategy—nor is trying to create the plan after you have already started the team. Adding people to your team without having a roadmap of where you are going and how you are getting there will end up causing you lots of stress, and derail you from growing your business. It will also end up costing you lots of money and lost time, and you cannot afford to experience lost time while you are cleaning up a failed partner or team member mess. Having a written plan for what you can expect from each team member—and knowing you have a strategy that you are executing on purpose before you start—will make it easy for you to hire with clear expectation, instead of talking in lofty terms with no direction. Agents who join your team want and need direction and understanding of what goals to strive for, and how to accomplish them.
4. Hiring the Wrong People
It is really hard to resist the urge to hire someone you haven’t completely vetted when you are extremely excited about starting your team. Again, agents jump into situations, and hiring the wrong person can cost you reputation, money, lost time, business, stress and emotional anguish. Agents always think they are going into an arrangement with the best of intentions, but the reality is, I have never heard anyone tell me they were sorry they waited to hired someone on their team, but they regretted hiring someone too soon. Making sure you have the right team member is so important. How well do they prospect new business? Close deals? Solve problems? Handle adversity? Communicate? What is their work ethic and mindset? These are all key factors to whether this person is the right match and whether they will make it on your team or as a partner. Too often, agents find out the answers to these after it is too late.
5. Not Having a Written Agreement in Place
Too often arrangements happen and the team leader doesn’t solidify the terms of the working arrangement on paper in an agreement. Having a written team member or partner agreement can help spell out all possible scenarios between commissions paid, expenses shared or contributed, what expectations are on lead conversion and what expectations are of the working relationship in general. Having all details in writing helps to clearly state the agreed-upon terms of the relationship, including covering what happens if a team member exits or terminates their relationship with the team.
6. 3 Major Offenders of Partner Teams
After years of helping agents partner and divorce and split apart, I have seen these common issues in team partnership arrangements—issues that wear on the agents, and eventually end up causing so much resentment that they part ways.
Usually, they start out thinking, “This is great. I like buyers and my partner likes listings. We can complement each other and cover both, making both of our lives easier in this job of real estate.” At the beginning of the relationship, it seems like a great idea to “partner,” and, without doing a test run, everyone is excited and starts marketing as a team. Over time—usually not too much time—these three offenders start to creep in and create major issues and unresolvable conflict. They are usually unforeseeable, because everyone has their rose-colored glasses on.
One of the two on the partner team feels like they are:
- Bringing in more of the lion’s share of the business
- Spending more money on marketing expenses and tools
- Feel they are working more hours
These are three main offenders that create unresolved issues that end up breaking the team apart. This is why I strongly suggest having a trial period for a few months before embarking on a team partnership, especially if one of you is already doing substantially more business to start.
Avoiding these pitfalls will save you hours of frustration. Put together a growth plan to start a team, taking the proper time to truly consider the team members. The time you invest in doing it right the first time will be invaluable to you in the long run. Be intentional, and take the time to try out a potential team members or partners for three months before adding them to the team.
For more information on strategies to start or grow an already successful real estate team, Sherri Johnson offers world-class, exclusive agent and team coaching. To speak with Sherri about how your team can double or triple production quickly, or to learn about her custom and co-branded training platform, Sherri Johnson Academy, schedule a free strategy call, click here.
Sherri Johnson is CEO and founder of Sherri Johnson Coaching & Consulting. With 25 years of experience in real estate as an agent, broker and executive, Johnson now offers her proven methods through coaching, consulting and keynote speaking services nationwide. She is a national speaker for the Homes.com Secrets of Top Selling Agents tour and is the Official Real Estate Coach for McKissock Learning and Real Estate Express. Johnson has also been named an RISMedia Real Estate Newsmaker in 2020 and 2021 as an Industry Influencer and Thought Leader. Schedule a free 30-minute coaching strategy session or visit www.sherrijohnson.com for more information.