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It’s the responsibility of the team leader to provide stability and security for the team members they lead. This can only be accomplished by understanding that the role of the team leader is to be financially savvy, and to focus on the two most important things a leader can do: No. 1 business development and No. 2 people development.
If the right care and focus are on these two things, your team will thrive regardless of what is going on in the market.
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When structuring a team, the first step is to clearly define roles and goals. Each team member should know their responsibilities and targets to ensure efficiency and productivity. This clarity not only helps in daily operations but also in setting a solid foundation for growth.
Additionally, one critical aspect of team building, perhaps the most critical, is determining the commission structure. It’s vital to design a system that ensures profitability while also motivating your team members. A well-thought-out commission plan can drive performance and satisfaction among your agents.
Understanding that the leader’s role is to create stability and security for their team members, that can only be accomplished with profitability. The rule of thumb we use is that a team should be at a 50 percent gross profit after the cost of sale.
Net profits range between 22 percent and 35 percent depending on the contribution to the company dollar from the team leader. That means that a listing partner on a 50 percent split, where the team pays all the marketing, lead generation and transaction processing, is being overpaid in this model because it’s impossible for the leader to be profitable after paying all the expenses. We suggest 30 percent to 35 percent to listing partners, 40 percent to 50 percent for buyers agents — starting on the lower end, and with new sales each month, it can graduate to 50 percent.
Don’t stress about underpaying people; they don’t appreciate all you do when everything is given without any accountability for them to produce. We also set minimum expectations using a 10 Things to Be on My Team document. It covers a few things such as daily huddles, 61 points a day doing dollar-productive activities, adhering to the core values, and selling a minimum of two homes a year.
When expectations are set up front, there is no confusion when the time comes for conflict. You simply go over your agreement.
Establishing core values
Core values are the backbone of your team culture. They guide behavior, decision-making, and interactions both within the team and with clients. Make sure everyone understands and embodies these values to create a cohesive and supportive work environment. In fact, establishing your brokerage’s core values should be integrated into your training and ongoing agent development.
Our values are as follows:
- Choose to be happy
- Communicate openly and honestly
- Have and share vision
- Integrity always
- Live with passion
- Live freely
- Show gratitude
- Persist until we succeed
We hire and fire to these core values and they are critical to our success as a coaching organization. A great team in Calabasas, California, Dana Olmes and Jeff Biebock, have simplified their core values in “The 4 Backs”: “We have our clients’ backs, our families’ backs, our communities’ backs, and each other’s backs.”
Training and development
Investing in training and development is essential for keeping your team at the top of their game. Implement established onboarding programs, offer continuous education and set up accountability systems. Training ensures your team members are well-prepared and confident in their roles.
You can do this by leveraging the right tools and technology that can streamline your operations and enhance productivity. From CRM systems to AI-driven solutions, technology can help manage tasks efficiently and provide better insights into your business operations.
It’s easy to plug into continuing education to keep your license active, but that is not the training I’m talking about here. I’m talking about sales training, how to develop long lasting relationship training, lead generation and follow-up training, and market knowledge training.
We have an opportunity to separate ourselves from the pack of average agents by becoming true professionals and elevating our real estate games. It all begins with great training and coaching.
Implement systems and processes
Anything we do three or more times in our businesses should follow a system. Creating scale and growing with ease is determined by how great our systems are and how vigilant we are at implementing and following these systems.
A simple example is lead follow-up. As a team, we follow a simple system called the ABCs of Lead Conversion. It works like this: As a team we identify every opportunity as either an “A”, “B” or “C” lead. As are buyers or sellers who will transact in the next 30 days, and we have a scheduled appointment with them. When we ask any team member how many A leads they have, if the answer is three, then they should have three set appointments.
B leads are 30-90 days out, and we call them twice a month during the week the first of the month falls and the week of the 15th. Cs are more than 90 days out, and they receive a specific call during the week of the 22nd. Our SOIs get called the week of the 22nd.
This simple lead follow-up system ensures that every lead is touched systematically and nobody falls through the cracks. This is one of many systems that should be automated and followed by every team member.
Legal and ethical considerations
Always operate with legal and ethical considerations in mind. Consult with legal experts to ensure compliance with real estate laws and regulations in your area. This proactive approach will help you avoid potential legal issues down the road. It’s critically important not to overlook this, regardless of the type of team structure present in your brokerage.
We don’t cross lines or do fuzzy math just to get a deal done. If in doubt, err on the side of what is the best thing for your client. And always do the right thing.
Types of teams and organizational charts
To illustrate different team structures, here’s a quick overview of some organizational charts:
- Simple teams: Start with a team leader who may also act as the listing partner and a buyer’s agent. As the team grows, new roles like client care coordinator and runners are added quickly in most simple teams.
- Complex teams: These include positions such as CEO, COO, VP of Sales, buyer’s specialists, listing specialists, showing assistants, and more. Each role has specific responsibilities and contributes to the overall success of the team.
- Outsourced teams: Utilize external resources for specific tasks like marketing, lead generation, and administrative support, and transaction processing. A single agent can have high production with the right team of outsourced members, including showing assistants and referral agents who handle business when the leader is busy.
- Mega teams: These are highly structured with multiple layers of management and specialized roles, catering to large-scale operations.
The bottom line
Nobody should tell anyone else what kind of team they should run or own. If what you are doing isn’t working or you are not profitable, or you are working more not less because your team is dysfunctional then there is help. Hire a coach, someone who sees your business from a different perspective and has a proven track record of helping high performing teams.
Building a real estate team tailored to your lifestyle, the improved lifestyle of your team members, and hitting high business goals is the ultimate objective. Clearly define roles and goals just beyond your ability to reach them, establish a profitable commission structure, and invest in training, coaching, and technology. By following these guidelines, you’ll create a high-performing team ready to take your business to the next level.
The right team structure can make all the difference in achieving your business goals as well as living a great life. I firmly believe that no other success can compensate for failure in the home. When you do things correctly you truly can have it all!
Verl Workman is founder and CEO of Workman Success Systems. Connect with him on LinkedIn or Instagram.
