Learn more about real estate teams, how they work, and whether you should work with one.
The Basics of a Real Estate Team
A real estate team is a group of real estate agents who work together and share commissions. Rather than working with one real estate agent, you’d work with the team as a whole. There are no set procedures that all real estate teams must follow, but team members almost invariably pitch in for each other and share the team spirit. A client can contact any other team member for assistance if one particular agent isn’t available. Someone is always there, even if the client has been assigned to the care of a particular agent. One agent might be in charge of handling buyer phone calls on listings, while another might escort buyers on home-showing tours or host open houses. Another might draw up purchase offers, manage the lending process, or attend home inspections. Teams can also significantly benefit new agents as they learn the ropes, providing a measure of training and mentoring.
The Team Leader
The team leader is generally the agent who handles the listings. Team leaders list, then team members work with buyers. In some team formats, all members are encouraged to pursue listings under certain circumstances, but most often, the leader is the rainmaker—the individual who brings in the business. A team leader can’t possibly be in 10 places at once without the support of a team. Team members can hold four or five open houses simultaneously. The open houses attract buyers, which keeps everyone very busy.
How Compensation Works
Leaders compensate members in various ways. Pay can range from a flat rate for a salaried associate or a portion of the team leader’s commission to a particular percentage split based on performance. It might be a combination of all of the above. According to the National Association of Realtors survey, the most common compensation arrangement for teams was a fixed commission split. With a fixed commission split, the splits stay consistent between the lead agent and the other agents on the team. For example, on a two-person team, the team leader might receive 60% of the commission and the other team member might receive 40%.
Fiduciary Relationships and Real Estate Teams
Team leaders often operate within a single agency, which means they represent only home sellers. They don’t have to worry much about whether they’re looking out for the buyer in a transaction because they have a fiduciary responsibility to only the seller. This usually works well because different qualities and skillsets go into representing sellers versus buyers. It makes little difference to most leaders whether a team member or an agent from another company brings in the buyer. A team leader’s interest is in selling the home for the seller. Dual agency applies if a team member brings a buyer, just as if another agent from another office within the same brokerage represents the buyer. If you have any questions about dual agency or how your agent will protect your interests, don’t hesitate to ask.
Pros and Cons of Real Estate Teams
A real estate team gives clients two or more experienced agents working on their behalf without paying more in commission. The client gains collective knowledge and wisdom as team members often brainstorm offer strategies for clients. In a pinch, any one of the team members can cover for another, and no client should ever feel neglected. The downside to working with a team is that you may be working with someone different at each point of the sales or home buying process. For example, you might talk to one person when you list your home, then have someone completely different handling your home showings and open houses. If you like consistency, you might prefer working with a real estate agent who isn’t part of a team.
