In many markets, the model of the lone real estate agent has given way to a team-oriented approach. Once you become a real estate agent, you may be on the fence about working with a real estate team. It’s important to consider the advantages and disadvantages before you commit. Here are some thoughts on working with a real estate team to help you make an informed decision.
Working Solo in Real Estate
If you are just getting started in the industry, it’s important to note that real estate agents must work under the supervision of a broker. However, real estate agents who work under the same broker still do so independently. They may be part of the same brokerage, but each agent has their own clients and earns their own commissions.
This article addresses the trend in which real estate agents work together to win more listings and close more deals.
In the past, most real estate agents worked alone. However, the industry has experienced a substantial shift, and more agents are forming teams. For the most part, real estate agents have enjoyed this new organizational structure.
An independent national study from Workman Success Systems states that 85% of real estate agents believe being on a team gives them a competitive advantage. Additionally, 77% of study respondents indicated they either had a “positive” or a “very positive” experience when participating in a real estate team.
The popularity of these arrangements and their ability to help agents succeed present a strong case for them to continue moving forward. However, there are some drawbacks to this type of structure.
Let’s look at the pros and cons of working alone vs working as part of a real estate team.
Pros and Cons of Being a Solo Real Estate Agent
It’s hard to know what working as a real estate agent will be like until you do it. You may think that you will relish flying independently but may be surprised to find that there are certainly drawbacks to this type of career. Here are some pros and cons of working independently within your real estate brokerage.
Pros of Being a Solo Agent
You may have been drawn into the real estate field because you like the idea of working independently. That certainly is a benefit of acting as a solo agent. Here are some of the other benefits.
- Flexibility: Working by yourself means that you can work a schedule based on your preferences – not the preferences of a team.
- Unlimited earning potential: As a real estate agent, your commissions are based on the transactions you close. Typically, agents who spend longer hours devoted to the business reap financial rewards without having to share their commissions with other agents.
- Independence: Real estate agents working solo can choose their clients and marketing strategies based on their own business model.
- Sense of ownership: Working as a real estate agent appeals to those with an entrepreneurial spirit. Your wins are your own, which can be highly satisfying.
- Ability to form relationships with clients: Real estate agents play a crucial role in guiding clients through their transactions. Real estate agents sometimes form close relationships with their clients when working independently.
Cons of Being a Solo Agent
Even with all the benefits of working as a solo real estate agent, there are a few drawbacks.
- Competition: As a real estate agent, you will compete with real estate agents from your own brokerage and other brokerages.
- Income depends on you: There are various reasons you may earn few commissions during a slow month – or quarter. This may make it challenging to cover your financial obligations if you don’t have adequate savings.
- Long hours: Busy agents must attend every open house and client meeting. This can lead to long hours and a lack of work-life balance.
- Financial risk: Agents typically incur expenses, such as advertising, marketing materials, etc., regardless of whether a sale is made.
Some of these drawbacks of working solo are also a problem for agents who work with a team. However, since a real estate team shares costs and workload, they may be more manageable.
Working in a Real Estate Team
There are differing structures for real estate teams. Some work together and enjoy a steady flow of referrals from past clients and a robust lead gen program. The team will distribute leads for follow-up from team members, who may become the primary contact for that client.
Other teams will assign each agent a specific role. For example, one agent may be designated to give client presentations, another may write sales listings, and a third agent may oversee lead generation.
Still, other teams may have members who specialize in different niches – such as commercial properties, investment properties, or differing types of residential real estate.
Pros and Cons of Forming or Joining a Real Estate Team
Working with others on a real estate team may appeal to you. However, there are some drawbacks to the team approach, too. Let’s discuss the pros and cons.
Pros of Joining a Real Estate Team
Working with a real estate team can be a great way to launch your career or to scale up from your current approach. Here are some of the benefits.
- Ability to learn from experienced agents: If you are just starting in the industry, working as a team will help you learn the ropes from more experienced agents. That real-world, hands-on experience will make you a better agent and allow you to fill in the gaps in your knowledge and practice.
- Share expenses: Many teams share the cost of support staff like an assistant, transaction coordinator, or lead nurturer. Similarly, you can share the cost of a web presence, content creation, graphic design, branding, special events, or other resources with your team lead and colleagues. That can allow you to create promotional materials and initiatives that you might not be able to afford alone.
- Share profits: There’s less financial risk when you work as a part of a team. Even if you have a slow quarter, your peer specializing in another niche may still do well.
- Share responsibility: Depending on how your team is structured, you may have a more flexible schedule when working with a team. If you know that your team members will be available, you might be able to take a vacation – even during the busy summer season.
Cons of Joining a Real Estate Team
As with any group working together, real estate teams can have their share of struggles. Here are some things to consider before you join a team.
- Marketing your business: If you want to make a name for yourself in your market, you may have trouble doing so on a team. Since the team’s identity is usually centered around the name recognition of the team lead, it may be harder to create your own professional identity and get noticed as an individual.
- Lack of brand differentiation: Similarly, your team will have a brand identity that may keep you from pursuing your own interests. For example, developing your luxury home brand may be difficult if you are working with a team primarily focused on in-town condos. Make sure that the team you join is focused on the real estate niche that you want to work in so that you can transition to a personal brand should you choose to do so.
- More personalities: With more people comes more personalities—for better or worse. While there will no doubt be people on the team with whom you bond, you’ll also find folks there who aren’t your cup of tea. You’ll need to put your people skills into high gear to ensure you work well with your teammates to be productive and successful.
- Smaller commission cut: When you are part of a team, both your broker and your team lead will take part of your commission, meaning a smaller cut for you. Hopefully, a larger number of clients will offset this. Be sure to do the math to determine if these additional commissions will make team membership worthwhile.
Joining a Real Estate Team vs. Working Solo: Which Do I Choose?
If you are just getting started in the industry, you may wonder if joining a team is the right decision for you. Consider the following questions before joining a team:
- What are my long-term career goals?
- What type of environment do I thrive in?
- What support and resources do I need?
- What is the team culture like?
- What is the team’s track record and reputation?
- What are the expectations and requirements?
- What opportunities for growth and advancement are available?
- How will joining the team impact my brand and business?
- What are the potential risks and challenges?
If you already have a thriving real estate practice, you may be looking for ways to add to your current business. Consider the following aspects of team leadership before deciding whether to launch your own real estate team:
- Do you have enough name recognition to support additional agents and staff?
- How will the team you take on help you branch out to new niches or areas of your market?
- Do you have well-defined branding that you can transition into a team brand?
- Do you have a talent for managing others and helping them to develop their skills?
- Do your existing referral sources expect your undivided attention, or would they be open to having a team member take over some of the hands-on work that you do?
Whatever your decision, let it include both your short-term needs and long-term goals. Talk to a trusted mentor or colleague who has worked individually and at the head of a team to get their insights. Most importantly, do an honest self-assessment to decide whether a team dynamic will work well for you.
As you consider ways to grow your career, join the hundreds of thousands of real estate agents and brokers who have turned to Colibri Real Estate to learn the tricks of the trade through high-quality real estate continuing education. Our state-approved real estate CE courses will improve your industry skills, boost your income, and hone your competitive edge. Start today!
