Today’s “Ask the Expert” column features Arthur Darmanin, Chief Executive Officer with Sellstate Realty Systems Network, Inc.
Q: Are all teams created equal?
A: The short answer is no. Not only are there different types of teams, but each type functions and compensates differently. Before starting a team, you should do some research to determine which setup best suits your needs. Let’s examine the more common types.
Type 1: The Partnership
Fairly straightforward, a partnership is created when two or more agents agree to team up and work together and share the income, typically on an equal split. While easily the simplest setup, these types of teams rarely last, as one person often ends up earning more than the others and feels that they deserve a higher percentage of the profits, which ultimately ends up in the dismantling of the team.
If you choose this path, be sure to have a written agreement outlining the expectations of each member, even if you’re forming the team with good friends that you trust.
Type 2: The Lead Generator
A more common setup, this type of team involves a team leader generating all of the leads, with the team agents doing most or all of the legwork. Under this scenario, you should choose your team members carefully, and have a good follow-up program in place. In order to run a team of this nature, you must be well capitalized so that you’re able to generate enough leads to satisfy all of your members and have a salaried administrator to deal with lead distribution and follow-up programs.
Training is paramount for the success of this type of team, as it’s your responsibility to ensure that your agents are able to convert the leads you provide into closed sales. In exchange for your efforts, your team agents should be on a 50/50 split.
Type 3: The Group Effort
This type of team is similar to Type 2 with the exception that team agents are expected to generate some of their own business, rather than being totally reliant on you for leads. Under this type of setup, you must spend time training the team on prospecting and creating their own leads, in addition to conversions.
This type of team might have a higher commission split for the team agents—usually 60/40 in their favor. This split must apply to all deals, regardless of the lead origin, as it can become impossible to police where each lead came from, which can cause trust issues.
Type 4: The Mentor
This type of team is set up more as a coach/mentor relationship, and does not provide any leads at all. This type of team requires a lot of training by the team leader, as the biggest weakness in this setup is that agents tend to leave the team when they feel they’ve been trained enough to self-sustain their business.
These teams typically have a higher split, such as 70/30, in favor of the agent.
In the end, when it comes to teams, keep the following in mind:
-Unless you have your own training manual, join a brokerage that can provide one.
-All splits should come after the office portion and/or franchise fees.
-If there’s a monthly fee associated with your brokerage, have your team members pay their own so they have some skin in the game.
For more information, visit www.JoinSellstate.com.