What's the best way to structure a real estate team? Tips on best real estate team models, commission structures and key roles.Learn more about Shaker
There is no one single real estate team structure template. Rather the real estate team structure will differ based on the brokerage and the size of a team. But we can look at a basic idea of what the structure looks like and how it is most often affected by team size.
A larger team is able to delegate many responsibilities to roles like a showing assistant. They may have a larger administrative department, meaning that agents will be responsible for less paperwork. In a larger team the team owner will be more responsible for team management, having less time to spend directly with clients and on lead generation.
While real estate team structure varies by team, they all delegate the different aspects of real estate. The biggest divide is between Admin responsibilities and agent ones, as admin does not work on commission, changing greatly how their job is carried out.
Those considering entering the world of real estate may be wondering how do real estate teams work. In many ways they are different than working for oneself as a real estate agent. The team has to work together. While all real estate agents are independent contractors, working with a team is more like having a regular job. You are accountable to your other team members, and not just to yourself. This can be a helpful motivating force, but it also can have some of the downsides that come with a regular job.
There are numerous advantages to working with a team:
But there are disadvantages as well:
For any real estate agent, one of the most important considerations will always be the split, and this differs when it is specifically the real estate team commission split. But how is this different from the split that an independent agent has?
The idea of a commission split originates from the fact that an agent cannot directly collect a commission. Rather only a broker is able to conduct these transactions and collect a commission, and they may choose to hire an agent to carry out this work and then pay them a commission split. Generally, this split is 50% but it can be a great deal more favorable to the agent, going up to 100% with the brokerage just collecting a flat fee.
One major way that the real estate team commission split differs from that with the broker is that there are simply more people involved in the agreement. In the case of the independent agent, the agreement is only between them and the broker who holds their license. Because there are more people involved, things easily become more complex. That is why it can be a good idea to make use of a real estate commission split agreement template to make certain everyone on the team is on the same page.
There is truly no one formula for determining the real estate team commission split, but one can learn a great deal about how different teams handle it by visiting a real estate team splits forum.
The biggest way that the real estate team compensation model differs from that of the independent agent, is that the broker-agent split can be based solely on the final transactional amount, while the team split must take into account different factors and the different roles each team member plays.
Which one of real estate team models any one business selects will depend greatly on the real estate team expectations. More than anything this determines the different kinds of team models most common to the real estate industry. Let's take a closer look.
Sometimes spouses, sometimes parent/child or even siblings, a family team uses their close personal relationship to build a business team. This is often structured as a partnership. Some key things to remember is that it can still be important to use contractual agreements in defining the partnership. At times the delegation of duties can be seamless, but at other times too many assumptions can get in the way.
This is what happens when agents share leads. It has the advantage of requiring minimal management from the lead agent, but the disadvantage of providing the least control in the follow up to leads.
This team is structured around a lead with a proven track record of great success. The advantages are the ability to increase income and productivity as well as to better specialize with the right team. The disadvantages include the potential to get bogged down from success with too much team management.
This is most like the broker/independent agent model. It allows for income increases with smaller splits.
As we have discussed there are numerous types of real estate teams and roles within them. First of all let's further break down some real estate team roles:
A team provides more specialized service than an individual can. Additionally, a team offers deeper resources to both buyers and sellers.
A real estate team operating agreement is an important document for making certain that everyone is on the same page regarding team expectations and commission splits. It is simple to create a real estate team agreement word doc so long as you have a real estate team partnership agreement template.
In general, an operating agreement lays out the foundational ways in which business will be conducted, going into full details. In the case of a real estate operating agreement, this is done in large part so that everyone has a full understanding of how the commission split operates and what precisely their job is in earning that commission.
While it is important to remember that real estate team partnership agreement is a legal document, with a template it is not necessary to spend money on legal fees.
Here is what a partnership agreement should have:
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