Home sales can often succeed or fail in a matter of hours, as many buyers stuck in bidding wars have discovered the hard way during the last two years. But what happens when your agent comes down with COVID or needs to attend an important family event?
Real estate teams allow two or more real estate agents to share resources, time and knowledge. Although only about a quarter of all Realtors belong to one, they’re growing in popularity, according to the National Association of Realtors.
Real estate teams benefit everyone in the transaction — buyers and sellers can get help without waiting on a specific individual, and agents can benefit from a team environment and better work-life balance. Here’s how they roll, and how they differ from the traditional solo real estate agent.
How do real estate teams work?
Real estate teams can operate and function in several different ways. They can be a team of one lead Realtor, agent or broker with several support Realtors or agents under them. They can be a team of real estate pros working independently but teaming up to pool resources like office space and marketing materials. Or, they can be a fully equal partnership of several people sharing every aspect of a transaction.
Legal definitions of real estate teams vary by state. Connecticut, for example, designates a real estate team as a group of at least two licensed real estate brokers or real estate salespersons who are affiliated with the same sponsoring real estate broker and engage in advertising as a group using a team name.
Regardless of which type of real estate team you work with, you can expect that “the members work together, coordinate and support each other with every client,” says Alex Capozzolo, co-founder of Brotherly Love Real Estate in San Diego, Calif.
Teams can be tiny and intimate, comprising just a few members, or “a full-fledged, highly structured entity that is organized and operated like a law firm or investment bank” with a large staff, says Dawn McKenna, a real estate broker and owner of Dawn McKenna Group in Illinois, Florida and Michigan.
Smaller teams are likely only to consist of licensed agents and possibly a few staff to help with administration. On the other hand, large teams are likely to be composed of many real estate agents, real estate brokers and a whole team of other staff with roles in “accounting, marketing, transaction support, insurance” and legal, says McKenna.
Small teams vs large teams
Both types of teams have their advantages and disadvantages. In a small team you’re likely to only have one point person with others filling in if your person is unavailable or helping out as needed. In this situation, you get personalized attention, but you may not have the efficiencies or expertise you can find in a big team.
With a larger team, you may have one point person who checks in and guides you through the overall process, but you’ll likely spend most of your time with individuals specialized in their fields. The person who takes you to showings may not be the person who writes up your offers or asks you for documents. This division of tasks can be more efficient but it can make you feel like you’re being shuffled around, and having to repeat yourself a lot.
Real estate firms and commissions
As the buyer or seller, you will likely still pay the same commissions to your real estate agent regardless of whether they’re operating individually or as part of a team. On the other hand, your agent may not receive as much of a commission if they’re part of a team.
Every team structures its compensation differently. “For our team, we keep a set commission for all members and an additional bonus of 10 percent for any member who makes a sale,” says Capozzolo.
Other teams may split commissions evenly after expenses are paid or charge a flat fee, while others have a split that varies from 25/75 to 75/25 in favor of the team or agent, depending on who first acquired the client.
“In all cases, the split of commissions should be immaterial to the client. If you sense that your agent is stretched on time or resources to dedicate to you due to team commitments or fees, you have the wrong agent, or your agent is on the wrong team,” says McKenna.
Advantages of using a real estate team
When a real estate team works well together, they can pool their knowledge, time, and resources to serve you effectively.
For buyers, a real estate team can “do better research, preview listings, and accommodate your showing schedule” because they help each other, says McKenna.
For sellers, a real estate team can provide “more sophisticated, broader marketing of your home”; a wider audience should see it because other realtors on the team will share it with their clients, adds McKenna.
Beyond gaining the expertise and services of multiple agents, nobody can be available 100 percent of the time, so having someone on the team who is knowledgeable and can step in if your primary agent is unavailable can be extremely important.
Disadvantages of using a real estate team
The biggest disadvantage of using a real estate team is the risk that they won’t work well together — the old left-hand-doesn’t-know-what-the-right-hand-is-doing syndrome. Buying a house is stressful enough without having to negotiate through any inter-office drama. The potentially biggest transaction of your life is on the line, and you don’t want someone to drop the ball over a miscommunication.
Even with a real estate team that works well together, you may feel like you’re getting less specialized, individual attention than you would with an individual agent, who has (or should have) every detail of your search or property at their fingertips. Or that it’s not clear who is qualified to handle what. You don’t want to have 10 different names on your speed-dial, or be explaining the particulars over and over again to different people.
How to build your real estate dream team
Building a real estate dream team is similar to picking out a great real estate agent. Decide if you’d like to go with a bigger or smaller team first, and then read reviews on the best teams in your area. Schedule interviews with someone from a few of the top-rated teams.
During your interview, ask them how the buying or selling process would operate if you hired them. Try to get a feel for how their team functions: Is it a team of equals? Or more like a team of rivals? How are duties divvied up? Does everyone know everything about your listing or your search, or are there designated responsibilities?
Also ask for data on the team’s “deal volume, pricing accuracy, time on the market, network connections, and social media reach, and make sure they demonstrate real success,” advises McKenna.
Once you settle on a team, clarify with them who is running point on your house sale or hunt. If questions and issues come up, who are you going to call/text/email? And if they aren’t available — who is second on the list?