The real estate industry can be incredibly rewarding, which I’m sure is what enticed you to get into real estate in the first place. Once you did, you found it could also be incredibly challenging as well. If you’re an experienced real estate agent looking to expand your business, starting a real estate team might be the next logical step.

A well-structured team can increase your productivity, service more clients, and create a thriving work environment for other agents. Maybe even pave the path to your own brokerage if that’s your interest. Here I hope to guide you through the essential steps of starting a real estate team, from assessing your brokerage’s support to planning your team’s structure, recruitment strategies, and future growth.

1. Assessing Brokerage Support for Real Estate Teams

Before you dive into the logistics of building a team, the first step is to ensure that your current brokerage supports the formation and operation of real estate teams. Not all brokerages are equipped or willing to accommodate teams, and this can significantly impact your ability to grow or perhaps even start a team.

Start by having an open conversation with your broker or office manager. Be sure to REVIEW YOUR BROKERAGE’S POLICY MANUAL for any specific policies about teams. If there are already teams at your brokerage, speak with those team leads to ask about their experiences in running a team and how the brokerage has supported (or not supported) them. Commitments from your brokerage in writing via policy manual are more meaningful than an over-coffee conversation. Just a few of the questions you need to know before you begin…

• Does your brokerage even allow teams?
  The rest of this article will assume the answer to be “yes”. If the answer is no… well… I’ll be writing about interviewing brokerages before long.
• Does the brokerage have requirements around initiating a team?
  While many don’t, I’ll share some of the policies below that we put into place at our brokerages to guide and support teams. This isn’t to say your brokerage should run like ours, but perhaps you can share this article with your broker for them to consider if the brokerage is “light” on team support and guidance.
  The policies we had implemented for teams:
  • Teams are 3 or more individuals. We had put processes into place to make it super easy for two agents to split commission on a deal. So when it’s just two friends working together, or spouses working together, there’s no need to go through all the hassles and planning that ensue in this article. Having the brokerage allow for two-person split deals also made it easy for two to try working together without much commitment, see if they maybe wanted to launch a team; and just as easy for them to decide to stop working together. Once you have 3 people, then it’s time to consider a team policy manual, a team bank account to disperse commissions, etc.
  • Teams must be approved by the broker. Almost as soon as we launched a brokerage, we had relatively new agents trying to start teams like it was TikTok fad. We’ve been in business long enough to see the writing on the wall, leading a path to failure and frustration. So we required team leads to be experienced and have a plan for success much like you will see within this article.
  • Teams must have their own policy manual, and it must be approved by the broker. The team policy manual acts as an addendum, not a replacement, of the brokerage policy manual. This is a business, and large commission checks are involved. We lost more than one friend over commission disputes. The more that is in writing and agreed to up front between the broker, team lead, and team agents; the less risk of backlash.
  • Does the broker pay only you, the team lead? And you as team lead then have to pay your agents. Which then means you will now be responsible for 1099s, accounting, documenting how commissions were split, etc. Your year-end bill from the CPA for doing your taxes just tripled; along with how much administrative time you will put in to keep up with it all; along with your software expense to track it all correctly. Or does the broker pay your agents their share, as well as pay you your share, according to the commission agreement you have with your agents? Now you can get back to being a real estate agent and team lead; not a full-time office admin.

While that is not an exhaustive list, if will certainly begin to help you wrap your head around whether or not your current brokerage is the right place to begin a team.

1.2 Tools and Guidance for Building Teams

If your brokerage is supportive of teams, inquire about how brokerage’s tools, trainings and guidance factors into teams. Does your brokerage provide a CRM? Will they allow each of your team agents to have a seat (an account) in the CRM as well, or will you berequired to look into buying your own CRM. Are your team agents allowed to participate in brokerage trainings? If not, you’ll have to plan your own trainings. Are your team agents required to participate in brokerage trainings? This may deter you as you if you don’t want your team agents hearing other agents at the brokerage discuss how much better their commission splits are than yours. You will obviously have to ‘charge’ your team agents more than brokerage ‘charges’ you on commission splits, in order for your team to be profitable to you.

The same questions apply regarding eSigning systems such as Skyslope, SignWell, Dotloop, etc? Between CRM and eSigning systems, we were spending $2,300/mth on software to run our team when we were under another brokerage since the brokerage systems didn’t support our team agents.

2. Navigating State and Brokerage Policies on Team Names and Logos

2.1 State Requirements

When forming a real estate team, choosing a name and creating a logo are exciting steps, but they are also areas where legal considerations come into play. Different states have varying regulations regarding team names and branding, and it’s essential to be aware of these before you finalize your team’s identity.

Many states require that the team name clearly indicates that it is associated with a real estate brokerage. For instance, you may need to include the word “team” or “group” in the name along with the brokerage’s name must also be included. Failing to comply with state regulations can result in fines or other legal complications.

It’s advisable to consult with a real estate attorney or your state’s real estate commission to ensure that your team name and logo meet all legal requirements.

2.2 Brokerage Requirements

In addition to state regulations, your brokerage likely has its own branding guidelines that your team must follow. These guidelines may dictate how the brokerage’s name and logo should be presented alongside your team’s branding.

For example, your brokerage might require that its logo be prominently displayed on all team marketing materials, or that your team’s colors and fonts align with the brokerage’s overall branding. Understanding these guidelines will help you create a cohesive and compliant brand for your team. This is not an area to ask for forgiveness instead of permission, otherwise you could waste time and money on branding signs, logos, website, etc. that have be tossed and redone.

3. Developing a Recruitment Strategy for Your Team

3.1 Crafting a Unique Value Proposition

Recruiting talented agents to join your team is one of the most critical aspects of building a successful real estate team. To attract top talent, you need to offer something unique—something that sets your team apart from others in the market.

Consider what you can offer that other teams or brokerages might not. This could include:

• Training and Development: Offering comprehensive training programs can be a significant draw for newer agents looking to learn and grow. This will come at the costs of your time and productivity as a producing agent.
• Lead Generation: If you have a robust lead generation system, this can be a powerful incentive for agents looking to increase their deal flow. This will come at a cost-per-lead as well as watering-down the lead inflow that you’ve built for yourself, to now allow other agents to drink from that faucet. Budget for more lead flow with a reduced conversion because your new agents won’t be the incredible converters of leads that you are, until you train them to be.
• Technology and Tools: Providing access to advanced real estate technology, such as CRM systems, marketing automation, or data analytics tools, can attract tech-savvy agents. Take note at how the systems you use charge. Is licensing done per person? Does the vendor have team pricing available? Calculate this cost when developing your commission split for your agents. Or do you intend to charge your agents dollar-for-dollar, the software costs you incur for having them onboard. If so, how do you intend to collect from your agents? Think about writing an in-arrears policy if an agent can’t pay you and begins to fall into debt with the team.
• Interaction and Culture: One of the main reasons agents join a team is that they want interaction. They want a culture that will nurture their career. This may be one of the “soft” points, but probably one of the most critical to consider if you want a team to last.

3.2 Identifying Target Agents

Once you’ve established your value proposition, the next step is to identify the types of agents you want to recruit. Consider the following:

• Experience Level: Are you looking to recruit seasoned agents with a proven track record, or are you open to bringing on newer agents who show potential?
• Specializations: Depending on your market, you may want to recruit agents with specific expertise, such as luxury properties, commercial real estate, or first-time homebuyers. How do you plan to vet the potential of new agents in these areas?
• Cultural Fit: It’s essential to recruit agents who will fit well with your team’s culture and values. This will help create a cohesive and collaborative team dynamic. We had more than one agent that simply rubbed others wrong, and sometimes it wasn’t incredibly obvious. No one wants to complain to “the boss” and guess what? You are now “the boss”. When someone proves to be a bad fit, be quick to either (a) have a direct conversation with them about the issue or (b) let them go. Do not waffle. Do not delay. You, your agents, and your business are suffering in silence when you delay such things.

3.3 Recruitment Channels

There are various channels you can use to recruit agents for your team. Some effective methods include:

• Networking: Attend real estate events, industry conferences, and local meetups to connect with potential recruits. Local Realtor® associations typically have regular meet-ups, which is a great starting place. This also allows you to see how well a potential agent networks.
• Social Media: Use platforms like LinkedIn, Facebook, and Instagram to showcase your team culture and attract interested agents. Vice-versa, use social media to see if potential recruits are the social media savants you want, and is the kind of attention they garner what you want for your team.
• Job Listings: Post openings on job boards, your brokerage’s website, or specialized real estate recruitment sites. I had to post this cookie-cutter answer, but admittedly, we never did this. It generally costs money, and we wanted agents who mingled well. An agent looking at a job board, likely struggles to put themselves out there and will also struggle to do the same with clients.
• Referrals: Encourage current team members or colleagues to refer agents who might be a good fit for your team. Consider a cash bonus to existing team agents who bring someone else on, perhaps only payable after the new agent closes a few deals.

4. Defining Your Team’s Work Environment

The work environment you create for your team will play a significant role in your team’s success and satisfaction. With the increasing prevalence of remote work, you have several options to consider:

• In-Office: An in-office team can benefit from face-to-face interactions, easier collaboration, and a stronger sense of camaraderie. However, this may limit your ability to recruit agents who prefer or require flexible work arrangements.
• Remote: A fully remote team offers flexibility and the ability to recruit agents from a broader geographic area. However, it requires incredibly strong communication tools and practices to ensure that team members stay connected and productive.
• Hybrid: A hybrid model offers the best of both worlds, allowing agents to work from the office part-time and remotely the rest of the time. This can appeal to a wide range of agents and provide the flexibility needed to accommodate different work styles.

We developed DashLoops.com specifically to help in these areas. But I’ll limit the self-promotion within article. You can always grab a free account to see how it can will help with building your team’s “tech stack”.

Regardless of the work environment you choose, effective communication is crucial for keeping your team aligned and productive. Establish clear protocols for how and when team members should communicate, whether it’s through daily check-ins, weekly meetings, or instant messaging platforms. As your team grows, so will the utility of these different channels. A private Facebook group worked well to manage a very small team of people who were all very active Facebook users. But as soon as we started to grow, and brought on some agents who weren’t such big Facebook users, we had to find new ways to stay in-the-loop with our team.

5. Essential Software and Tools for Your Real Estate Team

5.1 Customer Relationship Management (CRM) Systems

Typically tied very-closed to lead-generation, a CRM system is the backbone of many successful real estate agents and teams. The more you grow, the harder it will be to switch gears to a different CRM system later. Trust me, we did it twice. I’ll probably write an entire article on that sometime in the future. Be honest and know yourself. If you’re not a diligent user of CRMs, then don’t expect to build a lead-converting machine that all you have to do it hit the accelerator on ad-spend and think you’ll see the commissions roll in faster. Quite the opposite, which again, I’m speaking from experience. I burnt my agents out on leads, knowing I wasn’t the type to make 200 lead calls a day myself. I expected them to do the lifting for me, and that is a recipe for frustration and rapid loss of revenue. However, if you are a lead-conversion machine yourself; that makes you incredibly well suited to build a productive, lead consuming team that pumps out commission checks on the other end.

5.2 Marketing

Assuming you’re an experienced agent if you’re considering launching a team, you already know what works for you. Much like the CRM mentality I shared above, if you’re an orange then don’t try to build a team of apples. Agents will flock to you based seeing that you have succeeded doing things your way. They’re not coming to you, for you to experiment with to see what’s successful. Building a team is an expression of who you are. If you’re already a killer at using mailers to convert FSBO’s to clients; train your team so now you’re converting even more FSBO’s into clients. Are you a Google Ads wiz-kid? Then decide if you want your agents to simply benefit from your inflow of leads, or do you intend to train your agents to also become CPC experts. Your team is an extension of your skillset.

5.3 Transaction Management Software

You may not have needed a transaction management process or software as an individual agent. But if you want to be able to help multiple agents handling multiple deals simultaneously, you will need systems for this to keep on top of documents, tracking deadlines, and ensuring that all necessary steps are completed. Some of these systems will help with commission calculations as well. Advanced systems can help not only the team agent track their deals and know what commission to expect, but help you as team lead over their deals and know how much the team is profiting, even calculating the brokerage’s commission split so you can see a full P&L (profit and loss) statement on every deal.

As a commitment for the future here, we had developed in-house tools to do just this kind of transaction tracking and commission reporting for our brokerages. We will be working on developing these into plug-ins for DashLoops.com.

6. Providing Training and Development for Your Team

6.1 In-House or Hired Training Programs

Training is a critical component of building a successful real estate team. Offering in-house training programs can help your agents improve their skills, stay updated on industry trends, and become more effective in their roles.

Consider offering training in areas such as:

• Sales Techniques: Training on negotiation, closing strategies, and lead conversion.
• Marketing: Courses on social media marketing, content creation, and branding.
• Technology: Training on the tools and software your team uses, such as your CRM, marketing automation tools, and transaction management software.
• Compliance and Ethics: Ensuring that all team members understand and adhere to legal and ethical standards.

You already know which of these you’re a rockstar at, and which ones you’re not so hot at. Train with your strengths. Invest in hired trainers, coaching programs, etc for both you and your team to improve in areas that aren’t your strong suite.

6.2 Partnering with Vendors for Training

Consider partnering with vendors. Lenders, real estate attorneys, insurance agents… they are all experts in their given field. Many would jump at the opportunity to give your team a private training for free; perhaps even offer to bring coffee and donuts. You just need to give them a location to train your people.

7. Commission Planning

The idea is simple but the math can get very complicated. Revenues, which is commission income to you, the team lead; must exceed expenses. Otherwise you’re not running a real estate team, you’re running a non-profit.

At a minimum, you must 100% understand your brokerage’s commission split model before you even begin to think about building a team commission split model. The simplest method is what I’ll refer to as a Brokerage+ model. Take your brokerages commission plan and add a flat dollar amount or percentage to it. If the brokerage charges a flat $800 per closing, then charge your agents $1,400 per closing. Don’t take this verbatim please, I don’t want your financial success or failure hinged off of one sentence in a blog post. Much more complicated is if your brokerage charges on cap-split model, where you’re charged a percentage split of all deals until you reach a cap amount. Typically the cap resets annually on these plans. Understanding how your brokerage is going to apply the cap-split model to you and your team will be absolutely necessary. What happens if you cap out, but your team agent hasn’t? What happens if your team agent caps out, but you haven’t? There’s no answering this in one article. It takes details and spreadsheets to answer the commission conundrum.

Don’t forget to factor in ancillary brokerage costs, such as MLS fees, E&O fees, etc. Then throw in your fixed as well as variable costs. Are you renting an office? Paying for leads? CRM, eSigning, etc. Some of these may be minimal, but will they still be minimal if you explode to 50 agents and 30 of them aren’t carrying their weight in transaction volume. Sharpen your pencil for this one. Maybe even consider hiring a CPA for a few hours as a consultant to help you solidify your understanding of the potential inflows and outflows of cash, so you can craft a profitable commission plan.

8. Planning for Team Growth and Future Goals

8.1 How Large of a Team Do You Anticipate Running?

As you build your team, it’s important to consider how large you want it to grow. The size of your team will depend on various factors, including your market, resources, and long-term goals.

Start by assessing your current workload and capacity. If you’re consistently handling more leads and transactions than you can manage, it may be time to expand your team. However, be mindful of growing too quickly—scaling up requires additional resources, including administrative support, training, and management oversight. When we first launched our team, we went from 2 of us to 9 agents in what feels like over-night. We didn’t have everything in place just yet, and were building the plane while flying it. We had to let some agents go, which wasn’t fun and it was disheartening to the team. But eventually we settled into our sweet-spot. We ran into growing pains all over again when our brokerage exploded from 7 agents to 70 in about 18 months, but that’s for another article.

Consider setting milestones for team growth, such as adding a certain number of agents each year (both as a goal to shoot for and limit to hold yourself to), or expanding into new markets. This will help you manage growth strategically and ensure that your team remains effective and cohesive.

8.2 Defining Your End Goal

As you plan for the future, it’s essential to have a clear vision of your long-term goals. This will guide your decisions as you build and grow your team. Some potential end goals to consider include:

• Launching Your Own Brokerage: If your ultimate goal is to open your own brokerage, building a successful team is a great stepping stone. As a team leader, you’ll gain valuable experience in managing agents, operations, and marketing, which will be crucial when running a brokerage.
• Remaining as a Team: If you prefer to focus on real estate sales rather than the operational complexities of running a brokerage, you may choose to remain as a team. A well-established team can be highly profitable and allow you to maintain a strong presence in your market. It’s critical to launch a team within the right brokerage environment for this to work.
• Expanding Into New Markets: Another potential goal is to expand your team’s presence into new geographic markets. This can be achieved by recruiting agents in different locations or pening satellite offices. Again, brokerage support is critical in this arena.
• Becoming a Niche Market Leader: If you have a particular expertise or specialization, you may choose to focus on becoming a leader in that niche market. This could involve building a team that specializes in luxury properties, commercial real estate, or first-time homebuyers.

9. Conclusion: Building a Real Estate Team for Long-Term Success

Starting a real estate team is a significant undertaking. It will be equally exciting and stressful. You’ll be elated the first time one of your agents is wearing a t-shirt with your logo on it. You will also never forget the first time an agent leaves you for a better commission split. In our experience, the highs have been greater and more numerous than the lows. With thoughtful planning and a clear vision, it can be an incredibly rewarding venture. By understanding your brokerage’s support and restrictions, navigating legal and branding considerations, developing a strong recruitment strategy, and by far most importantly, know your strengths and weaknesses and you’ll be well on your way to building a successful team.

Your team’s success will depend on the work environment you create, the tools and software you provide, and the training and development opportunities you offer. As you plan for growth, keep your long-term goals in mind. With the right approach and right tools, your real estate team can become a powerful force in the industry, helping you achieve your professional goals while creating opportunities for other agents to thrive.