In my 28-year real estate career, I've witnessed the power of teams for building long-term success and wealth. But choosing the right real estate team structure can be a challenge. In this article, we'll explore three of the most successful team models and help you make an informed decision for building your own multimillion-dollar team.
The Best Real Estate Team Structures for 2023
Before deciding on a team model, it's important to understand the financial risks, difficulties, and potential outcomes of each structure. Traditionally, the three most successful team models include the mentor-mentee model, the team leader model, and the lead team model. Let's compare these structures:
Mentor-Mentee Model
- Number of Team Members: 2-10
- Split to Team Member: 70-90%
- Average Annual Transactions per Team Member: 3-6
- Team Member Retention: Intentionally low
- Number of Employees: 0
- Inside Sales Required: No
- Overall Cost to Operate: Low
- Difficulty: Medium
- Scalable to Other Markets: No
As a mentor, you provide guidance to newer agents in exchange for a percentage of their commissions. This low-cost, low-risk model is common in brokerages offering revenue sharing. It's a great option if you enjoy teaching and want to build a downline at your brokerage.
Team Leader Model
- Number of Team Members: 2-5
- Split to Team Member: 50-60%
- Average Annual Transactions per Team Member: 8-12
- Team Member Retention: High
- Number of Employees: 1-2
- Inside Sales Required: Maybe
- Overall Cost to Operate: Medium
- Difficulty: Medium
- Scalable to Other Markets: Possibly
In the team leader model, you actively promote your brand and provide resources to team members. This structure focuses on high standards and unmatched customer service. It's ideal if you have an established brand or a strong vision for building one.
Lead Team Model
- Number of Team Members: 3-10
- Split to Team Member: 30-40%
- Average Annual Transactions per Team Member: 12-36
- Team Member Retention: Medium
- Number of Employees: 2-5
- Inside Sales Required: Yes
- Overall Cost to Operate: High
- Difficulty: High
- Scalable to Other Markets: Yes
The lead team model is expensive and requires high transaction volume. It's operations-driven, with a focus on lead generation through advertising. This structure can generate substantial commissions but requires significant startup capital.
Which Team Structure is Right for You?
To determine the best team structure for you, consider your motivations, strengths as a leader, and the local market's expectations. Each model has its own advantages and challenges. It's crucial to select a structure that aligns with your goals and resources.
Remember, success in building a real estate team relies on effective leadership, clear expectations, and a strong team culture. Choose a structure that allows you to leverage your strengths and create a collaborative environment.
Building a successful real estate team takes time, effort, and careful planning. But with the right structure and a dedicated team, you can achieve long-term success and financial wealth.
Now that you have a better understanding of the three most successful team models, you'll be better equipped to make an informed decision. Good luck in building your multimillion-dollar real estate team!
FAQs
Q: Are there other real estate team structures that we haven't mentioned? A: While these three models are among the most successful, there are other team structures that may work for specific situations. Feel free to share any models we may have overlooked in the comment section below.
Q: What do real estate teams look like in 2023? A: Real estate teams continue to evolve and adapt to market changes. In 2023, successful teams prioritize collaboration, leverage technology for enhanced lead generation, and focus on delivering exceptional customer service.
