The Evolution of Teams

In today’s market, residential real estate teams are becoming increasingly popular. Teams are proving to be effective, producing more transactions than top-producing agents. So, it’s critical for a brokerage to be able to support and integrate teams in their model.

While most brokerages have built their business on a foundation of supporting their individual agents, they need to switch gears and learn how to meet the needs of the team broker.

HomeSmart Chief Operating Officer Wendy Forsythe, discusses the evolution of teams and how to successfully integrate them within a brokerage in a commentary with RISMedia.

By: Wendy Forsythe

Teams continue to grow in popularity and effectiveness. In fact, according to research, team transaction rates are growing at a faster rate than those of top-producing agents.

Let’s take a look at the past, present and future evolution of teams.

Phase 1: Partnerships

Initial adopters of the team concept were usually friends and colleagues. Each found themselves extremely busy and thought that partnering up might solve some of the stresses of their individual businesses. They could market themselves together and offer increased availability and service to their clients.

Although solid in concept, these types of team arrangements have their challenges. Without clearly defined roles and business rules, conflict can easily arise. Despite these drawbacks, we still see successful partnerships in the industry today.

Phase 2: Team Leaders

As top-producing agents built their businesses, the concept of becoming a team leader grew in popularity. The top-producer personality isn’t typically accustomed to sharing the spotlight, so a partnership doesn’t solve the challenges of success. Instead, the top producer could become the team leader or lead agent, with all of the marketing and business occurring under the team name. Buyer’s agents and other staff would help support the production growth of the team leader.

The increase of these types of teams has been widespread, as the business model makes sense for the top-producing agent who typically has more business than they can effectively handle. It allows them to scale their production to a higher level, service their clients more effectively and gain some work/life balance.

Phase 3: Team Brokers

We’re seeing a sophistication of the team leader model that extends far beyond a team leader with a few agents. Today, these teams have become mini brokerages within brokerages.

Today’s teams are looking for fully-developed software systems to manage their team’s activities, in addition to robust lead generation and conversion strategies, strategic marketing plans and a clear vision of their business goals.

The only problem is that brokerages haven’t figured out how to support this type of team. Brokerages that have built their business on supporting the individual agent don’t have the infrastructure or the mindset to meet the needs of the team broker. But the biggest hurdle is compensation.

Determining the compensation package for a team broker with several agents, admin and marketing staff who work with them is almost impossible in a commission split or commission cap environment, resulting in a growing unrest.

Finding the Win-Win

There are three components that allow for the successful integration of team brokers within macro brokerages and provide a win-win for everyone:

1. A transaction-fee compensation model. This simplifies the entire compensation challenge by removing splits and caps. For each transaction the team closes, they pay a fee.

2. Tools, systems and services that are built to support teams. The macro broker has to make this commitment if they want to attract and retain team brokers.

3. Leadership that can support the team broker. The leader of this type of team is running a complex business. They’re looking for business leadership and strategic guidance from their broker/owners.

Wendy Forsythe has leveraged her passion for real estate, operations and branding to help build successful real estate networks in both Canada and the United States. She is currently the chief operating officer at HomeSmart International. HomeSmart combines a transaction-fee business system with high service and robust technology. To learn more, visit You can reach Wendy directly at [email protected].

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