There are benefits to joining a real estate team, but that doesn’t mean it always works out. Sometimes, real estate agents grow to hate being part of a real estate team and they wonder how to leave a real estate team.
For every benefit, there is a disadvantage to joining a real estate team.
In this post, we’ll cover how to recognize when it’s time to move on from a real estate team and how you can leave your real estate team.
Why Agents Leave Real Estate Teams
There are generally two main reasons real estate agents leave a team: poor lead quality or the lack of value when compared to the commission splits on real estate teams.
Sometimes, it’s both.
Many real estate agent teams start because a high-producing real estate agent has more lead than they can personally handle. They need help working and servicing these leads, so they end up looking for another real estate agent to join their team.
Sounds like a pretty good deal, right?
Not so fast. What ends up happening is the team lead cherry picks all of the good, high-quality leads. It’s what I refer to as the shark-feeder model.
The team lead gets all the good leads and leaves the scrap leads for agents on their team. These agents are left with leads that are cold, not ready to close for 12 to 18 months, and at low price points.
All leads should be worked and these kinds of leads eventually turn into sales, but it’s not fun to get all of the scraps while your team lead is enjoying the best leads. To me, that’s not something a leader does.
A good real estate team will create more equitable distribution of leads or at least provide more high-quality leads to their real estate agents. Not just expect them to make cold calls and take the scraps.
No Value On Real Estate Teams
Second, since most teams start because a high-producing agent doesn’t have enough time to service leads, they also don’t have enough time to coach, teach and train real estate agents on their team.
Team leaders are great real estate agents, but many of them make terrible coaches and mentors. They don’t take the time to invest into the real estate agents on their team.
Both of these problems are issues we are seeing with real estate agents who are leaving eXp Realty. Many were sold on the idea of leads and coaching, and ended up receiving none of those things.
When a real estate agent doesn’t receive good leads or value, they start to wonder why they’re paying the high commission splits that are part of real estate teams. Why pay a 50-50 commission split when there is no more value being provided than if you went alone?
Especially when there are high-supporting brokerages that will give their real estate agents a 70-30 split.
Are You Done With Real Estate Teams?
Real estate teams have their benefits. There are real estate teams out there that offer immense value to their real estate agents.
So, before you quit your current real estate team, you need to do a self-assessment to determine if you’re done with all real estate teams or if you just need to join a new team.
When done right, a real estate team can offer additional leads and training that you can’t get if you go solo as a real estate agent. For more experienced real estate agents, you can reach better economies of scale. For example, partnering with a team may reduce your overall costs for running your business and give you access to more tools.
Perhaps it’s not an issue in being part of a real estate team, but rather, the issue lies with your current real estate team. It might be worth joining another real estate team.
Of course, if you’re tired of not being in full-control of your real estate career, tired of paying high commission splits, unwilling to take the risk with another real estate team, or have larger goals, then a real estate team isn’t for you.
You’re better off going solo. For example, if you want to build your own real estate team, then you’re going to need to leave your current real estate team. The financial margins aren’t there for supporting a team when you’re paying a 50-50 split.
Another reason to leave a real estate team is if you’re tired of working as a buyer’s agent. I find that a lot of real estate agents who join teams are specialized buyer’s agents and they don’t get any listings. The leads that end up turning into listings, the team lead (the shark) comes in and wants to co-list on them with you.
Are You Planning On Switching Brokers, Too?
Okay, if you’re planning to leave a real estate team, you also have to ask yourself if you’re going to change brokers, too.
Seriously, don’t assume your current brokerage will be able to support you as a solo real estate agent.
Often, real estate agents that are looking for more support from their team lead need to switch brokerages. That’s because real estate brokers that can support real estate teams don’t have a ton of support for individual real estate agents.
Let me prove that statement based on financial economics. In order to have a real estate team, the team lead must have a high commission split, with a cap, from their broker.
For example, they might generate $500,000 in commission and only pay $23,000 in commissions to their broker. Companies that run on these kinds of models include Keller Williams, Remax, and eXp.
These kinds of brokerage models tend to attract a lot of real estate teams rather than create them.
A real estate broker that receives very little income must also lower their expenses in order to survive and generate a profit.
The easiest way to lower their expenses is to provide limited support. That means a lack of training lead opportunities, mentorship, or technology tools for closing more deals.
So, real estate agents that find themselves on real estate teams that are part of Keller-Williams, Remax, or eXp often end up needing to switch brokers, to a company like Exit, in order to get the support they need.
It might be hard, but leaving your real estate broker is a good idea when leaving a real estate team if you’re part of one of the brokerages mentioned.
Did You Sign A Contract?
When you joined a real estate team, you probably signed two contracts. One was an independent contractor agreement between you and the real estate broker. The other agreement signed was between you and your current real estate team.
If you didn’t sign an agreement with your real estate team, then you just have to worry about the contract with your broker.
Your agreements will spell out certain terms for leaving a real estate team or your brokerage.
For example, an independent contractor agreement can include a clause about client data and who owns it. The agreement may state that all team-provided leads and clients are owned by the team, and therefore, you can’t take the information with you and you’re not able to market to those leads anymore.
Take the time to read your agreement and if needed, seek legal counsel. There are always a lot of issues with enforceability when it comes to independent contractor agreements.
You don’t want to find yourself in breach of a contractor and open yourself up to legal issues.
Inform Your Team Lead
Once you’ve made a decision on leaving a real estate team, it’s time to inform your team lead. While you probably could pick up and leave in the middle of the night, you don’t want to burn any bridges. There might come a day when you have to work with them on a real estate deal.
Personally, I am a fan of writing a letter to inform your team lead you’re leaving. It gives you time to thoroughly think everything through and articulate your feelings and thoughts.
I find it’s better to write a letter than trying to speak off the cuff to give your notification.
Your letter should include an opportunity to discuss the situation further rather than a final end point. But, the letter makes it easier to have the dialogue and make the conversation productive.
As an example, you may need to work with your team leader to get everything switched over to the new real estate broker.
Prepare For Your Move
You need to set time aside to prepare for your move. This means downloading all client and lead data you’re allowed to, as per the agreement you may have signed. You also need to inform clients of your switch, as applicable.
A majority of the time a real estate agent on a team won’t be able to take clients with them. Those clients will stay and close with the real estate team. Depending on your agreement and your team lead, you may be paid a referral fee.
It’s all going to be a case-by-case basis.
Finding The Sweet Spot With Real Estate Teams
Every day, I speak with real estate agents — many buyer agents — that are looking to make a move to a smaller, more involved real estate broker.
These agents are looking for a team or broker with a leader that offers coaching, teaches lead generation strategies, provides administrative support, and also gives them warm leads.
This sweet spot for many real estate agents exists at a brokerage like Exit Realty.
A brokerage like Exit Realty sees the person behind the real estate career. They are not just a number.
There is a lot of value placed on developing the real estate agent. It’s one of the few brokerages where you will find strong leadership and a mentorship program.
Of course, you could join a small, more involved real estate team, but you will still have to pay high commission splits.
Instead, by joining a more involved brokerage, you can get everything a smaller team could offer, but a better split. At Exit Realty, all agents get a 70-30 split until they reach $100,000 in gross commission income for the year, at which point the commission split slides to 90-10.
If you’re interested in learning more about Exit Realty, discover the reasons thousands of real estate agents call Exit their home.
