Are you considering joining a real estate team, and you’re wondering what questions to ask before joining a real estate team?
Almost every agent, at some point in their career, has to make the decision to go solo or join a real estate team. Some do it before launching their career, others do it within a year of being in real estate, and others choose to forever remain as a solo agent.
If you’re thinking about joining a real estate team and you’re trying to find the best team for you, then read on. In this post, we’re covering what to look for when joining a real estate team and the questions to ask to discover if a particular real estate team is right FOR YOU.
Let’s go.
An Even Exchange Of Value
Before I dive into the list of specific questions every agent should ask before joining a real estate team, it’s important to think about the objective.
Why bother asking any questions prior to joining a real estate team? What are we hoping to learn or discover?
You should be asking questions so that you can find the best real estate team for you AND one that creates an even exchange of value.
That’s the key phrase: an even exchange of value.
Let me define this term.
An even exchange of value between a real estate agent and a real estate team occurs when a real estate team provides benefits, such that the cost of those benefits are equal or less.
In other words, the benefits of being on a real estate team should be equal or greater than the cost.
Benefits Of Being On A Real Estate Team
With the right team, there can be a number of benefits on a real estate team. A majority of them are broken into four main categories:
- Leads
- Training
- Lower Expenses
- Culture
The most obvious reason agents chose to join teams is for the leads. Typically, a real estate team has leads to give to the agents on their team.
This is great for a new agent who isn’t able to produce enough leads on their own or have the money to generate enough leads to make a living in real estate.
Second, some real estate teams offer additional training opportunities or more individualized, mentor-like training. Third, some teams offer to pay some of the costs associated with being a real estate agent, such as MLS fees or desk fees.
Lastly, a certain number of agents join for the culture. It’s too lonely for them to work alone. Instead, they would rather partner and work with someone.
It gives the agent someone to build a close working relationship with. Otherwise, being a solo agent can, at times, feel lonely and isolating.
Disadvantages Of Being On A Real Estate Team
The major disadvantage boils down to the commission splits. An agent on a team is often making 40 percent or less of the gross commission income, or GCI.
Example: let’s say an agent sells a home for $250,000. The total GCI on the transaction is $7,500. The agent on the team has a 50-50 split prior to the brokerage taking their cut at 80-20.
So, the agent gets $3,750 and the team gets $3,750. The agent then splits the commission with their broker and is left with $3,000 or 40 percent of the gross commission income.
Financial costs of joining a team outweigh the benefits for many real estate agents. Since the financial cost is high for joining a real estate team, it’s important to ask the right questions before joining a real estate team.
You need to make sure you’re getting enough value and benefits.
It’s All Subjective
You have to understand that the exchange of value is all subjective. At the end of the day, whether you’re getting value from a real estate team is dependent on what you value in your real estate career.
For example, the new agent with a marketing background or a large sphere of influence won’t place much value on provided leads. Contrast that to a new agent who just moved to the area six months ago and doesn’t know anybody.
These two agents are willing to pay dramatically different amounts for provided leads.
Another example is an experienced agent who places little value on the training provided by a real estate team.
Value Tends To Decrease
The value of being on a real estate team often decreases with the longer you’re in real estate. It won’t necessarily decrease the amount that you want to quit a real estate team, but it happens.
I’ve seen many agents start out on a team and within a few years they want to quit the real estate team. Go out on their own.
As the years go on, most agents become established, they generate their own leads and they don’t need as much training.
They factor in the benefits they’re getting by being on a team — not much — with the commissions they are paying to the team leader, and realize it’s just not worth it.
Questions To Ask
Marketing & Lead Questions
When asking questions about leads and marketing, you want to discover the quality of the leads, number of leads available, and conversion rates. Your goal is to figure out your potential earnings by joining this real estate team.
The team that offers more high quality leads, the better.
Look Out For: There are some real estate teams that operate on what I refer to as the “bottom-feeder” model. This is where the team lead takes all of the good, high-quality leads and gives the agents on their team the scraps. The leads that are cold, have a longer sales cycle, and are low quality.
Sure, you’re getting leads under this model, but the quality is so low that you’re putting in a lot of work for minimal effort.
Here are some marketing and lead questions to ask before joining a real estate team:
- How do you source your leads? In other words, where do the leads you provide agents on your team come from?
- While I’m on your team, do you expect me to generate my own leads?
- Based on your current numbers, how many leads will you be able to hand off to me and that I can work with?
- What’s the average conversion rate of the leads for the agents on your team?
- How far out are these leads from converting into a closed sale? Are they red hot leads or do they take a few months of nurturing?
- What do you have in place to help me convert leads — from a CRM, to sales scripts, to a sales process follow up system I can follow?
The best real estate team is one that sources leads from multiple sources, gives you some high-quality leads, and has a system to help you work those leads so that they close.
Money Questions
The money questions cover your commission splits and associated expenses. Some real estate teams will cover your monthly expenses, like desk fees or MLS fees.
For a new agent, this is great. One of the main reasons new real estate agents fail is because of cash flow. Too much money is going out and not enough is coming in fast enough. So they quit.
Plus, it’s worth asking about any retirement or health benefits. Some teams have built retirement plans and are able to offer other benefits.
Look Out For: The real estate team that has a high commission split and charges a fixed-commission split regardless of the lead source.
For example, it doesn’t seem fair for a team lead to take 50% of a split if a client comes from your sphere of influence. Sure, for a Zillow lead, it makes sense, but in the case of your sphere of influence, you would have made that transaction regardless of the team lead and you brought most of the value to that transaction.
Here are some money questions to ask:
- What are the commission splits on your team? How do they work?
- Do commission splits ever change? If so, how? Will my split go up based on production, years on the team, etc?
- Do commission splits vary by lead source, like sphere of influence versus team-provided Zillow leads?
- What expenses does your team cover for me? Am I still responsible for my desk fees and MLS membership fees?
- Do you have any team benefits like a retirement plan I can participate in?
I believe the future belongs to the real estate team or brokerage that can figure out how to offer a base salary with benefits that is supplemented with commission pay based on sales metrics.
Given current economic conditions, the industry is going to be forced to adapt to some kind of model like this.
Training Questions
For the training questions, most agents are focused on mentorship or more detailed training. These are definitely important and worth asking about, but you want to discover if the real estate team you’re joining offers additional or unique training that isn’t offered anywhere else.
As an example, maybe the real estate team you’re planning to join has specific access to training videos by real estate coach Tom Ferry.
Look Out For: There are some team leaders that are like a seagull mentor. You can’t find them when needed. They swoop in to say something destructive and then swoop out. These team leaders are often too busy to make sure you’re getting the proper training and mentorship
Here are some training questions to ask:
- Do you have a dedicated training plan for new real estate agents? If so, what is it?
- Do you offer any more training on top of what the broker offers or do you rely on the broker to train me as a new agent?
- Will you personally help and mentor me? Are you able to go on listing appointments with me, for example?
- What additional training opportunities are there with your team? Especially for completing my required continuing education?
Takeaway
Joining a real estate team has its benefits and disadvantages. To discover the right real estate team for you, ask the right questions. We went over questions to ask before joining a real estate team.
All of the questions have the goal of discovering the value that is offered by a particular real estate team. To make a real estate team work for you, there needs to be an even exchange of value.
The benefits of joining a real estate team must be greater than the cost. Otherwise, you will find yourself unhappy and wishing to quit your real estate team.
Keep in mind that value is subjective. Along the way, ask yourself, “what do I value?”
