Knowing whether or not it’s time to start or join a Real Estate Team is a tough decision. We are constantly in competitive sales mode, so it’s difficult to give room for a team. This article has some great advice on starting a Real Estate Team and making it prosperous.
“Tired of being a jack of all trades? Team leaders offer advice for getting started. Size up three models — the single assistant, the partnership, and the super team.
BY TRACEY C. VELT
Stephanie Vitacco was exhausted. “Three years into the business, I was working from 7 a.m. to 1 a.m. and still not getting everything done,” says Vitacco, a 19-year veteran with Coldwell Banker–West Valley Regional in Los Angeles. “I was doing about 100 transactions a year at that point, and I realized that I would either have to turn down business or get help.I decided to get help.”
Can You Afford It?
Like many high-octane sales associates, Vitacco turned to the team approach, hiring assistants and other licensees to enable her to grow her business without sacrificing customer service or a personal life. Vitacco’s first hire was another salesperson in her office who was winding down her career. “She sat at open houses, prepared ads, and processed listings into the MLS. She helped wherever I needed it,” recalls Vitacco. By 2006 Vitacco’s team had grown to six — including a listing coordinator, buyer’s agent, and office manager — and had closed 150 transactions.
Sounds great, right? More sales and more free time! But forming a team can seem like an overwhelming task. And many sales associates aren’t sure they can afford it.
“Putting together a team doesn’t have to stop you in your tracks,” says Bernice Ross, CEO of RealEstateCoach.com in Austin, Texas. “A good rule of thumb is to hire one person for every 50 transactions you do.”
A slightly more sophisticated approach to determining whether you can afford an assistant is to calculate your average net on each transaction, estimate the cost of salary (plus Social Security and other withholding if the team member will work as an employee), then determine how many more transactions you’d have to complete to pay for an assistant.
Kankakee, Ill.–based real estate trainer and coach Walter Sanford suggests yet a third method: Take out last year’s tax return and review the profit you reported on your Schedule C. Divide that figure by the number of hours you worked last year. Let’s say you made $100,000 and worked 2,000 hours. That means your hourly rate is $50. Ask yourself if all your activities are worth $50 per hour or whether you’d be better off hiring someone for $15 per hour to prepare listing packages and do mailings.
“An assistant will free you up to spend many more of your working hours on activities that are worth $50, such as lead generation and negotiating contracts,” says Sanford.
Costs will vary widely depending on your market and the exact responsibilities of your team members. In general, most administrative and marketing assistants and transaction coordinators are paid as hourly employees, making between $13 to $17 per hour, according to Sanford. In May 2005, the U.S. Bureau of Labor Statistics estimated the median hourly wage for administrative support positions at $13.10. Team members who hold real estate licenses and act as listing or buyer’s agents can also be compensated on a commission basis through the brokerage.
Still not sure you can make payroll? “When you first start building a team, you can offer a lower hourly salary and a percentage of commission or a bonus for each closed transaction,” says Leslie Ann Sherman, president of the Sherman Group at Realty Executives of Nevada in Las Vegas. “A friend of mine started off very small with only a $2,000 per month base salary and a $500 per transaction closing bonus.”
Sherman runs a 12-person team that includes buyer’s and seller’s agents, an office manager, and two transaction coordinators. Together the group closed 284 transactions worth $90 million in 2006.
“When I decided to hire an assistant six years ago, I knew it would be a scary leap to be responsible for another person financially,” says Teri Herrera, CRB, CRS®, with John L. Scott Real Estate in Bellevue, Wash. “I hired a virtual assistant part time and paid an hourly salary plus a closing bonus,” she says.
“Virtual assistants who do tasks such as marketing mailings or Web maintenance can also be paid on a per-project basis, say $200 a month for Web maintenance,” says Ross.
Vitacco and Sherman also offer paid vacation, holiday time, paid sick days, and other benefits for longer-term employees. “There are companies out there, like MyBizOffice, that will create an employment package for you that includes health insurance, profit sharing, and more,” says Ross. “They administer it, so if you want to create a benefits package, this is one way to do it.”
How to Build a Quality Team
Although there’s no one magic structure for the perfect team, most begin with some form of administrative support. “You want someone to handle the lower pay-off jobs such as Web marketing and transaction coordination. That leaves you more time to perform money-making tasks,” Ross says.
Exactly whom you add to your team first will depend on where you most need support. Before she hired her first assistant, Herrera sat down and built a plan. “I asked myself, ‘What jobs can I give this person? What am I comfortable delegating?’ Once I had a job description and specific duties,” she says, “I felt confident hiring someone.”
It’s important to keep your team tightly focused, says Fafie Moore, president and broker-owner of Realty Executives of Nevada. Moore works with more than 600 sales associates in her six offices, about 20 percent of whom work with teams. “In my experience, the best teams are made up of a listing coordinator, a transaction coordinator, a general administrative person, an office manager or team leader, and maybe two listing agents and two buyer’s agents,” she says.
Once you’ve solved the who question, your search for qualified team members begins. Most of the sales associates we interviewed found their team members by networking with others in the business or in their own office. “I rarely advertise for employees,” says Sherman. “I usually put the word out in my office and other sales associates refer people to me.”
“I found my golden treasure — my office manager — through Monster.com,” a job listing Web site, says Herrera. For a virtual assistant, check out REVAnetwork.com and IVAA.org.
No matter how you locate prospective team members, it’s important to have a clearly defined interview process. Begin by writing a list of questions you want to ask each applicant—experience, strengths and weaknesses, and education. Next, conduct a pre-interview with each prospect over the phone to get an idea of phone demeanor and general qualifications. “I try to get applicants to open up so that I can gain some insight into their personality and skills,” says Vitacco. She also has each applicant react to a situation, such as, “If someone called wanting the address of a property, what information would you give?”
To help ensure that new hires will fit into your existing team dynamic, involve other team members in the process. Sherman conducts at least three interviews—one on her own, one with her office manager, and the last with the entire team. “When you have a team, you want everyone to have a vote,” she says.
When hiring buyer’s agents, it’s important to remember why they joined you in the first place. “Most team leaders come from the perspective that [buyer’s agents] will generate business,” says Moore. “But that’s inconsistent with the reason most people want to join a team. These people are willing to give up income to join a team because they don’t want to generate business. They expect you to do it.” Likewise a listing agent may not want to be bothered with the paperwork needed to sell a listing and prefer to hand off the administrative work to other team members.
Ross suggests that you administer a personality profile, such as the DISC profile, to prospective team members. “You don’t always want to hire someone just like yourself. For example, if you need an organized office manager, you want to look for someone whose personality profile is strong in those areas,” she says. (To compare DISC profile vendors’ services and prices, search “DISC profiles” online.) “I also suggest they use the Real Estate Simulator
(www.realestatesimulator.com).” Ross pays about $70 an assessment. A wrong hire could cost you much more.
Making Your Group a Team
Whether you have two team members or 20, hiring is just the beginning of a team leader’s responsibilities. It takes good communications and strong systems to help a group of individuals meld into a successful team. Sherman meets with every team member weekly and her door is always open. “I help them make difficult calls and work out any situations they might have,” she says. Her team’s most common issue today is sellers who won’t reduce their price. “So I’ll call a seller personally and offer statistics and market data to help them make a decision. Many times, a call from me can make the difference.”
To track work flow and spot problems before they grow, Sherman relies on Track My File
(www.trackmyfile.com). She also checks communication logs “to verify that team members are touching base with clients at least twice a week, that paperwork is done in a timely way, and that feedback is being logged from showings,” she says.
“We have a handbook and rules that I review with all new hires. Everything is systematized,” says Vitacco. Her handbook and employment contract addresses details such as work hours, job descriptions, and vacation time.
“There’s a lot of liability when hiring a team. You have to outline expectations—who pays for what, what happens if that person is terminated,” says Herrera. “Part of my hiring process is to give the person a copy of my employment contract, which they’re required to sign if they join my team.” The contract outlines who owns the listings and what happens if a team member is terminated.
“We require that team leaders have agreements in writing with team members and with the brokerage to identify who owns the client and to what degree,” says Moore. “For example, I give you the Bob Smith lead, and you will pay me a referral fee. Then Bob gives you a referral; who gets that fee?” Moore suggests you work with your brokerage and a local attorney who specializes in employment contracts to draft a copy.
The broker is generally responsible for the actions of both licensed and unlicensed team members who are working on real estate transactions. For that reason, brokers should require teams to observe and abide by the same risk management and liability control measures established for the brokerage as a whole. Savvy brokers such as Moore recognize the risks and keep close tabs on team leaders. “Our larger teams are a priority call for us. We also work with sales associates to build a plan, establish job descriptions, build systems for checks and balances, and help them write a business plan for their teams,” she says.
In some cases, a broker’s liability may not extend to activities of nonlicensed team members who aren’t employed by the brokerage.
No matter what, you won’t build a team without a few missteps. “It’s like dating,” says Vitacco. “There have been times when I hired four or five people for a position before I found the one that clicked.” But once you find the right partner, a team can take you to a new level and build a whole that’s stronger than the sum of its parts.
Team Profiles: Single Assistant, Partners, Mega-Team
When Anne Rubin hired her first unlicensed assistant in 1994, she was ahead of the curve. “I didn’t know anyone who had an assistant, I just learned about it at a seminar and thought it was a great idea,” says Rubin, CRS®, GRI, associate broker with Century 21 Advantage Gold in Elkins Park, Pa.
“I didn’t have any time left in the day to increase my income,” she recalls. “My assistant freed me up by handling routine activities like preparing mailings, designing brochures, taking photos, and processing paperwork.” In one year Rubin’s business was up by about 10 percent.
Today, Rubin works with Desiree Long, a licensed, full-time personal assistant who helps her manage the day-to-day administrative activities as well as work with buyers, write and deliver agreements, and network with other sales associates. She made the shift to a licensed assistant because she realized she “really needed someone who could do anything I did. I was also able to let my assistant work with buyers while I focused on sellers.”
Rubin, who had $5 million in sales last year, pays Long a salary plus a bonus on transactions where she’s had a significant amount of participation. “I’ll pay a bonus if she’s done a lot of showings for a property, for example,” says Rubin. To record everything that happens with each transaction, Rubin uses Online Agent software. Long is networked into the program and keeps it updated. “We also meet once a week to talk schedules, and we talk every day so we don’t duplicate efforts,” she says.
“The biggest challenge in hiring an assistant is finding someone who clicks with you. This person is your right-hand person, and you must feel connected,” Rubin says. Rubin takes care, when she’s hiring, to use “a lot of situational questions, such as if this happens, how will you handle it? I also outline my expectations and ask interviewees what they expect from the job.”
Rubin says that working with one assistant is “working for me, so I see no need to change the way things are. From a personal standpoint, I’m stable and comfortable. I’m not taking floor calls. At some point, if I need more staff, I might look at that. Right now, I’m content with the way my business is going.”
Michele Peppe, CRS®, and Chip Harris worked together at Coldwell Banker Residential Real Estate in Naples, Fla. Both wanted to grow their business. And both recognized they had strengths and weaknesses in the business. So 10 years ago they thought, why not team up?
Peppe, who’d been in the business for 15 years when she teamed with Harris, recognized that his negotiating and people skills complemented her more analytical approach.
“Together, we balance each other out, and we were able to combine our databases and share marketing expenses,” she says. Peppe also thinks that offering a client two agents gives them an edge. “It gives clients more confidence in us,” she says.
One of the pair’s first steps was to form a corporation to limit their liability. Another was to hire a full-time licensed assistant to handle administrative duties. Says Harris, “She oversees all of our contracts and paperwork and is paid a salary plus a bonus. And any business she generates earns her a commission.”
“If you’re managing more than 15 to 20 listings and closing $10 million to $15 million a year, just managing the listings is a full-time job. We don’t want to get bogged down with administrative duties,” says Peppe.
Today the team consists of Peppe and Harris, both of whom list and sell properties, three additional sales agents (including a daughter of each partner), and two administrative assistants. They’ve seen their business triple in the last decade.
“We have people approach us all the time to become team members,” says Harris. “Our marketing director was working for the broker before she left to have a baby,” says Peppe. “We hired her with a part-time flexible schedule when she was ready to go back to work.” Such flexibility is another factor that can make a team attractive for some practitioners.
Managing the team can be a challenge, says Peppe. “But we’ve been quite fortunate. We run it as a business. We have team meetings, teach our team members business planning and time management, and give awards for higher levels of production. In fact, our broker told us he wishes that we trained all of his new agents in time management and business planning.”
Many brokerages don’t have the sales force Debbie Dogrul does. The sales associate with Long & Foster in Northern Virginia currently has 10 buyer’s agents, five listing agents, and eight administrative employees including listing and transaction managers, marketing directors, a receptionist, and a director of operations.
That’s similar to a small brokerage by any standards, which begs the question, “Why not become a broker?” “I’ve been so busy building this business that it isn’t even something I’ve considered,” says Dogrul. “I grew [the business] by 25 percent each year through 2005, and I don’t feel restricted in what I’m doing.” Add to that a broker with whom she has “a great relationship,” and you can understand why Dogrul likes things the way they are.
Dogrul generated all the leads for the 456 transactions her team closed in 2006. She hands leads off to her team members for follow-up. “We’re all networked together,” she says.
Running such a large operation requires planning and management. “You have to be organized and constantly track team progress,” says Dogrul. “You also have to be flexible enough to modify those systems to keep pace with transaction volume.” She meets with each team member weekly to review work. She keeps track of her transactions on an Excel spreadsheet.
Planning begins every July when Dogrul projects how many sales she expects in the next year and how that projection will affect her staffing needs. She reviews her sales progress monthly and adds to her administrative staff wherever she sees a need.
Dogrul never set out to build a large team. “When a need arose, I filled it,” she says. But what she lacks in long-range planning, she makes up for in training. “What makes our team work is my training program. We train new agents by having them work with each person in the office. It’s a very extensive, hands-on experience,” she says. She also tries to hire employees who are positive, motivated, and coachable and who enjoy working on a team.
Dogrul prides herself on making everyone happy. “I want them to love coming in to work and take pride in a common accomplishment. I treat them the way I would want to be treated.”
Her low turnover rate can attest to the fact that whatever she’s doing is working. “Only 7 percent of our team members leave of their own accord,” she says.”