4 Reasons Why Building a Real Estate Team Is Necessary for Survival In Today's Economy While flying solo may seem appealing, there's more to gain by putting together a strong team in the real estate world.
By Tracy Cousineau Edited by Ryan Droste
Opinions expressed by Entrepreneur contributors are their own.
While there may be some glamour in being a lone wolf, working closely and collaborating with other people in your field arms you with additional resources, insights, support and multiplies your working potential. When you open a real estate brokerage, you can make more of an impact and see bigger sales when you have some help.
As with any business, there are risks involved and a mantle of responsibility to wear. With careful planning and a strong team, a real estate agency can be a success.
As the owner of a real estate brokerage, an entrepreneur can set proven organizational strategies, churn out compelling marketing materials, reduce individual liability and leverage an expansive network that agents can draw from to bring their deals to fruition. Each of these elements is costly, in both time and money, and critical to individual agent and overall organizational success. Most importantly, brokers assume risk and responsibility.
In our post-pandemic world, risk is absolutely top of mind for industries across the globe. Between the new, stringent safety protocols and regulations that have been implemented for showing homes and the economic uncertainty surrounding long-term implications of the lockdown, real estate agents are facing fresh, unforeseen challenges in their work. Sure, the rapid rollout of vaccinations bodes well for an imminent return to some semblance of normalcy, and the economy appears to be speeding up, with unemployment dropping and the job market spiking. According to Realtor.com's 2021 Economic Overview & Forecast, lower mortgage rates coupled with greater flexibility to work remotely have also signaled an increase in first-time homebuyers this year.
Related: 2021 Home Buying Trends in the U.S.
While these forecasts are both timely and hopeful, we must acknowledge that we are still likely on the cusp of another real estate bubble akin to what helped push the country into the Great Recession of 2007-'09. Home prices are rising rapidly due to high demand and competitive property bids; this is great for sellers but could push prospective buyers out of the market. With most major cities having been hit hard with long-term lockdowns, we've seen some of our biggest markets take the brunt of a mass exodus.
Below are just a few of the many pressing challenges and uncertainties that face a realtor.
1. It's much harder to hunt hungry
Starting a real estate practice is a risky juggling act that requires hard work, major time and monetary sacrifice, research, resourcefulness, troubleshooting, and it can take a long time to see any real ROI. While remote technology and digital databases have reduced the need to travel to homes to do onsite assessments or preview locations, they've also increased the speed and ferocity with which an agency owner and team members must work to keep up with the ever-increasing and evolving competition. In reality, more than 80% of real estate agents fail or fall out of the business within the first five years because of the heavy workload and long sales cycles.
As the owner of the agency, you have the ultimate responsibility for your team, but you don't have to attempt to do everything on your own. The same thing that you tell prospective team members about how being part of an agency frees them from administrative, technological, and marketing burdens applies to you as well. You need to share the workload and focus on what you do best, leaving yourself time to focus on agency growth and helping your brokers to sell and grow.
Related: This Is Why You Should Be Investing in Real Estate Right Now
2. You will exhaust your own network
When a person first becomes a real estate agent, they generally reach out to friends, families, colleagues and personal contacts to advise them of their new career path and to start taking on clients. While this is a great start for referrals, most people in one's social and professional circles are not in the market for a home, and you will quickly exhaust this sphere of opportunity. Once this happens, it is time to engage in intensive marketing and net-new networking activities for lead generation.
Marketing activities can span paid advertisements, thought leadership articles, conference participation and social media postings. It takes time to establish a trusted brand, and all of these factors will help drum up inbound leads that are then dispersed amongst the brokerage's agents equally.
3. Reputation and resources skyrocket revenue
I've personally witnessed agents go from 0-50 transactions (and from $45-$175,000 in annual income) in under one year simply by joining a reputable team. Through the endless resources, coaching, collaboration and cross-promotion available at a brokerage, agents can rapidly expand their footprint, sales funnel, close ratio and overall revenue — all while limiting personal overhead costs and maintaining a more sustainable work-life balance.
4. The bonuses of joining a brokerage team for new and growing agents are matchless
If you as the business owner and pack leader encourage strategic thinking, creativity and hustle among team members, you will create intrapreneurs who will be passionate innovators, creating a win-win situation. The benefits of a brokerage for new and growing agents are matchless.
Even as part of a team, real estate is hard work. It's all about building relationships and trust as you help clients to find their dream home. Owning and being a brokerage team member is beneficial to all involved due to the shared risks and rewards that come from teamwork. Real estate entrepreneurs can build a business by offering a productive place for brokers to be part of a team in order to build a successful career. If you as the owner offer a supportive place for them to be, you will all succeed.
