The results of a home sale can be determined in a few hours, as many bidders found out the hard way over the last two years.
A real estate team is how two or more agents can combine their resources, time and knowledge in order to provide a better valuable real estate service. In the past the National Association of Realtors has estimated that only a quarter of realtors are growing in popularity.
Real estate teams benefit all parties involved in the transaction – buyers and sellers do not have to wait on one specific person, and agents get a team environment and improved work-life balance. They function differently from the typical lone real estate agent.
How do real estate teams work?
There are many ways a real estate team can work and operate. These can either be an individual agent or broker with several hired Realtors or agents under them. They may really be a group of real estate pros working on their own but then combining their office space and marketing materials. Or they can be a co-equal group of people that jointly has total command over a transaction.
Different states have different legal definitions for real estate teams. In Connecticut, a ‘real estate team’ is defined as a group of two or more licensed real estate brokers or real estate salespeople who are associated under the same sponsoring broker, who act as agents for one or more buyers or sellers, and who engage in advertising under a common team name.
Either way to a real estate team, “Members work together, coordinate and support each other with every client,” according to Alex Capozzolo, co-founder of Brotherly Love Real Estate in San Diego, Calif.
Dawn McKenna, a real estate broker and owner of Dawn McKenna Group in Illinois, Florida and Michigan, says teams can be “tiny and tight-knit” with only a couple of members or a large with a “full-fledged, highly structured entity that is organized and operated like a law firm or investment bank.
The smaller teams are probably going to be little more than the licensed agents themselves and maybe a couple of staff in an administrative role. On the flip side, a big team is probably made up of lots of real estate agents, real estate brokers and an “entire staff who might do everything from ‘accounting, marketing, transaction support, insurance’ and legal,” according to McKenna.
Small teams vs large teams
Both of these team types have their pros and cons. If you are a small team there is probably one point person with others as back up or need be. That means you can get a in convenient that is tailor made for you but less of the efficiencies or offerings/services a large team can provide.
On a larger team, you might have one person as your point of contact who checks in and leads you through the whole process, but you are going to be working with specialists for the majority of the project. The person who is showing you properties will not be the same person who writes up your offers or requests your documentation. While this division of labor might be quicker, it can leave you feeling passed from pillar to post and repeating yourself too much.
Real estate firms and commissions
Remember, as the buyer or seller, you likely pay the same commissions to your real estate agent, whether they are a solo agent or a team. However, if your agent is on a team, they may get a smaller commission.
Though every team structures compensation differently. “With our team, we agreed on a consistent commission percentage for each member while offering a 10 percent bonus to any passerby member who made a sale,” states Capozzolo.
There are other teams that share commissions equally after expenses, or perhaps charge a flat fee, and there are still other teams that utilize a 25/75 to 75/25 split, in favor of the team or the agent who originally procured the client.
The client should not be concerned with any type of shared commission arrangement, in any case. If you feel that you are being passed over or not being well-represented because the agent in your deal is overextended on another team duty or overhead charge – you are either attached to the wrong agent, or your agent is at the wrong team,” McKenna said.
Advantages of using a real estate team
When a real estate team that functions and works effectively will be able to combine experience, time, and resources in order to cater to you better.
Buyers will have more research, agent previews, showings that fit within their schedules because the members are all working together, says McKenna.
Sellers benefit from having more realtors working to help them sell, which results in a greater sophistication, broader marketing of your home, meaning your property may be marketed to a larger audience because more potential buyers are seeing it.
No one can be available 100% of the time, so having another expert at the ready who has the correct information can be really, really helpful.
Disadvantages of using a real estate team
The biggest con of partnering with a real estate team, naturally, would be the potential that they don’t work well together — left-hand-doesn’t-know-what-the-right-hand-is-doing syndrome. This deal may very well be the most significant transaction in your life, and you do not want a dropped ball or miscommunication to interfere.
Even with a cohesive real estate team, you might be craving the more specialized attention of an individual agent who knows (or should know) every minute detail of your search or property. Or perhaps there is a lack of clarity over who can manage what. What you do not want is 10 names on your speed-dial, or have to keep explaining specifics to different people.
How to build your real estate dream team
Creating a Real Estate Dream Team is like selecting an awesome real estate agent. First figure out if you want to go with a bigger or smaller team and then begin reading reviews on the top teams in your area. Interview a couple people from some of the top-rated teams.
When you interview them, inquire about how selling or buying would work if you hired them. See if their team is structured as equals – do you get a sense of the way they work? A rival team maybe? How are duties divvied up? Is everything you could possibly know about your listing or your search known to everyone, or are people assigned designated responsibilities?
Ask for data about the team’s “deal volume, pricing accuracy, time on the market, network connections, and social media reach, and make sure they demonstrate real success,” McKenna says.
After you decide on a team, you want to make sure you know who is taking responsibility for selling or searching for your home. And then, if there are questions or problems, who ya gonna call/text/email? If they aren’t there, then who is second on the list?
FAQs - How do real estate teams work?
Is using the same real estate team as the homeseller a way for a homebuyer to save money?
You won’t save any money by using the listing agent for the home you’re buying, because the seller pays the agent’s commission. In almost every situation, when buying a home, to determine a price, negotiate a purchase, or secure a purchase, you should work with an agent or agent team on your behalf.
Are a real estate partnership & a real estate team the same?
It can be, but not always. In a partnership the agents are often considered equal, though they may share commissions differently. You also may hear the term “real estate partnership” to describe a legal business partnership among a group of investors.
How Do I Locate a Good Real Estate Agent Team?
Agents and teams should be experienced with the location you want to purchase and the styles of homes you are looking to purchase. For some insights, you can browse through some listings and also take notice of which agents are selling homes in your area. But even then you won’t be sure of quality – get recommendations from your neighbors, and online neighborhood / local groups for people others have used and trust. Conduct interviews with a few different agents or teams, or for if you are listing a home, make appointments for potential good agents to give you listing presentation.
