What Is a Real Estate Team? Definition, Structure & Benefits

A real estate team is a group of licensed real estate agents and/or brokers who work together to successfully and efficiently generate leads, serve clients, and scale a real estate business. The structure of real estate teams varies based on state requirements and commission splits, and there are pros and cons to choosing a team structure rather than an individual agent career path. Read on to determine if starting or joining a real estate team is the right choice for you.

How Real Estate Teams Work

A real estate team consists of at least two licensed real estate agents who work together to grow their businesses. Realtor teams operate under the same name and branding, and combine expenses, marketing and lead generation efforts, and commission.

Teams can be made of licensed brokers, broker-owners, agents, or even real estate assistants who don’t have a license. Although assistants can’t work with clients in the field on real estate transactions, they can manage many other aspects of the business, like marketing, administration, and finances.

The Andrew Botticelli Team at Compass (Source: The Andrew Botticelli Team)

However, real estate teams are not the same as real estate brokerages. There are many state-specific requirements and restrictions for real estate brokerages, while teams are much more informal. In a real estate brokerage, there must be at least one managing broker, while real estate teams can be formed by agents under the same brokerage.

Whether you are considering becoming a real estate agent or just beginning your career, it’s vital to become familiar with all the options available to you. There are many differences between operating as a solo agent versus working within a real estate team, but both options require you to start with a strong foundation of education and knowledge.

Real Estate Express interface (Source: Accounting Institute for Success)

Through an online education provider like The CE Shop or Real Estate Express, get or maintain your real estate license with a thorough education, an easy-to-use education portal, and extensive study tools and support. Real Estate Express not only provides online education, but also includes exam prep courses, flashcards, question and answer sessions with instructors, professional development, and even a “Pass or Don’t Pay Guarantee.” Learn more about Real Estate Express and start becoming an even better agent today.

Visit Real Estate Express
Use Promo Code: FSB25 for 25% off

Real Estate Team Structure & Roles

Now that you know how real estate teams work, the next step is to identify team structures and roles. Other than a few basic agreements, the structure and makeup of each real estate team can differ widely. For instance, a real estate team can consist of:

• One broker and one agent (also known as a mentor/mentee team)
• A combination of licensed real estate brokers and agents
• Licensed real estate agents
• Licensed real estate salespeople, along with real estate assistants and operations team

Different team sizes and structures (Source: Homesmart.com)

---

There is no limit or restrictions on the number of people in a real estate team, but running a team with more than 20 or so members can be difficult. In fact, a research study by RealTrends showed that medium-sized teams with six to 10 members were the most profitable. Larger teams generated more sales, but their expenses also increased significantly.

For example, The Jim Allen Group of Coldwell Banker is the top-producing real estate team in North Carolina. Their team consists of multiple licensed brokers, agents, specialists, and non-licensed professionals. These members hold extremely valuable positions, like the director of sales and marketing, new construction listing coordinator, assistant director of home sales, and financial manager.

Real estate team with licensed and non-licensed members (Source: The Jim Allen Group)

Also, there may or may not be a real estate team leader, and they aren’t necessarily a broker. Most states have very few rules and restrictions for real estate teams, but make sure you thoroughly read your state’s laws to ensure that you abide by any rules.

For example, real estate teams in Maryland are required to designate a leader with specific qualifications. In New York, teams have specific advertising requirements. The full licensed names of the team members must be included in the team name, or the team name must be followed by the full name of the brokerage and have “team” in the name.

Depending on your state’s requirements and business structure, the roles of team members can include:

• Team leader: An agent or broker who leads the team and makes final business decisions.
• Real estate agents (buyer and listing agents): Licensed salespeople who work with clients may or may not have specialties within the team, like working exclusively with buyers or sellers.
• Marketing coordinator: Manages and leads all the marketing efforts, including inbound and outbound marketing and branding.
• Transaction coordinator: Manages important administrative tasks for each transaction, including communicating back and forth between clients, agents, and partners, completing and organizing paperwork, and establishing efficient systems and processes.
• Operations manager: Oversees processes and tasks in all areas of the real estate business, including marketing, transactions, client care, and finances.
• Real estate assistant: Takes on a variety of tasks that allow salespeople to focus on clients, including responding to emails, scheduling appointments, and mailing or delivering documents.

Commission Splits & Compensation for Team Members

In addition, an essential part of the team’s structure depends on its commission split agreement. Commission splits are set by each real estate brokerage, but teams in real estate must also split the remaining commission among themselves. This agreement may depend on each team member’s title, experience level, or the number of members. Keep in mind that the monetary structures vary greatly depending on the team:

• Team leader: May receive anywhere from 25% to 50% of commissions per transaction, with or without commission caps.
• Real estate agents (buyer and listing agents): Commissions can range from a 50/50 split to a 75/25 split, and may include commission caps.
• Marketing coordinator: Typically paid by a flat per-transaction fee or hourly.
• Transaction coordinator: Typically paid by a flat per-transaction fee or hourly.
• Operations manager: Typically paid by a flat per-transaction fee or hourly.
• Real estate assistant: Typically paid a base salary; may receive a percentage of the commission.

For instance, a mentor/mentee team might split the commission 60/40 or 70/30, while a team with four experienced agents may split the commission equally. Some real estate brokerages leave this decision up to the team members, while others have set models.

For example, eXp Realty provides four clear-cut real estate team commission split structures: self-organized teams, standard teams, mega icon teams, and domestic teams (for spouses/significant other partnerships). Within these structures, several team leaders and members use a 75/25 split until they reach a commission cap ranging from $0 to $16,000.

Team structures at eXp Realty (Source: eXp Realty)

However, a large percentage of real estate teams use a simple 50/50 split on all transactions. This is the simplest strategy that keeps everyone on an equal playing field. Use the commission split calculator below and input the property’s sale price, commission earned from the sale, and the team commission split to see what you can earn.

Example:

You and your team sold a home for $250,000 and collected a 3% commission from the sale. If you are receiving a 50/50 split within your team, use the following equation to calculate your commission collected from the sale:

$250,000 x 3% x 50% = $3,750 Commission Collected From Sale

Pros & Cons of Joining a Real Estate Team

For most new real estate agents, deciding whether to work as a solo agent, join a team, or start a team can be an overwhelming decision. There are benefits and drawbacks to each career path, so it’s important to carefully consider what may be the best fit for your needs.

A few of the benefits of working on a real estate team include:

• Training and mentorship: For new real estate agents, working closely with someone experienced can skyrocket your success. Experience is the best teacher, and you’ll simultaneously grow your network, increase leads in your pipeline, and learn how to make sales.
• Lower individual expenses: As a team, all expenses are split between members, allowing you to combine valuable resources. Even new real estate teams may be able to hire a real estate assistant, which can help scale the business quickly and efficiently.
• Build a larger sphere of influence (SOI): When you’re part of a team, you’ll be introduced to a larger number of members of the community, potential clients, and business connections. This is ideal for brand-new agents who don’t have a large community in the local area.
• Flexibility: When you go on vacation as part of a team or need a day off, it’s relatively easy to hand off any appointments or tasks to another team member. This provides more flexibility in your day-to-day life, without sacrificing clients or sales.
• Higher sales volumes: Since teams have more agents who are actively generating leads, clients, and sales, they can accomplish bigger goals and close more sales than working individually.
• More efficient marketing and lead generation: Combining resources with other team members means that you can get more mileage out of your marketing and lead generation efforts.

For example, brand-new real estate agents typically don’t have much capital to invest in marketing or productivity tools. However, as a team, multiple agents can invest in high-quality products that provide specialized tools for teams in real estate, like Market Leader. It provides website templates, automated email campaigns, a robust customer relationship manager (CRM), and even exclusive leads. Learn more about how Market Leader can elevate your team’s success.

Managing real estate team productivity with Market Leader
(Source: Market Leader)

Visit Market Leader

To determine the best career path for you, it’s best to evaluate your personal strengths, weaknesses, and goals—and identify your highest priorities. For instance, if you want to be a high-performing agent but don’t want to miss your kids’ school plays and events, being on a team might be the best choice to increase your sales with some flexibility. On the other hand, if building a personal brand is important to you, being part of a team is most likely not the best fit.

A few drawbacks of joining a real estate team include:

• Lack of individual branding: A successful real estate agent team will effectively build brand awareness, but it may not include your individual name, photos, or even your unique strengths. Instead, you’ll be focused on building a strong reputation for the team as a whole.
• Making business decisions within a team: Many real estate agents have strong entrepreneurial spirits, and having to depend on and agree with multiple people can be a challenge. Real estate teams depend on strong collaboration, so they aren’t ideal for highly independent individuals.
• Smaller commission splits: Although real estate teams as a whole may generate a higher number of sales, your individual commission split will be lower. Make sure you research how real estate commission splits work to be well-prepared to generate the income you want within a team.

Example of a large, high-performing real estate team (Source: The Rhodes Team)

For example, The Rhodes Team of Berkshire Hathaway HomeServices is the top-producing real estate team in Texas. They’ve won many awards year after year, but most agents within the team don’t build a unique, individual brand or reputation in the community. For some salespeople, being able to advertise under the umbrella of a team is actually ideal, but for others, it feels restrictive. Make sure you evaluate your personal desires, goals, and priorities before you start or join a team.

Fiverr branding specialists (Source: Fiverr)

Being on a team or working independently will change almost everything about the way you run your business, but some elements will remain the same. Whether you operate as a team or an individual, make sure that you create a strong real estate brand with a professional logo, colors, and marketing assets. With Fiverr, you can find a real estate branding specialist for as little as $5, and get a logo, branding kit, and website templates in a matter of days. Search Fiverr for branding and marketing specialists right now.

Visit Fiverr

7 Steps to Build a Real Estate Team

Now that you’ve read through this article on “what is a real estate team?” and learned about the structures of a team, you can make an educated decision about whether being part of a team or building your own is the best fit for your business. If you’re looking to join a team, do a quick Google search for job postings hiring real estate team members or visit brokerages by you to see if anyone is looking for additional team members.

However, if you are an already established agent and wish to build a team around you, you will have to create your team from scratch. Your success as a real estate team leader will depend on how well you plan, set goals, and establish systems. To build a solid foundation for success, make sure you know the steps to build a strong real estate team. These include:

1. Honestly evaluating your professional and personal strengths and weaknesses
2. Determining your role within the team
3. Creating a real estate business plan
4. Clearly outlining your budget
5. Review your business and budget
6. Establishing systems for lead generation, nurturing, administration tasks, and commission splits
7. Hiring team members (including agents, specialists, and assistants)

Bottom Line

Questions like “What is a real estate team?” and “How do real estate teams work?” are extremely common for new and aspiring real estate agents. Real estate teams are a great alternative to operating as a solo agent because they can help you make more sales, build a larger network, and learn firsthand how to grow and maintain a successful business. However, it’s essential to evaluate the best career path for your individual needs and start with a strong plan.