Build a Real Estate Team
Instructor: John Henderson JT@grar.com
Finally, let’s consider the process of hiring team members. What criteria should be used to make the decision to add another person to the team?
Here’s 5 questions to help make guide that decision:
Are you receiving more leads then can be adequately handled?
Are you feeling burned out by handling too many different tasks?
If you add team members, will there be enough work to keep them busy?
What level of revenue is reasonable to add another person to the payroll?
What extra benefits will be received by adding another team member?
Here’s one way to structure team growth:
Set revenue goals (or number of transaction closings) as triggers for hiring additional team members. Every additional $3M in sales will generate approximately $100,000 in commissions. Also, if the average home sells for $250,000, then each additional $3M represents 12 more homes sold each year.
$0 - $3,000,000 in home sales (0-12 transactions)
Most solo agents can handle a workload of 12 homes (or $3 million) each year by themselves. Usually, this is a mix of listings and buyers as well as handling all the marketing and paperwork that goes along with this volume of work.
$3,000,000 - $6,000,000 in home sales (12-24 transactions)
First Hire – an Administrative Assistant
When real estate agents begin to get busy, they should hire assistants to help with contracts and paperwork. Once an assistant can no longer keep up with the additional work, it is time to consider hiring additional agents.
$6,000,000 - $9,000,000 in home sales (12-24 transactions)
Second Hire – a buyer’s agent
Hiring a buyer’s agent multiplies “feet on the ground”. Choosing the right agent can offer your team exponential growth. Typically, when you have reached a point of generating at least 30 new leads in a month, it is time to consider hiring a buyer specialist.
$9M - $12M in home sales (24-36 transactions)
Third Hire – Listing Coordinator
It’s time to promote your administrative assistant, hire another and split their responsibilities into two distinct roles: Listing Coordinator and Escrow Coordinator.
$12M - $15M in home sales (36-48 transactions)
Fourth Hire – Buyer’s Agent
Now that you’ve strengthened your support staff, it’s time to add a second buyer’s agent.
As your team continues to grow, hiring will alternate between adding support and selling team members. If team compensation is based on salary plus commission splits, everyone has a vested interest in deciding when to add new members.
Also, remember there may be alternatives to hiring more members. Virtual assistants and newer technology are additional ways to fill service gaps.