6 Real Estate Team Structure Template Ideas

Many real estate agents have the ambition to start their own team.

It boosts their earning potential, and it’s also a low-risk way to develop the skills and experience that they’ll need to one day open their own real estate business.

In fact, 80% of realtors claim to be more productive and successful when they’re part of a real estate team, while 76% say that being on a real estate team earns them a higher income.

It can also help busy agents who are struggling to maintain a good work/life balance.

But building a real estate team can be difficult to get right. Who should you hire? How much should you pay them? Do you employ transaction coordinators directly or get a freelancer?

This article explains everything you need to know about starting your own real estate team. It also provides several team structure template ideas. Each one suits a different-sized team and way of working.

When Should You Start a Real Estate Team?

Deciding to start a real estate business isn’t a decision to take lightly. You’ll be responsible for other team members’ livelihoods and you’ll also have to start managing people.

There are a number of factors to consider that can be grouped into three main categories.

Sales volume

The first and most obvious thing to consider is if you are making enough sales to justify starting a real estate team.

Most agents can comfortably handle roughly one transaction per week. You need to make at least 30 deals annually—with increasing numbers—to justify employing someone.

Ask yourself, “Is my lead generation suffering because I spend too much time servicing clients?” If the answer is “yes”, then it’s time to recruit new team members.

You should also check the going rate for staff and your business finances to make sure that you can actually afford to employ someone.

Are YOU ready?

When you start a real estate team you have to be the team leader. Many agents are unprepared for the level of personal transformation that’s required to do this.

You can’t simply hire someone and expect them to start generating leads and commissions for you.

As a team leader, you’ll need to:

Be ready to develop a real estate team business plan.
Hold each team member accountable for meeting targets and fulfilling their roles.
Mentor your real estate team and help them to develop their skills and careers.
Help solve problems in the team.
Be tough yet empathetic.

What is your motivation?

You should also consider why you want to start a real estate team, what you want to achieve, and where you want it to go.

Here are some common reasons:

You’re a high-performing agent

If you’re bringing in more leads than you can handle, then starting a real estate team is a great way to boost your earning potential.

It’s also good if you struggle with certain aspects of your role. For example, if deals keep falling through due to missed deadlines, you might benefit from having a transaction coordinator on your team.

Family is important to you

If you want to spend more time with your family, starting a real estate team is a good way to split your workload with others.

Alternatively, you could make your real estate team the family business. Many real estate teams have a husband and wife, or parent and child partnership at their core.

You want a more convenient arrangement

Some real estate teams come together naturally. Perhaps two agents working in a highly competitive niche decide to work together to get a larger share of the market. Or maybe two agents have been sharing leads for some time and it makes sense for them to start working together.

Three Key Rules for New Real Estate Teams

There are a few common mistakes that many real estate teams make when starting out. This section provides three tips to help you avoid these pitfalls.

Focus on leads

Your real estate team must be a lead generation machine from day one. Otherwise, it won’t be successful.

Think about it, why would good agents want to join your real estate team if they aren’t getting more sales opportunities than they would from working alone?

Plus, if you employ people and pay wages then you need to keep revenue flowing. Your agents should have a constant flow of leads so they are always working at maximum capacity.

Operations are key

Most real estate teams are divided into two distinct sections: operations and sales. Operations consist of back-office support such as admin staff and transaction coordinators. Sales are the people who go out and meet clients—like your agents and showing assistants.

The mistake most agents make when starting their own real estate team is to immediately take on new sales staff.

They do this because it’s less risky than employing admins. Real estate agents only get paid once they make deals, whereas admins need to be paid from day one—whether you are making sales or not.

You should employ operations staff before you take on new agents.

Why? Because the whole reason real estate teams are more productive is that they have the support that allows each member to work more efficiently.

Operations provide the bedrock of that support. They take the paperwork, lead generation, and other activities off the agents’ hands. This allows agents to focus on selling and be more productive.

Your role is to lead

Some agents start a team for the sole purpose of generating leads for themselves and boosting their own sales.

This makes sense—selling is an agent’s natural instinct. But you’ll struggle to hold on to good team agents if you do this.

For your team to succeed, you need to start thinking like a team leader. Here’s the approach you should take:

Start handing leads to agents regularly—ensure they get more from you than they’d generate alone.
Train team members to do their jobs better.
Provide targets and accountability to keep the team productive and focused.

What Commission Split Should Your Team Have?

The big question in a team is how much you should pay staff and agents.

Generally, the more back-office support staff you have, the lower the agent commission is.

That’s because the real estate agent will be charged a higher brokerage fee on their gross commission which pays the support staff salaries.

The trade-off is that agents with good back-office support should be able to handle far more deals and so their potential earnings are higher.

You should spend around 12% of your gross commission income on your admin roles.

6 Templates for a Successful Real Estate Team

Below we outline six successful real estate team templates.

You can choose one that best suits you. The first two on our list are “starter structures”. These are aimed at agents starting a team from scratch. The others are larger team structures that you may wish to build toward.

Traditional—Small

This real estate team structure is the usual way agents start a team. You’ll act as a team leader and direct operations and sales. If you are in a partnership with another real estate agent or family member, then you could both act as lead agents.

This real estate team structure will likely take a few years to set up.

Here’s the order you should follow:

Hire an admin to handle listings, contracts, closing, and all the paperwork in between. This frees you up to do more sales and generate more leads.
Soon you’ll be producing more leads than you can handle. Now it’s time to bring in your first buyer agent. You will act as the listing agent.
When you start to produce more leads than you and your buyer agent can handle, hire a transaction coordinator. They don’t have to be licensed to begin with. They can take over the paperwork.
After some time you’ll once again have more leads than you can handle. Now it’s time to hire more buyer agents. You’ll continue to handle listings.
This model could continue to grow indefinitely. However, if you find that you are getting more listings than you can handle, then it might be worth considering one of the larger real estate team models described in this guide.

Commission split

This real estate team structure is admin-heavy; therefore, you’ll need a commission split of around 50/50. For this to be profitable for your agents, you need to ensure that your admins and transaction coordinators are handling as much of the process as possible.

Pros

Handing off the admin tasks makes agents more productive.
You can focus on high-value listings.
Excellent growth potential.

Cons

You’ll need to generate steady leads to support staff wages.
More experienced agents won’t want to be limited to buyer deals and lower commission rates.
It might not be suitable for a low-volume real estate market—for example, in rural areas.

2. The Mentor Structure

The mentor team structure model is an alternative to the traditional structure that is less risky because you don’t employ anyone. It’s also fairly informal.

An experienced real estate agent supports a small number of inexperienced agents. These recruits usually leave after a couple of years for a team or brokerage that offers them better terms.

Each real estate agent is typically responsible for generating their own leads, doing paperwork, and closing deals.

The mentor usually provides advice and support, as well as targets and commission payments. There is no admin or transaction support.

Commission split

Under the mentor structure, agents are responsible for all of their admin. The team leader provides minimal input; therefore, we suggest a split of 10/90 (team leader/agent).

Pros

Easy to earn extra commissions for very little work.
Low-risk.
Low-cost.

Cons

Poor scalability.
Relatively low production rate.
Great agents move on quickly.

3. Traditional—Expanded

If your small traditional structure has reached 300 transactions and you have more listings than you can handle on your own, then it might be time to further expand your team.

An expanded traditional structure will see you hand your listings over to another agent. You’ll now have two sides to your sales team. One handles listings, one handles buyers.

Each buying agent is supported by a showing assistant. Showing assistants can be young or inexperienced people looking to take their first step into the real estate industry. With enough training and passing the relevant exams, showing assistants can eventually work their way up to becoming buying agents. This is a great way for a person to develop their real estate career and an excellent talent funnel for the team.

Commission split

Similar to the smaller real estate team model, you’ll need to negotiate a 50/50 commission split to pay for the admin side of your business.

Pros

Good for developing talent.
Very high production.

Cons

More vulnerable to dips in the real estate market due to the large size of the admin team.

4. Team Leader Structure

In this structure, you have an inside sales team that advertises your team’s services and properties, qualifies leads, and assigns clients to buying agents.

Your sales team consists of buying agents and a lead agent who handles listing deals. Agents do all of their own admin and paperwork. This takes them a long time, but they earn good commissions and don’t have to do any of their own lead generation.

The huge number of leads coming in makes this structure highly scalable. But each inside sales agent takes a cut of commissions. This means that this structure is only really suitable for newer agents.

Commission split

Your agents would earn around 50% commission, while inside sales would earn 25%. This model also works well for flat fees, as it encourages agents to take advantage of the high number of leads.

Pros

Very high lead generation.
Highly scalable.

Cons

High costs, especially for the initial setup.
50% commission could make it difficult to hold on to more productive agents.

5. Hybrid Team Structure

Not to be confused with the working from home phenomenon that has swept the world, a hybrid team is when your agents act as buying and listing agents.

In the past, buyers’ agents and listing agents were separate teams. This was usually to avoid a conflict of interest and to stop agents from just focusing on listings.

The problem is that most agents don’t want to be limited to just doing buyer deals. They want access to more lucrative listing opportunities, too. If they can’t get them, then they will eventually move on.

This structure attracts and holds more experienced agents. But it also requires a lot of management to make sure that the buyer and listing opportunities are distributed evenly.

This is usually a good option if your team leader or expanded traditional real estate team structures are getting more listing leads than they can handle.

Commission split

Ideally 50%, although you’ll attract more experienced agents who might expect to negotiate better deals. A flat fee may be a good option, too.

Pros

Attract top agents.
Handle a large number of listing leads.

Cons

Lead distribution needs to be well-managed.
You could end up paying higher commissions.

6. The Large Traditional Model

If a hybrid model doesn’t feel right for you, then you can continue to grow your traditional team by introducing a third team to handle inside sales.

Like the Team Leader structure, you’ll have a section of your business dedicated to marketing and nurturing leads. But here you also have a strong admin support function.

Because you have an entire team handling each part of the real estate process, you can handle a huge number of deals. Inside sales bring in the leads, agents negotiate and sign deals, and transaction coordinators close the deal.

The pros and cons of this structure and the commission splits are largely the same as the expanded structure. The only additional con is that you’ll need to account for inside sales commissions or fees. But your higher production rate should easily cover this.

Successful Real Estate Agents Use Tools and Freelancers

Photo by Clay Banks on Unsplash

Starting your own successful real estate business is a big step. But starting a real estate team can also be high-risk. If you don’t feel ready to start employing people or taking on agents, then a better option could be to make your current workload more efficient.

If you’re handling fewer than 100 transactions per year, consider outsourcing some of your work to a freelance transaction coordinator.

Or you can use tools like Paperless Pipeline to streamline your transaction management process and save you hours of time. Those hours can then be spent selling or generating leads.

Then when you do start your team, Paperless Pipeline can help your admins and transaction coordinators close more deals fast.