Weekly Book Scan
Real estate teams are growing, and whether you’re on one already, a solo practitioner competing against them, or a broker trying to manage them, you’re likely looking to learn more about how they work.
The reason I presume you want to know more is because there isn’t exactly an abundance of statistical information on teams. A big part of the reason for the absence of data is because the definition is hard to pin down. What’s the difference between a top producer who has a licensed assistant and a mentor-protege team? Sometimes teams are really just two individual agents who work together on certain deals but have their own separate books of business; other times they operate more like mini-brokerages with their own branding and detailed internal structures.
The only way we can reliably “count” a team is if they self-identify as one. And that’s why the newly-released report, The Real Estate Teams Playbook: Aligning Structures and Strategies With Goals and Growth is worth a look. Released by REAL Trends in collaboration with BoomTown, ERA Real Estate, and dotloop, much of the insight used to create this playbook comes from a study conducted in the first quarter of 2016 by REAL Trends to better understand the landscape. They interviewed 25 team leaders and broker-owners and surveyed more than 2,450 real estate professionals across the country. The size of teams varied widely, from three team members to more than 50.
One interesting element of the findings is the large role that culture plays in establishing a successful team. The report puts a fair amount of responsibility on leaders for their “ability to conceptualize and foster a team culture.” However, the authors also note that the personalities and goals of team members and the tools available to them “have an equal impact on team culture.” But the buck doesn’t stop with team leaders and members, according to the report. Broker-owners, brand leaders, and coaches must play an active role in how teams operate and function in the wider industry, according to the report.
Here are some of the more surprising findings from the study:
- The average monthly compensation for team members (not including team leaders) ranges from $2,000 to $12,700, depending on their role in the team.
- Most teams are on the small side. Of the surveyed teams, 38 percent comprised of 2 to 3 members; 41 percent counted 4 to 9 members
- The majority of the teams that were part of this survey are relatively new. More than one-quarter (26 percent) formed less than a year ago and 37 percent formed within the last one to three years.
The real estate sales model is broken—and in more ways than one. Think about how many areas of expertise must be mastered to not only to sell one house, but also to thrive with consistent deal flow in one of the most competitive sales industries. Among the specializations required are knowledge of local inventory, financial analysis, prospecting, negotiating, marketing… Just look at the categories covered in NAR’s field guides and you will catch my drift.
That’s a ton of pressure for someone new entering the business and just trying to make it through their first year. But how does a true professional carve out the time and investment needed to serve a prospective homebuyer or seller at the highest level? Sometimes we need to look outside the industry to see what’s working in order to model success for the future, which is why the Sales Development Playbook should be your next read.
Author Trish Bertuzzi lays the smack down on why sales organizations need to re-examine their strategy and operations. It’s time to stop doing what isn’t working. Beyond leadership, execution, retention, and recruiting, let’s dive deep into the specialization required as highlighted in her book, and figure out how it applies to selling real estate. To clarify: We are not talking specialization in expertise in the sense of developing a niche in new construction, investment properties, or green homes. The focus is here is on building a team to field the roles that make a transaction work. These include:
- The lead research role is responsible for streamlining the pre-call process.
- Sales development reps make introductions, set appointments, and create opportunities.
- Inbound sales reps are responsible for lead qualification.
- Account executives close the deals, drive revenue, and are the highest compensated out of the four.
At the traditional real estate brokerage, these roles are one in the same. The agent must generate new leads, qualify them, and close for either the buyer agency agreement or listing contract then negotiate the sale. But to assume all of the roles listed above is unrealistic if sales productivity is the priority. Compensating each role the same isn’t fair either. So how do brokerages make the transition from the agent-centered model to the team model with the least disruption? Bertuzzi recommends the following:
- Agree with specialization. Until you understand “the why,” you will never be able to delegate “the how.” Once the team has more than four members, then you can start to specialize.
- Attitude affects the role. Different people handle rejection and interruptions in different ways. Being able to bounce back from a failed listing appointment takes much more resilience than rebounding from a hang-up of an unqualified lead on the phone.
- The salesperson’s comfort level with the consumer shapes the role. It’s one thing to target your sphere of influence. It’s another to target a relocation portfolio of a Fortune 500 company.
- Messaging matters. An inbound sales rep asks, “How can I help you?” whereas the agent in the field helps the customer think differently about the value proposition.
If you are new to real estate, join a team. If you’re up to your eyeballs in paperwork and want to continuously grow your business, start a team. The Sales Development Playbook is an excellent guide demonstrating how companies have successfully changed their model and I hope it does the same for you.
Last Saturday, I faced a serious trial as a new home owner: first block party. We moved into our place late last summer, just after the annual block party and the local festival, so this would be our first real neighborhood event. I was wracked with anxieties and questions: What should I bring to the potluck? How early/late would people be hanging out outside? Should I set out some chairs in the front yard or stick with the bench up on our porch? Buy some sidewalk chalk for the kids? Make up some sun tea, or offer up home brew?
My husband—who is undoubtedly the extroverted social butterfly of the family—would be off at work all day. And unlike many others on our block, we don’t have a kid or dog to help grease the skids of socialization. So I would have to do this all on my own. I am not kidding you when I say I lost sleep over it in the week leading up to the event. I almost considered making plans with friends so I would have an excuse to skip out.
Thankfully, I’d been reading This Is Where You Belong: The Art and Science of Loving the Place You Live, by Melody Warnick. It’s basically a guide to fostering what the experts call “place attachment” in oneself. Warnick had moved many times as an adult and wondered why she didn’t feel at home anywhere. She began to think that maybe it wasn’t the places that were to blame but her lack of effort at becoming rooted. So she embarked on a series of “Love Where You Live” experiments and projects to see if she couldn’t convince herself to fall in love with her new home in Blacksburg, Va. Alongside this highly personal experience, she bulks up the book with copious studies and interviews with experts on placemaking, social science, and community building, making it widely applicable to home-seekers worldwide.
So there I was, loving reading this book, and absorbing all kinds of ideas on how I could invest in my community and get all kinds of great benefits in return. Investments like volunteering, eating/shopping locally, getting into nature and politics, and—wait for it—
…talking to my neighbors and attending block parties. OK, Warnick was not going to let me out of this one.
So. Moment of truth. On Saturday, I did do something sort of sneaky, in that I volunteered to smoke a pork shoulder and make tacos for the potluck. That gave me an excuse to be semi-social and outside all day without making my neighbors feel like they had to walk over and talk to solo ol’ me. This activity has the added benefit of producing delicious tacos, which I would later promise to make again next year at my neighbors’ urging.
And I’m happy to say it all worked out in the end. I found out that my neighbors are fun, warm people who care about their block and the people on it. And while the party was still going merrily along by the time my husband got off work and joined in, there wasn’t one taco left on the platter for him. Oh well, there’s always next year!
Criminals study a neighborhood using a totally different calculus than residents and real estate pros do. In Geoff Manaugh’s A Burglar’s Guide to the City (Farrar, Straus and Giroux, April 2016), you get a front seat view of what the world looks like through the eyes of a burglar. It’s a fascinating read for any student of real estate, both for its examination of historical heists and the view of modern law enforcement practices that ordinary citizens don’t often see.
But for the purposes of the real estate industry, the most helpful parts are when Manaugh points out subtle features of neighborhoods and buildings that put them at increased risk. Here are a few of the elements criminals use to profile their target subjects.
- Parking for the getaway car. Property on a cul-de-sac is less likely to be targeted, Manaugh says, because cops can more easily box a perpetrator in. Conversely, a corner lot is more likely to be targeted because there are better options available to fleeing criminals.
- Cookie-cutter copycats. If your home or building is laid out in a way that’s not obvious from the outside, and isn’t based on the layouts of your neighbors, you might be living in a place that’s less likely to be targeted. Manaugh explains how some thieves can use seemingly harmless information such as fire codes to build a probably layout of apartment buildings before they even see the lobby.
- Neighborhood features. Manaugh says burglars are more likely to avoid houses that have schools nearby because they tend to lead to an increased presence of police and eagle-eyed parents. Meanwhile, a forest in one’s backyard could mean thieves have a place to disappear into. Finally, walkable neighborhoods are likely to make burglars nervous because pedestrians might notice something’s amiss.
- Items placed up against a building. Manaugh notes that burglars have been known to climb inside a Dumpster that’s positioned against a target building and chip away at the wall of the structure over a period of several days. Not only do they have cover, but the Dumpster provides a convenience place for criminals to store the resulting debris. Also, be wary of scalable junk piled up during construction. As Manaugh cautions, “A pallet is a ladder to a burglar.”
Now that I’ve got you good and paranoid, let me share one last thought with you from Manaugh: Your website might be part of the problem. “All a savvy burglar often needs to do these days is look at the website of your home builder or the property agency in charge of your apartment building to pull up a floor plan; these innocuous online tools ostensibly made for real estate bargain hunters are also amazingly helpful burglars’ guides,” he writes.
Sustainability is a popular word, and I think that’s mostly because it can mean so many different (but mostly positive) things: environmentally friendliness, durability, longevity, monetary balance. I would be willing to bet that at the 24th annual Congress for New Urbanism in Detroit this week, every single session touches on some element of sustainability. At least that’s the case with every session I’ve been to so far.
Not that there’s anything wrong with that! But how can you identify elements of sustainability in your community? F. Kaid Benfield, author of People Habitat: 25 Ways to Think about Greener, Healthier Cities, told attendees today that even if a community invests in 100% net-zero buildings, that doesn’t mean it’s sustainable. In fact, if getting to that place requires a lot of individuals to get in their cars and drive to a parking lot, the true carbon cost can be much higher than the regional average.
“We spend more energy going to and from the average office building than the building itself emits,” Benfield said. “The environmental footprint is not limited to what goes on inside the building.”
While walkability, transit, and bike paths can help minimize that carbon cost, Benfield noted that too much density can be a turn-off. And if residents and visitors aren’t comfortable in a space, it doesn’t really matter how sustainable it is. “Density does bring urban intensity,” he noted, adding that an area that can achieve something as minimal as nine households per acre can see the benefits of high density while still building at a very “human” scale: “We serve our cause well when we build the right kind of density, when we build density with sensitivity.”
Along those same lines, Benfield noted that the most important element to a sustainable area in a community is how much affection the community has for it. “It doesn’t do any good to have a building that is sustainable if we don’t work to sustain it,” he said. “Lovability is a mushy word; it is not easy to measure. But that does not make it unimportant.”
And how can you tell a place is loved? Benfield suggested the most sustainable, best-designed places in your town will have visible evidence of use from the oldest and youngest members of your community: “If kids and elders love a place, you have a place that will be loved, a place that is sustainable, a place that will be cared for over time.”