Ultimate Guide on How to Build a Real Estate Team

Real Estate Heaven REH Ultimate Guide on How to Build a Real Estate Team

Hello, people. Welcome to the REH Real Estate Youtube channel. In the early days, Kenny Klaus drove for FedEx as a “swing driver,” which meant driving between locations with set routes. Eventually, Klaus became the route’s supervisor and realized that specialization pays off.

Klaus said to Inman, “When I got my own route and became a regular driver, the efficiency and the value I was able to deliver went up because I wasn’t running around with my head cut off.” Klaus got his real estate license in 1999, but after a few years as a solo agent, he knew there were certain parts of the business he enjoyed and others he didn’t. He finally recognized how important it was to specialize when working for FedEx: The same lesson he learned while driving for FedEx applies to real estate as well. So he built a team. If you want more real estate content, Real Estate Heaven Fan, subscribe to the REH Real Estate Youtube channel and hit the notification bell.


Real Estate Heaven REH Ultimate Guide on How to Build a Real Estate Team 1He said, “Building a team kind of came out of necessity.” In 2003, Klaus began to build his team of professionals, which now has 23 members operating out of the Phoenix area. The team is part of a Keller Williams brokerage, and they not only assist buyers and sellers but have also launched a pioneering iBuyer portal called OfferDepot. Klaus has been so successful that he has branched out into other industries, owning three restaurants as well.

Not every agent is as lucky as Klaus to find success in real estate. In fact, teams have become one of the most popular ways for agents to grow their businesses. And like how Klaus has done, many who spoke with us for this story said that they found success by leveraging their teams to help drive revenue and airtime. The moment says that this is a time when teams are more successful, and how understanding them can lead to larger success for people in the industry.

The Renee and Jeffrey Funk team began at the couple’s kitchen table in Florida. It was about four years ago, and Jeffrey was already an agent while Renee worked for Disney Cruise Line. But Jeffrey had more leads than he could personally chase and came to Renee with a proposal to expand. Renee recalls a pivotal day when she sat at her computer, digging into the company’s website back end.

Once she had a husband and a year or so of experience, Renee applied for her real estate license. While the story goes that the Orlando-area eXp team of the Funk Family first formed at a kitchen table, Renee, who was with her husband at this moment in time, shared how she realized the potential for his marketplace. “I had my hand on the mouse, and I paused, and I said, ‘he’s onto something epic here,’” she said. “We have got to grow.”


Teamwork is the foundation of our world; team members need to work together in the real estate industry. Klaus had a similar recollection, saying his team first coalesced when he hired a single administrative staffer to help with things like paperwork. His third staffer was his brother, who helped with logistical tasks such as putting up yard signs. In both Klaus’ and Funk’s cases, then, the teams didn’t spring into existence with dozens of agents and support staff. They started small with a single agent who looked to another person for help.

Even though most teams are larger than two people, more recently, Klaus and Funk’s career trajectories have shown the median size of a real estate team is four people. Real estate agents in general, tend to lead teams of half a dozen to a few dozen people. Team-based brokers are smaller brokerage divisions that contain a group of agents. A unique model for agent teams, these small divisions operate within an existing brokerage. Agents working in these teams focus on providing excellent service and more efficient client care across multiple facets of the brokerage industry.

Michelle Pais’ experience shows the difference. Pais owns a brokerage, Signature Realty NJ in New Jersey, that also has about 120 agents. However, within her entire group, she has only a smaller team of about ten people who work more closely together than the rest of the agents. The team members work with less downtime and help increase productivity for everyone. 


Real Estate Heaven REH Ultimate Guide on How to Build a Real Estate Team 2Trying to find the beginnings of something, like real estate teams, is difficult. They didn’t spring into existence overnight; they gradually evolved over time. Russ Cofano, who recently started his own team at Windermere Real Estate, told Inman that in the ’70s and ’80s, brokerages had actually controlled the customer relationship, and agents did a standard 50/50 commission split. It was with the invention of RECM.com, started in the 1970s that agents started to receive a desk fee instead of a commission split.

This change made it so that brokers took a backseat and would slowly evolve into an industry led by agents rather than brokerages. This will give agents more power and responsibility. Agents in this context are individuals who engage with clients to help them sell their goods or services.

“They said, ‘we’re just going to facilitate your business,’” according to Cofano of RE/MAX’s strategy at the time. RE/MAX did not invent teams, but they have contributed a lot to them. Foremost is the innovation they pioneered decades ago. After a decade of encouraging agents to hire assistants, by 1993, RE/MAX CEO and co-founder Dave Liniger said that “if you don’t have an assistant, you are one.” Ever since Armbruster said that hiring an assistant was the beginning of the Team Era, things have taken a dramatic turn. 

In America, the 1990s saw innovative teams such as that of real estate brokerage RE/MAX generate success with a team-oriented approach. Their impact has helped shape the way real estate businesses today conceptualize teams. Richard Cofano, Facilities Director at Keller Williams, noted that Keller Williams is probably the most team-oriented company today. With success proved, agencies began to take more risks. With the economy recuperating and a housing bubble occurring, agents were ready to take on greater challenges after the recession.


At the same time, thanks to the internet maturing, agents also gained power with online lead generation. This became key in the story. In regards to how teams are adapting, Cofano said “Lead gen” is a huge catalyst. This was apparent with the digitalization of marketing, which began in 2012 and fervently expanded in 2013 and 2014.

The lead generation process has been evolving in recent years with the introduction of new sources of leads; brokers used to rely more on Zillow, Facebook, email marketing campaigns, and their websites. Today, agents can generate leads from these source platforms that offer granular data insights into households’ interests and the level of research they have already done. With more freedom and tools, agents were able to take on more projects themselves with their team, as well as collaborate and grow. According to Cofano, “Teams are a function of independent real estate agents owning the consumer relationship as opposed to the broker owning the consumer relationship.”

Klaus, who used to drive for FedEx, agrees with Cofano’s statement about the changes in both real estate branding concepts and technology. Both plan to use teams more now as an effective way of interacting with customers in the future. As part of the shift in agency ownership, some agents have now become a brand in addition to being an agent. This is why you’re seeing it continue to grow.


Real Estate Heaven REH Ultimate Guide on How to Build a Real Estate Team AgendaAccording to the National Association of Realtors survey, which collected responses from over 3,400 agents last year, 26 percent of members are part of a team. NAR members who work with teams have a median establishment year of 2014, and many are relatively young. The National Association of Realtors found that nearly 40% of agents were considering joining a team. Bob Goldberg of NAR explained in a statement that the real estate industry is in a period of “transformation,” which can be seen through their trend toward teams. 

Real estate teams have found success with their availability of many niches. With this constantly growing need for specialists, they are able to offer the standards that customers have come to expect in a steady market. Cofano says that it’s difficult to completely understand the extent of teams since people define them differently. Some individuals are still in a team-like structure even though they represent themselves as an individual, and there are different sizes and scopes. 

However, Cofano analyzed the data from Real Trends to find that teams outperform individual agents. In the five years since 2011, agents in the top 250 for Real Trends saw a 21 percent increase in transactions. Team transaction sides grew by a staggering 129 percent during that same period. These increases in team transactions have outpaced individual agents.


Top teams increased in transaction sides by 1.5x or more over the three-and-a-half-year period, while individual agents only grew by between 0.7x and 0.9x. Teams have been particularly successful at some of the larger brands. For example, RE/MAX said that it had 23,360 team leaders and members across its entire network as of the first quarter of this year. But among the top 2.5 percent of RE/MAX agents, nearly 70 percent are members of teams.

At Realogy, developers began using scalable, agile development techniques about two decades ago. The Coldwell Banker brand employs a team of 3,273 agents, while the better home and garden providers of Realogy have 389 teams with 1,021 agents, and at ERA, 983 agents are administrators of 331 teams. Keller Williams recently celebrated their brand’s ranking on Real Trends’ top-rated teams with a 34.3 percent rate. The impact of the data on teams is that they are a tool to increase agency. The use of teams by ambitious agents will not change in the near or medium term. There are a few standards that tend to apply to most business strategies, such as teams.

More and more teams include a mix of agents, support staff, and coordinators. For example, Dan Beer of eXp tells Inman his firm consists of about 30 people. However, only thirteen of those are agents, and the rest work in various support roles. “It’s everything from listing management, a runner, a client care concierge,” Beer stated concerning his support staff. “We have a sales manager. Various assistants. Some are dedicated to agents and marketing.”


Real Estate Heaven REH Ultimate Guide on How to Build a Real Estate Team MeetingJeremy Stein is a co-founder of the Stein Team and leads a group of six people. Everyone on this team has a real estate license, but only four people make sales. The rest, like Beer’s team, are dedicated to administrative and support tasks. “We started very organically, and we brought on the first person to be an assistant,” according to Stein. “The goal had always been to bring more people on to help service, so servicing leads,” Pais said that with a team of ten, six agents, and four administrative staff, they are able to give each client the attention they deserve. As teams vary in size, a mix of administrative staff members is present. Team leaders also told Inman that their support staffers receive wages, while sales agents get a more conventional commission. 

In a report released by the National Association of Real Estate Agents, 38 percent of agents are compensated via commission splits. Another 22 percent receive graduated commission splits, and 13 percent of agents receive 100% of their compensation. Pais said that agents work with the team leader when they list properties on the agency website and split 50/50. The leader provides a number of services for their agents, such as marketing, administrative support, listing and transaction coordination, and more.

Many of the team leaders who spoke to Inman for this story did not want to disclose how exactly they divide commissions with team members but mentioned that these splits follow industry standards. More importantly, the higher commissions allow agents to dedicate their time to providing extensive client services. Other team leaders say that they provide members with lead generation, coaching, and additional types of logistics. Pais mentioned administrative support services. 


Cofano explained that most teams are limited to one specific location. That would be because teams tend to hit a “ceiling” where they can’t grow much more in their own market. When a brokerage reaches that point, it can expand into a new city, but because a team operates within a brokerage, getting bigger is difficult after one certain point. There are teams that are multi-geographic, but what’s stopping this from happening more is the fact that, with the exception of virtual brokerage firms, team leaders would have to develop a separate relationship with brokers where they want to expand. As a group grows, it becomes increasingly difficult for agents to manage them. The task of managing the group falls on less experienced employees and slows down productivity even more.

Inman spoke to Nick Shivers about the Keller Williams team from Central America. When the conversation began, Shivers was preparing to go surfing in Costa Rica, but the next day, during their conversation, they were watching wildlife in Nicaragua. “I’m watching a sloth right now,” Shivers said once during the conversation. In Portland, Oregon, the data scientists from Shivers were hard at work, and this contrast highlighted one of the benefits that came up again and again during conversations for this story: Creating a team lets agents have more flexibility while their businesses run smoothly.

At Shivers’ firm, he has ten other agents and four support staff members. Today, he spends much of his time on “Sell A Home, Save A Child.” The program allows 1000 children to receive scholarships. Because he has a team, he can participate in activities such as surfing the internet, watching sloths, and donating to charity.

Shivers said that he’s good at delegating when asked about teams. Other agents said that assigning tasks could allow them to focus on the work they believe in more while delegating everything else. According to Pais, “I can take on four or five appointments per day, and it won’t feel like I’m overwhelmed because I have the right people in place.” Stein thought similarly, “In order for us to do the numbers we do, and to be as successful as we are, we need help. There’s just not enough hours in the day to be servicing all the different people that we’re servicing and to be servicing all the different properties that we do.”

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