Real estate agents are trying to adapt to the post-establishment real estate landscape, and more and more of them are turning to the same method to grow their workforce: recruiting new teams.
Adding teams is an efficient way for large brokers to increase the number of agents and increase sales volumes on their profit and loss account. But a new study shows diversity in the ways teams are structured and how they deliver different results.
The questionnaire – performed by RealScout in combination with Tom Veer And T3 Sixty – yielded 350 valid responses from team members on the topics of growth spending, organizational diversity, “sphere of influence” leads, and broker sentiment.
In general, teams with two to five agents spend less on lead generation than teams with six or more agents. That’s because larger teams typically have larger budgets and can therefore spend more money on leads.
They also have more bandwidth to process these leads, focus on higher quality leads, and pay higher referral fees. Conversely, smaller teams don’t have the same access to capital or operational capacity to convert the leads once they get them.
But the study results also show that so-called “sphere-of-influence” (SOI) leads – those generated through relationships with friends, family and former customers – are often neglected and underinvested in. These leads require long-term effort, patience and cultivation. of relationships through emails, newsletters and other marketing tactics.
When asked where most of their deals come from, about 80% of small and large teams cited SOI. Despite this, more than half of respondents said existing systems for capitalizing SOI are only “basic,” while 39% said they are “advanced.” Another 5% said they ‘don’t exist’.
Despite a frozen housing market and significant uncertainty regarding the National Association of Real Estate AgentsAntitrust settlements have teams generally optimistic about the future.
About 45% of respondents say it will be easier to recruit agents, as many will be more interested in joining because of the settlement. to this, approximately two-thirds of respondents expect the new settlement rules to have minimal or no impact on their business.
Respondents also shed light on team structure. The average team size increased from five in 2022 to six in 2024. Large teams are also much more likely to staff recruiting, agent support, coaching and operations than smaller teams. Marketing and transaction management functions account for the majority of non-agent staff among small teams.
Legally, most teams are an LLC (38.9%) or an S-Corp (34.6%), while 15.7% are not a legal entity.
With transaction volume down and commission rates expected to drop as a result of the settlements, the fate of the brokers is paramount. Data from AccountTECH shows that smaller brokers are generally less sensitive to declining commissions, precisely because they do not have large overhead costs such as office space, management and administration.
