Team up
Strength in numbers can help you boost profits and improve customer service.

by Chris Heagarty  Today, much real estate business is done by teams of licensed and unlicensed people who band together for higher productivity. Combined efforts can lead to superlative customer service and heightened financial rewards for all.

Proliferation of teams is fueled by administrative work that hinders productive, face-to-face client time. The more talented an agent is at attracting and servicing business, the greater the landslide of potential business. For some, it can be overwhelming.

Why expand?
Some agents report they formed a team out of desperation. Their business was engulfing them, eliminating personal and family time. Others carry guilt over not having enough time to serve clients or capitalize on spin-off opportunities. Lost business is painful. Missing family time and downtime creates personal havoc.

Time off means lost revenue if there is not someone left behind to handle your business responsibilities. Burnout is inevitable if the overworked agent doesn’t address the conundrum of how to “get a life” and not lose business.

The time is right
The age of your practice does not always act as an accurate predictor of when you should start a team. If business is sparse, then spreading it further to feed others doesn’t make sense. Most teams don’t form within the first year. Jim Morelli (Jim Morelli Team, Austin) took on his first assistant in his second year. He is now in his third year with a team of five. Clearly, the ability of the leader and his team to generate business should be the driving indicator of expansion.

For some, forming a team is not a goal. Claudette Burlison (Hirschi, REALTORS®, Wichita Falls) never envisioned herself with a team. For her, the natural step was to take on an administrative person plus someone to handle her virtual tours and ad writing. She did not want to manage people, but she needed a way to come out from under the administrative burden to increase productivity. Most teams start this way, but expanding is not for everyone.

Divide and conquer
Team sizes and structures vary widely and are limited only by the vision and creativity of the team leader. Consider what you do best, what you like least, what is most productive for you, where you are losing business, the percentage of your time spent face to face with customers, the skills of potential team members, what is holding you back, specific market niches, and your desired outcomes. These factors should help you decide to form a team or join one.

Most teams are perpetually evolving in response to business growth. Many start with an assistant to handle the paperwork and menial tasks, leaving the agent with more time for direct customer interface.

More-mature teams differentiate as business evolves. Work specialization occurs, often progressing from an administrative person to one or several buyer agents, then to one or more listing coordinators. Listings provide buyers for the team. Most team leaders devote their energies to fine tuning listing procedures and are very involved in each listing presentation. Strong listing inventories fuel the buyer agents with new buyers.

Cindy O’Gorman (O’Gorman Group, Dallas) has a seven-member team, which consists of an office administrator for the contract-to-closing phase (including repairs), a full-time marketing person, two listing coordinators, two buyers agents, and herself. While most of the team is specialized, O’Gorman does some of everything, including listing presentations and working with buyers. She handles all contract negotiations herself. This structure produces top results for the team.

The Morguloff Team from the Metroplex is structured differently. Martha Morguloff and her daughter Danna Morguloff-Hayden do not restrict themselves by specializing. They both work with all clients, and are supported by a full-time assistant. Martha believes the client benefits by having two professionals at his disposal. This allows a certain freedom, since the client is comfortable with both partners. While they network aggressively, they restrict their territory to reduce the inefficiencies of long commute times over a wider area.

Joseph Gullotto (The Gullotto Group, Dallas) specializes in development. His team works for approximately 10 developers of high- to mid-rise properties. He assigns two to three agents to each property. The agents sit the property seven days a week or every Saturday and Sunday, depending upon project size and traffic. Gullotto oversees the projects and negotiates all contracts with the developers and the buyers. Also, all members of the team are responsible for bringing business into the group.

Rusty Graham (Rusty Graham Team) focuses on foreclosures in Tarrant, Dallas, and surrounding counties. His 14-person team specializes in estate-owned and foreclosure properties. Graham solicits the accounts and maintains ongoing contact. Work is distributed among five departments: price opinions/setting value, listing coordination, negotiation, utilities and maintenance, and accounting. Non-foreclosure listings and sales are normally referred to other associates within the company.

Craig Owen of The Owen Group in San Antonio sold his five-person team to two team members two years ago. The sale freed him up to take his next step, managing a whole office. Owen stresses that setting up good systems keeps the team strong. The systems add value to the team, which helps the members who took it over. They continue what had been started without losing income, even though the original leader left. The revenue stream since the purchase continues to grow, generating regular income for Owen as part of his buy/sell agreement.

Must-have attributes of a well-functioning team
Teams and partners cite various attributes that make their group work. Overwhelmingly, all claim a shared philosophy of customer service and a similar work ethic as musts. If these are not in sync, misguided work expectations and unreliable service result. Such rifts can lead to a team breakup or lost business. Thus, up front, the team leader should clearly communicate work and service expectations and probe each candidate to verify they embrace a similar philosophy. Care and due diligence at this juncture set the stage for a solid working relationship that will benefit the entire team.

Observe the work habits of those in your office now to identify behaviors similar to yours. Invite mutually compatible personalities. Be open to experienced and green talent. If you take on a newcomer, your training can mold their behaviors like yours. That kind of consistency enhances the customer experience. Husband-and-wife teams fit this category. Pat Brown (Team Brown, Galveston) has been a REALTOR® for 20 years. Five years ago, she brought in her husband, Stan, to help her with some of the menial tasks. He was licensed, dependable, and got along well with Pat, so he became a full-time partner, listing and selling.

Finally, strong communication among the team members should come naturally and be facilitated by strong internal systems and well-thought-through procedures. The communication challenge for Rusty Graham’s foreclosure practice necessitates heightened communication to train the whole team on new client technology and procedures.

Systems and procedures should address the flow of work and communication, internal and external administrative details, the contract-to-close period, client follow-up and reporting, prospecting, and short-term and long-term customer service.

Put it in writing
Successful teams have contracts spelling out the rules of engagement. A commitment of at least a year is recommended, allowing enough time to measure results and reprise with a restructure if warranted at year end. Contracts should be specific and discussed thoroughly before signing.

Content should include job descriptions for the team members and leader, who owns the clients and database, compensation, how and where business is to be conducted, who pays for what expenses, what happens when a team member originates business, who is in charge, conflict resolution, and an exit strategy for disengagement. A temptation to short circuit this process makes the team vulnerable if things don’t work out.

Compensation
There is much variance in how team members are compensated: an hourly wage, direct commission on each transaction, salary, referral fees, a bonus on production. Particularly striking is the flexibility within some teams to accommodate differing compensation models to match the financial needs and temperament of team members. Sheri Eddleman (The Eddleman Group, Dallas) pays hourly for administrative support, commission against a recoverable draw, and straight commission all within the same team. Her commissions fall within the parameters set by her sponsoring broker. Eddleman feels that her flexibility allows compensation arrangements that are not only fair but tailored to each member. For her, this is good team stewardship.

Rusty Graham has five licensed and nine unlicensed persons. Compensation is either hourly or on a salary with no commission override. This arrangement works well with his highly specialized practice.

Managing the team
The team leader sets the course for the direction of the team. This includes articulating the business philosophy up front and day-to-day management, including setting up systems and procedures. Most teams have some form of sales meetings on a regular basis to fine tune efforts. Budgets, projections, and any forward direction for the team must be communicated regularly and tweaked or redirected as the team progresses.

In the Eddleman Group, every person is expected to generate his own opportunities in addition to handling what spills over from the team efforts. Sheri Eddleman and Jim Morelli pay for all marketing costs and make the decisions over the checkbook.

Clearly, projections influence expense outlay. Central control of expenditures and clearly communicated direction minimizes counterproductive efforts and fracturing of goals. Eddleman also hired an accountant to incorporate her team who now does all of the corporation’s accounting, including the year- end 1099s.

Ego factor
Since most teams are named after the leader, members don’t get individual name recognition. This can cause friction. Still, many feel that being a part of a highly successful team generates not only financial rewards but also peer recognition. For some, this is enough. If income stays strong and the client base remains the property of the team, then temptation to leave and start a new team is diminished.

In the case of the Owen Group, the new team leaders elected to keep the old name in place. The existing name recognition and residual business that flows because of it compensates for the ego boost that re-naming might give the new leaders.

At the end of the day . . .
The complexity of our industry has created opportunity for teams. Regardless of size, all teams have in common a heightened focus on productivity facilitated by efficiency and specialization. Structured and managed properly, a team is rewarding for all participants. It allows the super-generator to capture business that would otherwise become a casualty of time constraints. At the same time, it provides business to agents whose personal lead generation lags. The ultimate winner is the consumer, whose needs are met by a powerful team that can respond quickly with expertise and superior service.

Chris Heagerty is general manager for eRealty.com.
E-mail her at cheagerty@erealty.com.

A panel discussion on teams, Managing Teams & Groups for Profitability, will be held during the Texas REALTORS® Convention and Trade Expo in Fort Worth. For more information about the convention and a full schedule of events, see page 14.

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