In theory building and running a real estate team seems like a pretty good idea. You are getting more leads than you know what to do with so you bring on a junior agent as your buyer agent. You give them good quality leads and if they sell the client a home you take a percentage of their commission. The more junior agents you have working for you the more money you make. Sounds awesome.
The reality is that when you run a team you agree to take on a lot more responsibility. Not only are you a selling agent you are now a manager, a leader, a trainer, a mentor and an engaged human resources director. If you cannot lead effectively, or over-manage the team you will ,in effect, spend more time managing and less time doing what you do best…selling. But when you dive into the relationship even further a few dichotomies surface. As a sales representative you are working as an independent contractor for your broker, your team members also work for the brokerage but report to you. Hopefully you have the same values as your brokerage and are on the same page when it comes to business goals. With any luck your team members are well-trained and share your ethics too. But what happens when a team member does something wrong? Your brokerage is on the hook to clean up the mistakes even when, for example, the mistake was made because they were following the team leader’s direction. So the question remains, who is responsible for the team members? The team leader or the brokerage? With teams these two entities are fundimentally at odds with eachother. The brokerage provides services essential to the agent (The ABC test of who controls the services) vs the team leader who supplies the leads ( the economic reality test). The real estate brokerage is, in many ways a unique creature. It is statutorily required to provide certain duties, like oversee agents, provide accounting and practice risk reduction.
Compensation based on commission.
Here is something else to consider. There are currently three separate cases before the courts in the United States that are challenging the very nature of the agent and team member relationship. The outcomes could very well force team leaders to re-evaluate how they build their teams. In each of the cases the team members are arguing that they were hired as buyer agents but were also required to perform tasks for the leader such as pick up and deliver cheques, meet appraisers, sit agent open houses, home inspections or even write blogs or post stories on social sites. The very nature of these tasks, it is argued, presumes an employee/employer relationship and if that is the case then wouldn’t the team member deserve the benefits that an employee would receive, such as employment insurance, medical and dental?
If teams are here for the long-term then, in my opinion, it is important for brokerages to develop a policy and procedure manual and some standards of service. Team contracts need to be more than just a handshake agreement or a quick email. The reality is that no two teams are the same so a blanket agreement is just not going to work. Have a lawyer draw up a binding agreement and make sure that it works within the laws of REBBA 2002.
Certainly brokerages need to understand that teams are developing at a fast and furious pace and there is yet another complication….the sub brokerage. I will talk more about that in part 2 and then later in part 3 I will talk about the finer points of developing your team.The reality is that as the team concept evolves, more questions and complications will develop. In the meantime the best you can do as a team leader is to have a written agreement which sets a tone and understanding of the relationship, achnowledge that compensation is based on commission, list tools and materials supplied for day to day efficiencies as well as who is responsible for their maintenance and upkeep, include clauses on sick leave, vacation time, desk duty (if required) and above all else have a system that will have solid arbitration mechanisms.
mark mclean is the Broker/Manager at the Bosley Real Estate Queen St W office and President-Elect for the Toronto Real Estate Board. The opinions expressed here do not reflect the opinions of TREB or Bosley RE.
As many of you know, I’ve been off work for the last couple of weeks. A near death experience (bike vs car) tends to knock the wind out of your sails and even a too brief trip to the islands to recover can only do so much. Luckily for me, lying on the beach can be inspiring so when I returned to Toronto I was excited to put a few of my new ideas to the test.
Last week’s meeting was not only the last of 2012 but our best by far so I’m excited to share this one with agents and managers across the country. Here is the set up. While I was lying on the beach in the sunny Caribbean there were a bunch of different coloured tents selling the usual touristy wares; shark teeth necklaces, shell frames and magnets, tie die t-shirts, and lots of home-made chachkas. With each tent essentially selling the same thing it got me thinking…what makes Joe Tourist buy something from one tent and not the other? If the owner of each tent had unlimited resources what would they do to market their business differently? It’s a question that we, as agents, ask ourselves at least once a year. If we had unlimited resources, would we have the wherewithal to make our business even better? I decided to put our agents creative minds to the test so at our morning meeting I broke up our agents into three groups and gave them each a tent and asked them to take 15 minutes to develop a marketing plan designed to attract more tourists. There were only a few things they needed to do. First, they had to develop five ideas or strategies, come up with a logo, website, and tent name. I appointed our General Manager, Ann Bosley, as the judge even though she thought the idea for this meeting came to me in a rum punch and painkiller induced hallucination.
The Pink Tent with team leader Jesse Boyer settled on the name and website BigPinkBanana.com and their tag line was “no shoes, no shirt, great service!” Among their offerings were outdoor demos held every couple of hours with free give aways, an on-line discount card, well displayed and organized stock. They felt the key to their success was being cleaner than the other tents.
The Green Tent with team leader Mark Jestley called their tent “Jabba Hut” and their tag line was “bottoms up”. Their tent offered complimentary rum punch and free daily world news flyers, a big screen TV playing the 24 hour hockey channel while a trained monkey put sunscreen on the guests (remember there is an unlimited budget). At night a DJ spins Gangham Style in front of a roaring bonfire.
The Yellow Tent with team leader Larissa Doherty took a decidedly different approach to their marketing strategy by taking their tent experience to the people. Their tent acted as the head office for TheBeachValet.com an upscale, VIP style service that offered a menu to guests to choose products from as well as the ability to pick massage and spa treatments.
This was an excellent team building experience for the agents and the results were often hilarious. I don’t want to spoil the fun and tell you the results. I will let you decide, but If you email me I will tell you. All in all the whole meeting took about 45 minutes. All the agents and managers had a great time. A perfect way to end the year!