Every business changes with the times. New strategies, formulas and trends come and go. Real estate is no different. Over my 25+ plus years I’ve seen so much. Most of the change has been technology based. In 1989, I remember my broker was excited that he went out on a limb and bought a fax machine. It is not just technology but how Realtors set up their business has changed. The Realtor team is a model that has become more prevalent in recent years.
The question becomes is that better or worse than the traditional model where one Realtor in an office works with the client? As with most questions, the answer is – it depends.
In this blog I will give you what I hope is an objective overview of the pluses and minuses of each strategy. Neither is perfect so it is up to the each individual buyer and seller to determine what is best for them.
Full disclosure: I have always operated as a sole practitioner and have made a conscious decision to continue with that model so I obviously lean towards that strategy but I can see merits of a team approach.
What is a team?
A Realtor team is like a mini company inside of a larger brokerage. You’ve seen the ads that say “The ABC team” or the “The John Smith team” with a picture of 3 or more individuals. Sometimes it is hard to determine which brokerage they work for and if it is a team or separate company. VA license law is looking hard at these ads and has recently came out with some regulations to make it easier for consumers to determine the name of the brokerage supervising the team.
For the purposes of this article, a team is a group of 4 or more people. There are of course, 2 agents working together with an assistant who can technically be a “team” but in reality, they work more like a solo practitioner. It is only when the team starts to get rather large that these distinctions come into play.
In these large teams there is a very distinct division of labor. One agent conducts the initial meeting with potential clients. Another handles listings. A different agent shows the team listings to potential buyers. A completely different agent works only with buyers as the buyer’s agent. There are other people on the team who are the contact points for buyers and sellers as their transactions are processed.
What are the advantages of a team?
Proponents of this concept will say that buyers and sellers are better served because each person in the team is a specialist and an expert at that part of the transaction. Nobody is great at everything and under the team concept you get agents great at marketing when marketing is required and agents great at negotiating when negotiating is required and experts on pricing when that discussion surfaces. Buyer agents just work with buyers so they know inventory better than agents not on the streets as frequently. Also, by freeing themselves from administrative tasks, the agents are freer to serve clients and study the market.
What are the disadvantages of the team?
To me, the disadvantage of a team concept from a consumer’s view is that you don’t know who the next person in the transaction is and actually how well they will work with you in this very, very important life event – the buying or selling of a home. I am not talking about their skill set nut their communication style and whether that meshes with your personality.
When you made the decision to buy or sell, you somehow found Realtor x and called them for an interview. There are somewhere around 10,000 of us in Northern Virginia. So there are 1000s of different personalities and styles and experience levels. When finally deciding who to use, you selected someone who you felt understood who you are, your situation and could work well with you and your family.
Now, if agent is from one of the larger teams, you may not have all that much future contact with that individual. After signing an agreement you may next work with the listing coordinator and then the buyer agent and so on.
Again, they are all probably very good at what they do but they are not the person you hired.
Why I am a solo practitioner.
From day one, I was in this business to help people get through one of the biggest transactions in their life. I always felt service is number 1 and money follows.
I can not hand off a client I care about to someone else. They hired me to represent them and, to me, that means I am involved in all aspects of the deal. Of course, I have agents who cover for me when I go out of town. And I will have other agents in the office do open houses. And there are administrative tasks that I farm out. But all communication about the transaction comes from me.
Also, any inquiries on the home come to me directly and I call back those interested in one of my listings. Who knows the home best – the person you hired or someone in that office?
Team volume vs individual volume
Now, being a solo agent has it’s limits. It is physically impossible for me to do as many transactions as a large team. Really, once you get beyond 35 to 40 transactions a year, you are not providing a high level of service if you are a sole practitioner. Your will see ads for teams stating they did 100+ transactions in a year. That the number represents what the team did , not what the team leader did personally. There is just no way that number is achievable by 1 individual agent no matter how strong the administrative support.
Under the team model, the team leader get credit for the transaction regardless of who worked it. Very often I have had a buyer agent bring me a contract on one of my listings. When we go to settlement, I put that agent in the MLS as the buyer agent. Then a few days later, I get a call from the team leader to switch it into their name and that may be the first time I spoke to the team leader throughout the whole transaction. In those situations, I am disappointed that the buyer agent never got credit for the a job well done.
Now on the flip side, because a team can do so many transactions, they can have more signs in the neighborhood and thus get more calls and inquiries. If the house a buyer called in on is not right, they can switch that buyer to another one of their listings. I would say there may be a few homes that sell that way but most homes are sold by buyer agents and not from random internet or phone inquiries. Still it can happen.
Bottom line, there is no right or wrong but the key thing is that you as a consumer know what you are getting and believe that whatever model you choose is right for you.
When interviewing an agent ask the following questions:
Will I work exclusively with you for the sale (or purchase or sale and purchase if applicable.) If not, can I speak with the other agents I will be working with?
If you area a seller, ask who will answer initial inquiries on your home – the agent you are interviewing, a licensed assistant or someone on the administrative team?
How many transactions do you do a year? (If an excessive number, you need to determine if they can provide the level of service you want.)
These questions along with the experience, temperament and style of the agent will help you decide who will represent you the best.