6 Real Estate Team Structure Ideas

Many real estate agents have the ambition to start their own team. 

It boosts their earning potential and is a low-risk way to develop the skills and experience they’ll need to one day open their own real estate business.

In fact, 80% of realtors claim to be more productive and successful when they’re part of a real estate team, while 76% say that being on a real estate team earns them a higher income. 

It can also help busy real estate professionals struggling to maintain a good work-life balance.

But building a real estate team can be difficult. Who should you hire? How much should you pay them? Do you employ transaction coordinators directly or hire a freelancer?

This article explains everything you need to know about starting your own real estate team. It also provides several team structure ideas. Each one suits a different-sized team and way of working.

When Should You Start a Real Estate Team?

Deciding to build a real estate team isn’t a decision to take lightly. You’ll be responsible for other team members’ livelihoods and have to start managing people. 

There are a number of factors to consider that can be grouped into three main categories:

➡️ Your sales volume

The first factor to consider is whether you are making enough sales to justify starting a real estate team. 

Most agents can comfortably handle roughly one transaction per week. However, to justify employing someone, you need to make at least 30 deals annually—with this number set to increase. 

Ask yourself, “Is my lead generation suffering because I spend too much time managing clients?” If the answer is “yes,” it’s time to recruit new team members.

You should also check the going rate for staff and whether your business finances could absorb the cost to ensure you can afford to employ new team members.

On the upside, hiring new team members may improve your sales volume. The right hires—like a transaction coordinator, for example—can help ensure you close more deals. 

They can also help make sure nothing falls through the cracks. This means you won’t lose out on any deals because you weren’t on top of things like paperwork and transactions.

➡️ How ready you are to be a team leader

When starting a real estate team, you’ll have to be the team leader. Many agents are unprepared for the level of professional transformation required to do this. 

You can’t simply hire someone and expect them to start generating leads and commissions for you.

As a team leader, you’ll need to:

• Be ready to develop a real estate team business plan.
• Hold each team member accountable for meeting targets and fulfilling their roles.
• Mentor your real estate team and help them develop their skills and careers.
• Help solve problems in the team.
• Be tough yet empathetic.

If you believe you have what it takes to be the kind of team leader that propels your business forward and gives your employees the support they need, it may be time to invest in new recruits.

➡️ Your motivation

You should also consider why you want to start a real estate team, what you want to achieve, and where you want it to go. 

Here are some common reasons why real estate professionals want to start their own teams:

✔️ You’re a high-performing agent

If you bring in more leads than you can handle, starting a real estate team is a great way to boost your earning potential. 

It’s also helpful if you struggle with certain aspects of your role. For example, if a situation develops where deals might start falling through due to missed deadlines, you would probably benefit from having a transaction coordinator on your team. 

Being a high-performing agent may also mean you don’t have the time to focus on building and growing a business. 

Hiring new team members could help you balance the workload of being a successful agent and having time to get a business off the ground.

✔️ Work-life balance and family are important to you

If you want to spend more time with your family, starting a real estate team is a good way to share some of your workload with others. 

You could even make your real estate team a family business. Many real estate teams have a husband-and-wife or parent-and-child partnership at their core.

Additionally, being a real estate agent is notoriously time-consuming and demanding, and this may result in you having less time for your personal life. 

Hiring a team might be the answer if you feel it’s time to achieve a better balance between work and life. Having more people on board to handle your work responsibilities gives you more time to focus on other aspects of your life.

✔️ You want a more convenient arrangement

Some real estate teams come together naturally. Perhaps two agents working in a highly competitive niche decide to collaborate to gain a larger share of the market. 

Or maybe two agents have been sharing leads for some time, and it makes sense for them to start working together.

If you already have a relationship with at least one other agent, it may make sense to start a business with them and grow your team together.

Three Key Rules for New Real Estate Teams

There are a few common mistakes that many real estate teams make when starting out. This section provides three tips to help you avoid these pitfalls. 

🔎 Focus on leads

Your real estate team must be a lead-generation machine from day one. Otherwise, it won’t be successful.

Think about it: why would good agents want to join your real estate team if they won’t be getting more sales opportunities than they would from working alone?

Additionally, if you employ people and pay wages, then you need to keep revenue flowing. Your agents should have a constant flow of leads so they are always working at maximum capacity.

If you’d like some ideas on how to generate more leads for your new real estate business, read our full lead generation guide.

🚀 Top Tip: Carve Out Time to Generate New Leads With the right transaction management software, you can automate a significant part of your real estate business. This means less manual and time-consuming tasks and more capacity to focus on generating new leads. Additionally, hiring an admin or transaction coordinator could also free up your time to generate the leads you need to run a thriving business, be a successful team lead, and keep your employees satisfied.

⚙️ Operations are key

Most real estate teams are divided into two distinct sections: operations and sales. 

Operations consist of back-office support, such as admin staff and transaction coordinators. Sales are the people who go out and meet clients—like your agents and showing assistants.

Most agents make the mistake of immediately taking on new sales staff when starting their own real estate team.

They do this because it’s less risky than employing admins. Real estate agents only get paid once they make deals, whereas admins need to be paid from day one—whether you are making sales or not.

🚀 Top Tip: Employ Operations Staff before You Take On New Agents Why? Because real estate teams become more productive when they have the kind of support that allows each member to work more efficiently.  Operations provide the bedrock of that support. They take the paperwork, lead generation, and other activities off the agents’ hands, allowing each team member to focus on selling and being more productive as a result. An operations team fueled by transaction management software like Paperless Pipeline is pure real estate magic.

👩‍💼 Your role is to lead

Some agents start a team for the sole purpose of generating leads for themselves and boosting their own sales. 

This makes sense—selling is an agent’s natural instinct. But you’ll struggle to retain a good team of agents if you do this. 

You need to start thinking like a team leader for your team to succeed. Here’s the approach you should take:

📌 Start handing leads to agents

Do this regularly to ensure they get more from you than they’d generate alone. Additionally, making agents responsible for handling leads frees up your time to build a successful business.

📌 Be a mentor

You need to train team members regularly to do their jobs better. Share the knowledge that has made you become a high-performing real estate professional.

📌 Identify your goals

Provide targets and nurture accountability to keep your team productive and focused. 

The right software will not only help you manage commissions and transactions, but also give your team members access to their production reports so that they can see how they’re performing and what areas to improve. 

What Commission Split Should Your New Team Have?

When building a new team, the big question is how much you should pay staff and agents. Generally, the more back-office support staff you have, the lower the agent commission is. 

That’s because the real estate agent will be charged a higher brokerage fee on their gross commission, which pays the support staff’s salaries.

The trade-off is that agents with good back-office support should be able to handle far more deals, and so their potential earnings are higher.  

You should spend around 12% of your gross commission income on your admin roles.

To make calculating commission a breeze, check out our commission split calculator. Investing in our Commission Module can also make commission splits far more manageable in your new business. 

6 Templates for a Successful Real Estate Team

Before you start recruiting new team members and deciding how you’ll pay everyone, you need to decide how you’ll structure your business. 

This determines how you will run your business and the respective responsibilities of your new team members.

Below, we outline six successful real estate team structures so you can choose one that best suits you. 

The first two on our list are ‘starter structures.’ These are aimed at agents starting a team from scratch. The others are larger team structures that you may wish to work toward.

1. Traditional—small

This real estate team structure is the usual way agents start a team. You’ll act as a team leader and direct operations and sales. 

If you are in a partnership with another real estate agent or family member, you could act as lead agents together.

This real estate team structure, like any other, will typically take time to implement and become fully operational. It would look like this:

Here’s the order you should follow to set up this type of structure:

1. Hire an admin to handle listings, contracts, closing, and all the paperwork in between. This frees you up to do more sales and generate more leads.

2. Soon, you’ll be producing more leads than you can handle. Now, it’s time to bring in your first buyer agent. You will act as the listing agent.

3. When you produce more leads than you and your buyer agent can handle, hire a transaction coordinator. They don’t have to be licensed to begin with. They can take over the paperwork.

4. After some time, you’ll again have more leads than you can handle. Now, it’s time to hire more buyer agents. You’ll continue to handle listings.

5. This model could continue to grow indefinitely. However, if you find that you are getting more listings than you can handle, it might be worth considering one of the larger real estate team models described later in this guide.

🤝 Commission split

This real estate team structure is admin-heavy; therefore, you’ll need a commission split of around 50/50. 

For this to be profitable for your agents, you must ensure that your admins and transaction coordinators handle as much of the process as possible.

✅ Pros

• Handing off the admin tasks makes agents more productive.
• You can focus on high-value listings.
• Excellent growth potential.

❌ Cons

• You’ll need to generate a steady stream of leads to pay staff wages.
• More experienced agents won’t want to be limited to buyer deals and lower commission rates.
• It might not be suitable for a low-volume real estate market—for example, in rural areas.

2. The mentor structure

The mentor team structure model is an alternative to the traditional structure in that it is less risky because you don’t employ anyone directly, but you take home a cut of their commission in return for providing them with guidance and expertise. It’s typically a fairly informal arrangement agreed upon by the parties in question.

An experienced real estate agent supports a small number of inexperienced agents. These recruits usually leave after a couple of years for a team or brokerage that offers them better terms.

The mentor structure would typically look like this:

Each real estate agent is usually responsible for generating their own leads, doing the related paperwork, and closing deals. 

The mentor usually provides advice, support, targets, and commission payments. There is no admin or transaction support.

🤝 Commission split

Under the mentor structure, agents are responsible for their own admin. The team leads provide minimal input. Therefore, we suggest a split of 10/90 (team leaders/agents).

✅ Pros

• It will be easy to earn extra commissions for much less work.
• This structure is low-risk.
• It’s also low-cost.

❌ Cons

• It comes with poor scalability.
• There’s a relatively low production rate.
• Your best real estate agents may quickly move on to bigger brokerages.

3. Traditional—expanded 

If your small traditional structure has reached 300 transactions (or more) and you have more listings than you can handle on your own, then it might be time to expand your team further.

An expanded traditional structure will see you hand your listings over to another agent. You’ll now have two sides to your sales team. One handles listings, one handles buyers. 

Your structure may look like this:

Each buying agent is supported by a showing assistant. Showing assistants are typically young or inexperienced people looking to take their first step into the real estate industry. 

With enough training and by passing the relevant exams, showing assistants can eventually work their way up to becoming buying agents. 

This is a great way for a person to develop their real estate career and an excellent talent funnel for your team. 

🤝 Commission split

Similar to the smaller real estate team model, you’ll need to negotiate a 50/50 commission split to pay for the admin side of your business.

✅ Pros

• Good for developing talent.
• Very high production.

❌ Cons

• More vulnerable to dips in the real estate market due to the large size of the admin team.

4. Team lead model 

In the team lead model, you have an inside sales team that advertises your services and properties, qualifies leads, and assigns clients to buying agents. 

Your sales team consists of buying agents and a lead agent who handles listing deals. 

Agents handle their own administrative work and paperwork. This is time-consuming, but agents earn good commissions and don’t have to generate any leads themselves.

This is what a team leader model usually looks like: 

The significant number of leads coming in makes this structure highly scalable. However, each inside sales agent takes a cut of commissions, which means that this structure is typically only suitable for less experienced agents. 

🤝 Commission split

Your agents would earn around 50% commission, while inside sales earn 25%. This model also works well for flat-fee structures, as it encourages agents to take advantage of the high number of leads.

✅ Pros

• Very high lead generation.
• Highly scalable.

❌ Cons

• High costs, especially for the initial setup.
• 50% commission could make it difficult to hold on to more productive agents.

🤔 What Is the Lead Team Model? Not to be confused with the team lead model, the lead team model is when teams work together to make decisions and work as equals.  The lead team model works well when agents have varying skill sets that combine well.

5. Hybrid team structure

The word ‘Hybrid’ in this case doesn’t refer to the work-from-home phenomenon that has swept the world—a hybrid team is when your agents act as both buying and listing agents. 

In the past, buyers’ agents and listing agents were separate teams. This was usually to avoid a conflict of interest and prevent agents from focusing solely on listings. 

The problem is that most agents don’t want to be limited to just doing buyer deals. They want access to more lucrative listing opportunities, too. If they can’t get them, they will eventually move on to another real estate business.

This structure attracts and retains more experienced agents. However, extensive management is also required to ensure that the buyer and listing opportunities are evenly distributed. 

This is usually a good option if your team leader or expanded traditional real estate team structure gets more listing leads than they can handle.

A hybrid team structure would look like this:

🤝 Commission split

The ideal split in this case would be 50%, although more experienced agents might try and negotiate a better deal for themselves. A flat fee may also be a good option in this structure.

✅ Pros

• Attract top agents.
• Handle a large number of listing leads.

❌ Cons

• Lead distribution needs to be well-managed.
• You could end up paying higher commissions.

6. The large traditional model

If a hybrid model doesn’t feel like the right fit, you can continue growing your traditional team by introducing a third team to manage inside sales. 

Like the team leader structure, your business will have a section dedicated to marketing and nurturing leads. But here, you also have a strong admin support function. 

Here is an example of what your team’s structure could be:

As an entire team dedicates itself to handling their respective part of the real estate process, you can close a significant number of deals. Inside sales bring in the leads, agents negotiate and sign deals, and transaction coordinators close the deals.

The pros and cons of this structure, and the commission splits, are largely similar to those found in the expanded structure. The only additional con is that you must account for inside sales commissions or fees. But your higher production rate should easily cover this.

Successful New Real Estate Businesses Use the Right Tools

As you start your own successful real estate business, you’ll be kept busy with recruiting team members, training agents to do their best work, and getting your operations running efficiently.

Where will you find the time to do all this while still making the profit your hard work should earn you? By using the right software to support your business and processes.

Hundreds of real estate teams work with a transaction management tool, Paperless Pipeline. 

Paperless Pipeline streamlines your transaction management process and saves many team leaders and agents hundreds of hours of time. Those hours can then be spent selling, generating leads, recruiting new team members, and growing your business.

We realize you may be wary about trying out new software in the early phases of your business. That’s why we’ll give you a free trial, no credit card required!