Let’s Talk About Teams

Mike Ferry: And good morning, everybody, it's Mike Ferry, December the 6th Mike Ferry TV, we're going to do something a little different on this particular episode. We're going to talk about teams. I mean, our industry is an industry that is constantly looking for buzzwords so everybody can get excited about that buzzword. Remember, a couple of years ago, a friend of mine said to me, I've never seen an industry that uses the word crush so much as Real Estate. I said, well, this industry has a lot of interesting words they use to describe things; I saw in an email this morning, and the guy said to me, "I'm deep diving into this idea of how to learn a Listing Presentation." I said, Well, either hold your breath or get an oxygen tank. We're not deep diving. We're learning to make a presentation. Well, the word team today and we have all sorts of looks at this particular word because everybody has a different idea of what a team should be. And quite honestly, I'm a little surprised that as many people as we see every day in this industry think that they should be involved in a team. I get asked all the time what is the highest level of income an agent could produce? Now, yes, if you owned a real estate company and you had a couple of hundred agents and you had them on a fair commission split and you had decent company dollar and you had affiliate services, there's a chance you could make some good money if you're an agent, which most of you are that watch the show each week.

Mike Ferry: You know, if you're taking three to four listings per month that are salable that are in this marketplace, it's pretty hard not to have a salable listing and you're processing those transactions properly and using good affiliates to support what you're trying to do, and you get 20, 30, 40, 50 closings in the course of a year. You're going to make a substantial amount of money, but in most cases, you know, you're going to build a little team, meaning you're going to have an assistant, a transaction coordinator, somebody to support what you're trying to accomplish. We know that a lot of new licensees watch Mike Ferry TV because we get a lot of response to each of these episodes we do and we've been doing these now for, I'm going to guesstimate 15 to 17 years, this Mike Ferry TV series. So what I want to do today is a little different. I'm going to read to you a couple of the emails that I send out to our coaching clients, one of the services that you receive, and some of you are in coaching that watch this each week, I send out what is called the daily email, and each day I create and I'll show you an example.

Mike Ferry: It's usually one to two, maybe three paragraphs long, information that I think is important for us to know. And the good portion of our coaching clients will then not only file these, but then they also print them and keep them in a recorded fashion someplace. Review them because it's a method of training that you get. So I did five days last week on the word teams, and I want to share it with you today, what some of those thoughts that I expressed to our coaching clients were because I got an email from one of our clients in the Midwest. And he said that the broker last week introduced two brand new licensees. Just got their license. Everybody applauded. Yay, we're glad to have you here. And then he announced that he's recommending to these two young salespeople, two brand new licensees, never list, never sold, never been through training, had no experience in real estate or in sales. He had recommended to both of them that they hire one assistant each and hire two buyer's agents and start a team. That is financial disaster waiting to happen. There's no question about it, but I've also had a couple of responses from our clients saying things like, "Hey Mike, how do I set up a team where I can make a lot of money and never have to work and just create passive income?" Probably never going to happen in our business? And there's a lot of reasons why, and you'll see that as we look at some of these thoughts today.

Mike Ferry: So I wrote the following: The word team is certainly becoming one of the most prominently used and probably overused words in the industry today. I've only been doing this work that I'm doing today with you guys and gals for forty seven plus years and forty seven years ago, I started talking about having a staff, an assistant. I had one when I started, brand new and Real Estate working with you and doing a variety of things to make your business a little more productive and a little more profitable. Ok. You're going to set a goal to do 20 transactions and here in a marketplace where it's either attorneys that are handling the transactions or you have some kind of transaction coordinator in the company or on the West Coast, you have the use of an escrow firm to handle some of the paperwork. But in most cases, you're going to have some support to handle the transaction. So just the fact that you have support in handling the transaction defines that you have a team, you have somebody supporting you in building and doing your business. I wrote down: Now I think most of us are aware that everyone from the newest licensee that I just mentioned to the most experienced agent wants to build or develop a team.

Mike Ferry: The most important question I asked our coaching clients this past week that have an interest in a team, is what is your purpose or what is the end result of having a team? What is your purpose or what is the end result? There are multiple components to building a high volume, high production team, and by far one of the most important components is the development of an individual's leadership skills. Because if you have three or four people working underneath you on your team, you are now the team leader and team leaders need leadership skills to keep that group moving forward. Building a team is not hiring a couple of people walking away and hoping they can do the job tomorrow. And I'll read you that in a minute, I'm going to give you some of the options involved in building a team. So on Tuesday of last week, I said there are multiple types of teams in Real Estate. I meet people. We have a past client of ours that was involved with us for years that gave up being coached by us because he said he didn't need it because he was going to build a team, no longer produce. And I think today he has 60 or 70 agents on his team.

Mike Ferry: I have to tell you, I think that is almost a real estate company versus just being a team. But there's multiple types of teams, and I want to give you three options, if I may. Option one: A strong production agent, and you're going to determine what that means. If your goal is to do 30 deals a year or 10 or 40. It starts with strong production agent, one or two administrative staff, in most cases, probably one, and then having access to a buyer's agent, either another agent in the office that you can refer buyers to or somebody that handles your sign calls, marketing calls, et cetera. So it's very productive. It's very profitable. You can earn a lot of money. And having that little staff behind you gives you the time to develop your skills of listing property and listing more homes. Option two: A strong listing agent with two or three strong staff support and possibly three to five agents that would be handling all the leads that you have to furnish. See, one of the things that they don't want to talk about in team leadership is somebody has to furnish the leads for all the buyers agents and that somebody is going to be you and I as the team leader. And then we say, Well, how do we furnish the leads? Well, that's going to be in most cases, we're going to be purchasing them from the internet or some other type of lead source because there are multiple lead sources at varying costs that you can experience.

Mike Ferry: But Option two is really a good option if an agent would like to earn substantial money and do 50, 75, 100 transactions a year, which I think a lot of you maybe would be dreaming about. But at least it's a good dream. It's not a nightmare because it could take place. Option three: A strong agent who has stopped personal production, spending one hundred percent of the time hiring, retaining, training, coaching, confronting and holding agents accountable. And a lot of people go down that path. But see the catch with option three is it's a full time job. And so often this whole concept of teams is where we think, Gee, if I get two or three or four buyers agents that are each doing 20 deals a year, and I pay him just a little tiny commission, which they never will stay with you if that is the case, I could probably not work again and have a great life. Well, you know, I wish I was younger and I wish I was taller. I wish I was smarter. And guess what? I can't change what I am, and you're not going to change that scenario, so it makes any sense. So then I went a step further on Wednesday.

Mike Ferry: I said we as we look at this whole idea about teams, and I had to say to all of our clients that we coach, we got tons of responses last week to these emails. I've been asked repetitively, what is the difference between owning a real estate company and owning a team? It's interesting question. Most of you work for a great broker, most of those brokers have been through the training we offer and we appreciate their support. And that's where you should be working in a great brokerage firm that's strong and the community has a good name over the door and that represents you and you represent them well. So in the simplest form, the difference between a real estate company and a team is two-fold. In a Real Estate office, as an agent, the competition often decides what the commission splits are going to be because we're in a commission, split driven industry today; and every broker knows and has to fight that whole concept of the fact that everybody thinks they should earn more in commissions than what the broker offers. And unfortunately, today you can go from paying nothing until you do a transaction to having a normal commission split that a broker really requires and needs to have to keep the company operating effectively. So the biggest difference is the commission splits that are being paid in a team situation, and this is something that you have to understand,

Mike Ferry: the team leader Mike Ferry has for buyer's agents, I'm buying leads off Realtor.com, et cetera. I'm purchasing leads on Google ads, which is a smart way to go less expensive and I'm furnishing those leads to my people, so therefore I can't pay them 80, 85% percent. I'm going to probably start them at a max 50% because then I have to have support staff, a couple of assistants to take care of their transactions. But the second risk between a Real Estate office and a team is in a team situation, the leads are furnished for the agents and, as you know, in a real estate broker brokerage firm, almost impossible. Although I will say to you, I believe firmly and I said this in May to all of the brokers that we had in attendance at our managed retreat, I believe the future of real estate is the brokerage industry furnishing a higher and higher percentage of leads for the people that work for them. So then we went to Thursday, and I said as we continued this brief discussion of regarding teams, we have to be very careful to not get caught up in the hype of having other people earn money for you. I was asked by an agent last week this question OK, "How do I define the job of a team leader?" And here's what I said.

Mike Ferry: A: Maintaining strong personal production. B: You have to recruit both administrative people and salespeople to be on your team. C: You have to learn and understand how to create retention for your team because you don't want to bring people and have them leave, which is what happens in so many firms today. Four: Setting up strong training for both the salespeople, and it has to be probably three times a week. Are you good at training? Five: Coaching, whether we coach for you or you coach them, which is being done both all the time? Six: Setting standards of what you would expect each team member to produce, then holding them accountable to those standards, then the hard one, which is confrontation... If they're not meeting the standards. Creating a business plan and keeping your business very profitable, all at the same time. And this young sales guy I was talking to said, "You're kidding. That's what you think a team leader is supposed to do?" I said, No, no, no, no, that's not what I think. If you're going to build a team, you have to learn the leadership side, which are those things that I just suggested. So then on Friday, I send out a brief email last Friday, which got a big response, and that is the fact that I said, if you're thinking of building a team or running a team, don't get bored with these messages because this is the industry today, which is, of course, the team building concept.

Mike Ferry: But the most interesting magic formula that I see being presented today in our industry, Real Estate, and if you're a veteran, you know this for a fact. If you're new, you'll experience this - There's always somebody dangling a magic formula, a magic answer, a magic pill, a magic wand to suddenly make you a great salesperson. And the most interesting magic formula today is one that's very intriguing. So I'll read you a quote. "Let me coach you and train you how to build a team where you can earn $1 million plus per year or more. And you never have to work again." And then I wrote down: Does anybody actually believe that? Because see, if everybody believed that you could make a million dollars a year or more... Just by building a simple little team, everybody would be having a team of this consequence. And we know today in Real Estate the gap between those that are productive and those that are nonproductive is widening. And it doesn't matter whether you have a team or don't have a team. If you don't understand basic fundamentals of selling, you're not going to have any success as an individual real estate sales person. Nor will you have success selling people on doing what you're asking, which is, of course, part of the leadership skills of building a team. So, probably this was way more information than what most of you wanted.

Mike Ferry: But at the same time, you know, the team is the future of our industry. No question about it. But the big teams are getting bigger and the individual top producers are getting stronger that don't have a team. And my question is, what do you want to accomplish? What do you want to do in 2022? What kind of a year do you want to have production wise? Do you want to become a strong listing agent? Do you want to become a strong agent building a small team? Do you want to do 10, 20, 30, 40 deals here, whatever that number is and do it with a little peace of mind and a little comfort that you can do the job at the highest level for the client? It requires learning how to be a great salesperson, and if we can help you with that process starting today, December 6th, or maybe the month of January, just stay in touch. Look at Mike Ferry TV, go to my website, get the scripts and dialogs we offer, and let's make the month of December a good, productive month for you. You can do this. We know it. You know it. Let's start today. Thank you.