{"id":4539,"date":"2023-07-24T21:32:58","date_gmt":"2023-07-24T21:32:58","guid":{"rendered":"https:\/\/www.realtrends.com\/blog\/2023\/07\/24\/whats-old-is-new-a-deep-dive-into-the-teamerage-revival\/"},"modified":"2025-03-13T02:52:21","modified_gmt":"2025-03-13T02:52:21","slug":"whats-old-is-new-a-deep-dive-into-the-teamerage-revival","status":"publish","type":"post","link":"https:\/\/www.realtrends.com\/blog\/2023\/07\/24\/whats-old-is-new-a-deep-dive-into-the-teamerage-revival\/","title":{"rendered":"Why the \u2018teamerage\u2019 is the fastest-growing model in real estate brokerage"},"content":{"rendered":"\n

Doug Danzey describes himself as a natural trainer and mentor. So when he found himself helping more and more new agents, he decided to fold his mentorship work into his real estate business, and thus The Cobalt Group<\/strong> was born.<\/p>\n\n\n\n

\u201cI saw the direction things were going in and I thought that it only made sense for me to form a team and get paid for the work I was doing,\u201d Danzey, whose team is brokered at eXp Realty<\/strong><\/a>, said.<\/p>\n\n\n\n

Today, the Massachusetts-based Cobalt Group has its core team of agents who operate as a traditional real estate team, but it also has other independent agents who work under the group\u2019s overall umbrella, a key characteristic of what many in the real estate industry are now referring to as \u201cteamerages.\u201d<\/p>\n\n\n\n

\u201cSide\u2019s thesis is: teamerages are the future,\u201d Steve Capezza, the president of white-label brokerage Side<\/strong>, said.<\/p>\n\n\n\n

But what exactly is a teamerage and what sets it apart from a real estate team? That depends on who you ask.<\/p>\n\n\n\n

The defining teamerage trait? Leads, leads and more leads<\/h2>\n\n\n\n

Some in the industry, like RealTrends Consulting<\/strong> co-founder Steve Murray,<\/a> believe a team can only be a teamerage if it is a standalone real estate brokerage, either independent or part of a national franchise network, that operates like a real estate team.<\/p>\n\n\n\n

\u201cI don\u2019t really recognize teamerages,\u201d Murray said. \u201cIf a team leaves a big brokerage to become a standalone brokerage, then they are an independent brokerage. They may still operate their internal business like a team, but that is just the operation model they use.\u201d<\/p>\n\n\n\n

Others, however, believe teamerages can exist within franchises or national brokerages such as eXp Realty or Side.<\/p>\n\n\n\n

\u201cThe teamerage is able to offer independent agents all the benefits of a team but really allow them to keep their individuality,\u201d said Michael Ward, the head of teamerage at Keller Williams<\/strong><\/a>. \u201cIndependent agents see it as the opportunity to receive leads and strategic coaching. It is really about building the agent of the future through hands-on engagement, but without the specific culture focus a lot of teams have.\u201d <\/p>\n\n\n\n

Despite their different viewpoints, what most can agree on is that teamerages supply their agents with more training, mentoring and services, such as transaction coordination, listing management, compliance, marketing, a CRM, and other technology tools than most traditional brokerages. Most teamerages also supply their agents with leads, which can be bought from a lead aggregator like Zillow<\/strong><\/a> or Realtor.com<\/strong><\/a>, or are from the team leader\u2019s own lead generating activities.<\/p>\n\n\n\n

\u201cA lot of people will identify what a teamerages is in that you almost have to provide some sort of lead support,\u201d Dan Walters, the CEO of Orlando-based Robert Slack Group<\/strong><\/a>, said. \u201cWe have multiple lead sources and they are changing all the time from what we call a CPL model, or a cost per lead model, where we buy leads or work off referral leads.\u201d <\/p>\n\n\n\n

Leads are a major reason why the teamerage model is taking off and why agents keep joining teams, proponents say.<\/p>\n\n\n\n

\u201cWith us, our agents have multiple lead sources and they learn which ones they are better at converting than others and they have to give up a little margin every year so we can continue to fund that for them, but they are willing to do it because it is difficult to be out there on your own as an independent agent or to be at a brokerage that doesn\u2019t provide you with leads or support,\u201d Walters said. <\/p>\n\n\n\n

The Robert Slack Group currently has 725 agents and Walters said it is gaining roughly 30 agents a month. Others are on a similar growth trajectory. <\/p>\n\n\n\n

At Keller Williams, 330 of the firm\u2019s 798 market centers are running a teamerage model and an additional 209 market centers are in the process of becoming a teamerage, according to the firm.<\/p>\n\n\n\n

\u201cBack 10 years ago in our business, agents on teams represented about 10% of all agents, and today it is about 40%,\u201d Gary Keller, the co-founder of Keller Williams, told attendees at Gathering of Eagles last month<\/p>\n\n\n\n

Like Walters, Keller believes the leads are key to the proliferation of teams at Keller Williams.<\/p>\n\n\n\n

\u201cIt doesn\u2019t take more than five or six closings a month, where you are collecting a lead generation fee and then you are on a big 50% split for that agent \u2014 which they\u2019ll do all day long for a good lead,\u201d Keller said.<\/p>\n\n\n\n

Between 2021 and 2023 the number of verified team submissions to the annual RealTrends rankings<\/a> rose 39% to 11,630 submissions.<\/p>\n\n\n\n

Fatter profits and better-trained agents<\/h2>\n\n\n\n

Many attribute the model\u2019s popularity to the higher profit margins than a traditional brokerage model, where margins currently hover around 3%. Teamerage profit margins, sources said, typically range from 10% to 20%.<\/p>\n\n\n\n

\u201cYou just have to look at the shift in margins for brokerages over the years and the depletion of profitability and it is clear why teams have become more popular,\u201d Ward said. <\/p>\n\n\n\n

In addition, teamerages provide agents with the services and training that many brokerages no longer supply. This allows the brokerages to outsource some of the mentorship and tools they could be providing agents with to team leaders, while still reaping the benefits of better trained and equipped agents. <\/p>\n\n\n\n

\u201cWe teach on all different types of top topics,\u201d Ryan O\u2019Neill, the leader of the Minnesota Real Estate Team <\/strong>at RE\/MAX Advantage Plus<\/strong>, said. \u201cFor example: how to get more listings, how to work more effectively with buyers? What are the best social media practices in our market? What are the best financial strategies to run as a real estate business? So very practical things that can help our agents do more business, make more money, [and] be more efficient with their time.\u201d <\/p>\n\n\n\n

Extensive training and hands-on mentorship should be standard for all agents, Murray said.<\/p>\n\n\n\n

\u201cI look at these new agents who just got their license and I am wondering who is training and mentoring them to actually do transactions,\u201d Murray said. \u201cI think the industry should move to more of a team model if they want better trained agents.\u201d <\/p>\n\n\n\n

Despite this belief, Murray is not sold on the assertion that teamerages are essential for a brokerage\u2019s future success.<\/p>\n\n\n\n

According to RealTrends data, between 2011 and 2022, the top 250 individual agents increased their per person closed transaction count by 13.9%, while the top 250 teams increased their closed transaction count by 405.4%. However, this gap shrinks considerably when looking at sales volume. During the same time period, the sales volume for the top 250 agents rose 257.3%, while it rose just 288.9% for the top 250 teams. In addition, the top 250 agents saw the average price of homes they sold rise 761.6%, while the average price of homes sold by the top 250 teams fell 23.1%.<\/p>\n\n\n\n

\u201cI don\u2019t think you have to embrace teams to be a successful brokerage,\u201d Murray said. \u201cIt may limit your size and your growth, but I think you can still be successful without teams. But individual agents are doing more of the higher priced stuff than the teams are. Teams tend to be in the lead generation business, which is typically the mid-level retail. Clients with higher priced homes don\u2019t look for an agent online, they usually already have that strong relationship in place so they go directly to their agent.\u201d  <\/p>\n\n\n\n

Chris Suarez<\/a>, the co-founder of venture-backed PLACE<\/strong><\/a>, the country\u2019s largest mega team<\/a> per the RealTrends rankings, believes teams have the ability and potential to work with many of those high-end clients. <\/p>\n\n\n\n

\u201cMany times those teams are built with newer agents first, and that’s because the team owner hasn’t built a value proposition to attract experienced agents,\u201d said Suarez. \u201cFor us, at PLACE, we have teams where the entire team’s average sales price is above $1 million or above $2 million. We work with a lot of luxury teams as well. So that hasn’t been naturally our experience.\u201d<\/p>\n\n\n\n

Why some brokerages are embracing the teamerage model<\/h2>\n\n\n\n

Although the RealTrends data shows the value in investing in top performing individual agents, national franchises and brokerages are still looking at improving how they serve teams.<\/p>\n\n\n\n

According to Capezza, teamerages are what Side specializes in and does best.<\/p>\n\n\n\n

\u201cWe are the purest form of enabling one to exist, given that we are white label and provide brokerage as a service,\u201d he said. \u201cWe empower and enable top real estate professionals to own and operate their own real estate company. No one else does that, so while you may build a team or a teamerage at another firm, that brokerage owns your business and you simply operate it for them. At Side we yield full ownership of their company to them because they are the ones creating value and that is where we really lean into ownership. We believe those partners, the team leaders are the ones creating value for customer. We act as the broker as a service and simply empower and enable them to deliver on those outcomes.\u201d <\/p>\n\n\n\n

With its cloud-based model and national footprint, eXp Realty also says it is a natural fit for teamerages.<\/p>\n\n\n\n

\u201cIn my opinion, we are probably the best place for teamerages who are truly independent, but want the support of a bigger brokerage behind them,\u201d Leo Pareja, the president of affiliated services at eXp Realty, said. \u201cWe are the single largest monolithic independent brokerage in the country. I used to be the leader of a mega team at Keller Williams and when I expanded geographically either in my state or in another state, it became very expensive because the second I left my franchise territory I had to negotiate a new deal with a different franchisee because I was in their territory.\u201d <\/p>\n\n\n\n

At eXp, Pareja said that since it is one firm, this is no longer an obstacle to teams and teamerages with expansion plans. The national franchise firms, however, don\u2019t share the same view.<\/p>\n\n\n\n

\u201cGiven that we are in the franchise system, it does mean that leaders have to have relationships with varying brokers across state lines, but we have not found this to be a huge obstacle or hurdle,\u201d Amy Lessinger, RE\/MAX<\/strong><\/a>\u2019s senior vice president for region development, said. \u201cOur brokers are very reciprocal and they get that there is mutual benefit when a team wants to cross state lines and we found that they work great together.\u201d <\/p>\n\n\n\n

Robert Lucido, the chief strategy officer of <\/strong>Lucido Global<\/strong><\/a>, a mega team out of Keller Williams, said he too has not had any struggles expanding his organization outside of his base Keller Williams franchise. <\/p>\n\n\n\n

In the Keller Williams model, agents are given their splits by their market center, and, according to Lucido, many market centers offer agents incentives, including lower commission caps, to form teams. <\/p>\n\n\n\n

\u201cMost of the time, the split is established by the market center and is ubiquitous for all agents in the market center,\u201d said Lucido. \u201cMany market centers offer half caps for agents that are on teams. The team leader pays full cap, the other agents on the team pay half cap. Some market centers offer team caps such as $50,000 for the whole team for the year for example.\u201d<\/p>\n\n\n\n

Lucido said that teams partnering with Lucido Global pay a revenue share tied to services provided. In other words, the fewer services a team utilizes, the cheaper it gets, similar to how The Cobalt Group in Massachusetts operates. <\/p>\n\n\n\n

Beefy tech offerings<\/h2>\n\n\n\n

Lucido Global\u2019s growth is mostly due to its tech, inside sales, digital advertising as well as its onboarding programs, Lucido said.<\/p>\n\n\n\n

\u201cOur teams get world class inside sales operations for the fixed cost of a virtual assistant,” he said. “Big teams are joining us now to seize market share while other teams falter and solo agents leave the industry.” <\/p>\n\n\n\n

According to Lucido, the inside sales department of one of his teamerage’s eight-person teams generated $163,000 in May during its first 30 days with Lucido Global.<\/p>\n\n\n\n

Although Lessinger believes the RE\/MAX brand and the opportunities for expansion within RE\/MAX definitely help the firm attract teams, she said RE\/MAX has also worked to improve the technology it offers agents and teams.<\/p>\n\n\n\n

\u201cTeamerages, as well as agents of course, want systems that enable them to maximize their time in the business \u2014 automate their marketing, manage their leads and connect them with those transaction ready clients,\u201d Lessinger said. \u201cWe wanted to provide them with the very best so we partnered with Inside Real Estate<\/strong> and now all of our agents and teams have access to the kvCORE<\/strong> platform<\/a> at no cost to them.\u201d <\/p>\n\n\n\n

So far, it appears this approach is paying off. According to Johnnie Morine, who recently brought his teamerage of over 30 agents to RE\/MAX<\/a>, opening RE\/MAX Empire<\/strong> in Arlington, Texas, technology was a major reason why he made the move.<\/p>\n\n\n\n

\u201cOur agents already have the knowledge and dedication to make it in today\u2019s market; now they have a global brand beside them to grow market share, an extended suite of resources and technology to lean into, and robust educational opportunities to help them master new skills \u2013 all of which is also a benefit to their clients,\u201d Morine said. <\/p>\n\n\n\n

At Keller Williams, Ward said the firm is also investing in its technology tools for teams, by finding ways to use artificial intelligence<\/a>  to identify which agents in a teamerage will have the best chance at converting the lead to a closed transaction.<\/p>\n\n\n\n

Throwback to the brokerage glory days<\/h2>\n\n\n\n

While the technology offered by the brokerages to attract and retain teamerages is all new, Adam Hergenrother, the CEO of the Vermont-based teamerage LIVIAN<\/strong><\/a>,<\/strong> which is brokered by Keller Williams, feels the overall idea of a teamerage represents more of a full circle moment than something brand new.<\/p>\n\n\n\n

\u201cIf you go back to the 1970s and you look at Century 21<\/strong>, they were a big team,\u201d Hergenrother said. \u201cEveryone wore the same gold jacket<\/a>, had the same signs, got leads from the brokerage house and their listing packet right from the firm. Essentially 50 years later we are coming back in a roundabout way to the original point of what real estate was, which today we are calling teams and back then was just called brokerages.\u201d <\/p>\n\n\n\n

Ward of Keller Williams shared a similar sentiment: \u201cThere is nothing profound about this model, a lot of brokerages used [it] way back in the day. It\u2019s just that now the market has shifted and some brokers or team leaders are looking for new ways to drive value to their agents and increase revenue.\u201d <\/p>\n\n\n\n

Brokerage and teamerage leaders believe the services\u2014such as those offered by Century 21 in the 1970s and the teamerages of today\u2014empower agents to provide better service to their clients.<\/p>\n\n\n\n

\u201cTeams have much more control (than brokerages) over how the agents operate and the values they embody. It\u2019s part of what makes teams so unique and durable when they get the right mix of people. Teams have guardrails that say, \u2018This is the level of service we provide to our customers.\u2019 There is a level of supervision to them,\u201d Sunny Lake Hahn, a partner at 7DS Associates<\/strong>, said. \u201cAgents are going to use these systems and these processes and team leaders actually know how to take care of the client.\u201d<\/p>\n\n\n\n

In the near future, many team leaders and brokerage executives feel that providing high-touch customer service will become even more vital. <\/p>\n\n\n\n

\u201cThe current state of real estate is held up by 50% of professionals delivering great outcomes and the other half not so much<\/a>,\u201d Capezza said. \u201cThis model, because of how it is centered around a collection of agents who believe in a certain set of standards and hold each other accountable, enables the brokerages who embrace it to thrive in the future because it will lead to better outcomes for customers.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Why some brokerages are embracing the fatter-margin ‘teamerage’ model, and its prospects for further growth.<\/p>\n","protected":false},"author":34740,"featured_media":4822,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3255],"tags":[],"coauthors":[1760,3189],"class_list":["post-4539","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archive"],"acf":[],"yoast_head":"\nWhy the \u2018teamerage\u2019 is the fastest-growing model in real estate brokerage - RealTrends - Blog<\/title>\n<meta name=\"description\" content=\"Why some brokerages are embracing the fatter-margin 'teamerage' model, others are not, and its prospects for further growth.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.realtrends.com\/blog\/2023\/07\/24\/whats-old-is-new-a-deep-dive-into-the-teamerage-revival\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why the \u2018teamerage\u2019 is the fastest-growing model in real estate brokerage\" \/>\n<meta property=\"og:description\" content=\"Why some brokerages are embracing the fatter-margin 'teamerage' model, others are not, and its prospects for further growth.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.realtrends.com\/blog\/2023\/07\/24\/whats-old-is-new-a-deep-dive-into-the-teamerage-revival\/\" \/>\n<meta property=\"og:site_name\" content=\"RealTrends - 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