I’ve been noticing more and more lately how Edmonton real estate agents are forming teams to “Serve you better”. But I have to ask, does it really benefit the customers? Sometimes it does. Sometimes it’s just a marketing strategy.
I’ve spent some time on this subject over the past year, as I’ve been rebuilding my own real estate business. Through this, I’ve categorized real estate teams into 3 groups:
1. More Agents, Not More Clients
This is a fairly rare model in the Edmonton real estate landscape, but one that I think should be noted all the same. I’ve only seen it successfully dome once, and that’s by a couple of guys in my own ReMax office. They go together on all of their appointments, so that the clients know both of them.
This would be a highly effective model for the client, as they get 2 agents present for all discussions. They also benefit from never being “handed off” when their agent goes on holiday; as these 2 guys never holiday together.
The weakness is in the cash-flow. You have 2 agents who have to make a living from a single set of clients. That means 2 office bills, 2 mortgages, 2 car payments, etc. But they make the same as a single agent, so there’s less margin available. That means less advertising when the market gets tight.
2. Several agents, several clients.
This real estate model is what we see most in Edmonton. It’s the flavor of the decade, as it were. Basically, a bunch of agents get together and become a team. They service their individual clients, pool their production to get more awards, and share some marketing costs to reduce expenses or increase their reach.
The advantage here is that you tend to get a professional group of agents. They usually group around a single experienced real estate agent (the rainmaker) who leads the team and gives everyone direction. Their expenses are lower than single agents, so they can do more marketing to bring in new business.
The disadvantage is that this doesn’t really ever benefit the client. Why not? Well… you only ever deal with 1 agent at a time. So 1, 2, or 10 agents doesn’t matter; only 1 of them can show you homes or negotiate your offer at a time.
I spent 7 years in this business model, and I have to admit that it is effective. The biggest advantage in my opinion was that I could take a day off, recharge my batteries, and know that my clients were being taken care of.
3. 1-2 Agents and a Group of Specialties
In Edmonton we don’t see this a lot. In fact, I can only think of 3 or 4 instances of it existing. But it is, from a customer standpoint, the most powerful and effective team possible.
Typically there’s only 1 agent on this team (sometimes 2) rather than a group of realtors. He/she can often be identified by massive production and very little free time. What makes this model so ridiculously effective is that the additional team members aren’t Realtors… they’re unlicensed support personnel, and industry professionals.
I first came across this model in Souther California. A single Relator was selling about 350 homes per year, with no “buyers agents”. Instead he had more than a dozen administrators who were incredibly effective at their own job; they were the best at what they do.
He also had industry professionals who were on his team. But they didn’t just have him as a referral source, like most inspectors/lawyers/lenders interact with most Realtors, but instead were available “as part of the team” to contribute wherever they could. So he had a lawyer on speed dial to answer litigation questions for him. He had a termite inspector to assess the situation over the phone (am I ever glad I live in Edmonton, where termites aren’t an issue!).
The effectiveness of this model is amazing to behold. With a single Realtor, there’s only 1 direction. This means the team moves forward quickly, and can adjust to changing market conditions very quickly.
Because each team member of specialized, the client gets a higher level of service from the team as a whole. Costs are reduced for the client because much of this advice and “on call” service is free; it’s just part of the package.
So why don’t we see it more often? Well, there’s 2 big reasons. First, it requires a ridiculous amount of personal time and commitment from the Realtor. Every single phone call, all the showings, every listing and seller… it’s all 1 person. Can you spell b-u-r-n-o-u-t ?? Second, building such a team is hard to do. Finding the right professionals, the right personalities, and trusting them to do their part the right way… that’s not easy to do!
So there you have it; 3 “team models” that exist in the Edmonton real estate market. Which would you want representing you?
