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Real estate teams get most deals from their ‘sphere of influence’ by Jeff Andrews for HousingWire

HousingWireHousingWire

Brokerages are scrambling to adapt to the post-settlement landscape of real estate, and more of them are turning to the same method for growing their headcount — acquiring new teams.

The addition of teams is an efficient way for major brokerages to bolster agent counts and boost sales volumes on their income statements. But a new survey reveals diversity in the ways that teams are structured and how they produce different outcomes.

The survey — conducted by RealScout in conjunction with Tom Ferry and T3 Sixty — produced 350 valid responses from team members on the subjects of expenditures for growth, organizational diversity, “sphere of influence” leads and broker sentiment.

Overall, teams with two to five agents spend less on lead generation than teams with six or more agents. That’s because larger teams tend to have larger budgets and thus more money to spend on leads.

They also have more bandwidth to process these leads, target higher-quality leads and pay higher referral fees. Conversely, smaller teams don’t have the same access to capital or operational capacity to convert the leads once they have them.

But the survey results also show that so-called sphere-of-influence (SOI) leads — those generated through relationships with friends, family and former clients — are often neglected and underinvested in. These leads require long-term efforts, patience and cultivation of relationships through emails, newsletters and other marketing tactics.

When asked where most of their deals come from, about 80% of small and large teams cited SOI. Despite that, more than half of respondents said that systems in place to capitalize on SOI are only “basic,” while 39% said they are “advanced.” Another 5% said they are “nonexistent.”

Despite a frozen housing market and significant uncertainty related to the National Association of Realtorsantitrust settlements, teams are generally optimistic about the future. 

About 45% of respondents say it’ll be easier to recruit agents, as many will be more interested in joining due to the settlement. Relatedly, about two-thirds of respondents expect the new settlement rules to have minimal or no impact on their business.

Respondents also shed light on team structure. The median team size increased from five in 2022 to six in 2024. Large teams also staff for recruiting, agent support, coaching and operations much more often than smaller teams. Marketing and transaction management roles account for the most non-agent staffers among small teams.

Legally speaking, most teams are either an LLC (38.9%) or an S-Corp (34.6%), while 15.7% are not a legal entity.

With transaction volume down and commission rates expected to decline as a result of the settlements, the fate of brokerages has been top of mind. Data from AccountTECH shows that smaller brokerages are generally less sensitive to falling commissions, precisely because they don’t have large overhead costs like office space, management and administration.

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