The decision of when to start hiring other people to build a real estate team can be challenging. Many agents wait far too long and spend the majority of their careers working tirelessly without significant improvement in their businesses and lifestyles. Others move too quickly to bring on help, only to find themselves slaves to their new organizational structures. Agents can avoid these pitfalls by using the Three L’s of Real Estate to assess their real estate business before taking the leap of faith into real estate team building:
Realtors should only consider incurring the cost of making their first administrative hire once they are able to generate so much existing business that business servicing activities consistently make it difficult to perform income producing activities. In other words, they have so many listings and transactions under contract that handling the business makes it impossible to try to get more business.
Once an agent has enough leads to keep busy, the next step is to shift the focus to listings instead of buyers. A realtor can handle over three times as many active listings as buyers at the same time. The reason that most top agents are listing agents is because it’s virtually impossible for agents that focus primarily on buyer representation to keep up. Not to mention the fact that listings generate the majority of buyer leads anyway. So before jumping right into real estate team building, make sure that your business is focused on listings.
An agent’s first administrative hire should always be viewed as an investment and never just a cost. So it is essential to be committed to the working principle that the majority of time freed up by this new administrative assistant be filled with additional income producing activities. This is the safest way to ensure that the new hire will pay for him/herself in multiples of the cost over time. For example, if hiring an assistant allows an agent to lead generate for new business 2 extra hours per day, would it be reasonable to assume that this additional business would more than pay for the cost of the assistant’s wages? If the answer is not a resounding yes, then the agent is not ready to make the hire.