How teams end up ‘burning money,’ and the key to profitability
To be successful, real estate teams need to spend wisely on technology and leads — but first, they must find the right people and “leverage their talent.”
Teams may be one of today's top trends in real estate, but no emerging team is guaranteed success. As Mahala Landin, broker and team leader at North Carolina-based Carolina Collective Realty notes, finding agents who are ambitious and responsive to guidance is key.
"You get behind really dynamic sales people, and you push them, and you help them leverage their talent," Landin said during a recent webinar hosted by T3 Sixty. "That's when magic happens." (Note: Real Estate News is an editorially independent division of T3 Sixty.)
Most new agents need coaching to ensure they are using their time effectively — and team leaders can help.
"For agents, it's just helping them understand where their ROI is and how to be intentional about their business," Landin said.
Working 'smarter,' not 'harder': Successful teams are embracing emerging technology. But that doesn't mean they pour time and resources into every "bright, shiny object" that crosses their path — any team that does will "just spend all the money, and there won't be anything left," Landin explained.
Tools that help agents prospect more and communicate better with potential clients, however, can be valuable. "We're trying to help agents create sustainability and longevity in the business," she said. "Let's work smarter and not harder."
A 'dangerous game' to avoid: Another way to lose money fast? Investing in leads without being sure your agents can convert them into tangible business.
Simply throwing money at lead gen is "a dangerous game for teams to play, because you can't buy your way out of problems — and leads are not the solve for a team," Landin said. "You could have thousands of dollars worth of lead spend, and if you don't pour into the agents' ability to learn how to convert and utilize those leads, you're burning money."
Balance is key to profitability: Financial success can be a balancing act, according to Landin, but agent compensation and efficient operations are two key factors.
"There has to be a really nice balance between what the team provides — in support, resources, training, development, leads, however you want to look at it — and the compensation," she explained. "And then it's really the operational excellence of the company that's going to leave you with profitability."
When AI 'really helps': "I believe that where AI really helps agents the most is getting started," Landin said, because it can give them a "structure or idea to build off of."
In Landin's case, she finds AI useful in creative marketing. "I'm leveraging AI to help me manage my weaknesses and the gaps in my business," she said.
When AI 'falls short': But these new tools still have kinks that need ironing out. "You really have to be careful with things like ChatGPT," said Verl Workman, CEO and co-founder of Workman Success Systems. "It gives you a lot of good stuff, but there's also a lot of stuff in there that's just flat-out not true."
AI tools also operate without emotional intelligence. "That's where AI falls short: Being able to understand motivation between our buyers and our sellers and the distinct nuances of those things," Landin said.