The Truth About Building a Real Estate Team

Bernie Gallerani and his operations manager, Curt, didn't plan to build one of Tennessee's highest-producing real estate teams. They just started solving problems — and kept going for 10 years. In this candid conversation, they pull back the curtain on every stage of the journey: the mistakes they made hiring agents, why recognition beats money as a motivator, how to structure leads for new agents, and what has to change culturally when you scale past 50 agents. If you're building a team or thinking about it, this one's essential listening.

Transcript

SPEAKER_01 0:00

Hey guys, it's Bernie Gallerani again, bringing another episode of Success is Not Convenient. We have a fun one today. This is one I'm looking forward to doing. We talked about it about a week and a half or so ago, and we put together some information about how to team build and not only how to team build, but more importantly, how and what and what our challenges have been by team building. So I brought my partner in, uh Kurt. Kurt's been an operations manager for the last 10 years. Um we were what, four agents when you got here, maybe something like that. So we were a small, small little group. Um I was selling a lot of houses personally, and I had some agents and I needed some help and brought Kurt in. And Kurt has really done a fantastic job in helping us just kind of launch this thing to what it is today. So it was fun because when did we celebrate our $2 billion in sales? Was it about six months ago, maybe? Yeah, right about six months. Six months ago. And so Kurt and I have uh have worked together for the last 10 years to build um our agent team. We're doing just under 300 million right now. And so I went to Kurt and I'm like, you know what would be fun to do is build a uh do a podcast and just kind of share with everybody out there our struggles, what we've learned from team building, um, and maybe give some good insight to those people who are Air considering building a team. It's a great option if you guys choose to do it. We can certainly hopefully give some insight to there. And if uh you're an agent, maybe you can learn some things um from here. So uh Kurt, thank you for thank you for having me. This is gonna be a fun conversation. Being a part of of all of this. So it's uh and here's the good news Kurt and I are uh gonna be really well rehearsed here because we just filmed it for almost an hour and forgot to hit the record button. So my hour or so podcast.

SPEAKER_00 1:38

They should get a better video now.

SPEAKER_01 1:40

Yeah, we're we're nice and warmed up and prepared, right? So um so it's fun. So when you came to us uh uh 10 years ago, I guess 2016, right? Yes. When you came to us, you were in like the restaurant business, I think, right? Previous to that.

SPEAKER_00 1:52

I mean, like 15 years in the restaurant business, had worked for a bunch of big corporate companies, had done my own. And so I was coming in totally fresh to this business, and and I think we felt like taking more of a like a training approach and and and being you know better suited to you know how do we help our people succeed, yeah, was gonna work, which is why I think we were hopeful that it was gonna be a good match.

SPEAKER_01 2:17

Well, I don't think you or I even expected to have what we have today. I mean, I don't that wasn't my vision, right? I was I was really just trying to um get some help with the team. Sure. Sure. And I'll never forget when you you, I think it was a few months. Um, you had kind of solved some of the problems that I was dealing with with the the team at the time. And uh you're like, okay, well, now what do you want me to do? I'm kind of bored. I'm like, I don't know, go hire somebody else. Yeah. So we worked on that. So we worked on that. And what was fun is um I think we had, I don't know, maybe eight agents at that time. And we had people working in the kitchen. Well, you were working in the kitchen. I was working in the kitchen. You were working in the kitchen, we had people in the conference room prospecting until we had closings, and when I could kick kicking out the agents that were prospecting, and so it was quite the operation. And I and I even remember um, and so just so everyone knows today, like we're in a 12,000 square foot building, and back then we were in a um 1,800 square foot building, and um, we decided to go lease some space next door, and that was pretty scary, right?

SPEAKER_00 3:17

Yeah, we're like, oh gosh, can we pay the rent over there?

SPEAKER_01 3:19

Like, I remember calling my my my coach Mike Ferry and just saying, Hey Mike, man, I mean I'm gonna have to move over here. And and he asked me, Well, how much is the rent? And I think I was like 2,000 a month or something. He goes, like, well, what about lights and electricity? I said, maybe 3,000. And he says, Come on, man, that's a no-brainer. You know, so you know, you you you it's fun to look back and think about the fears, sure, right? I mean, and this is a good conversation because people that are thinking about building a team have a lot of what-ifs, like, well, what if this and what if that? We we've been through all those early what-ifs, we still have a lot of what-ifs. We do. Um, so what I want what I want to try to do today is try to help people to understand a little of our journey. And I think even sharing our pain, sure, right? Like, what was our hardest time, right? So, well, let's just get into like what we think what's the best way we can help people who are listening. So let's just start with team building. What's the biggest you think misconception that um an agent has about joining a team like ours?

unknown 4:20

Yeah.

SPEAKER_00 4:20

Well, and when we first started, teams didn't even exist, right? So as we were pitching our program, uh agents were just like, Well, I need to join a brokerage, so we'll I'll give you a shot, right? Yeah, um, I think agents sometimes when they're uh considering a team, they are actually thinking that it's probably gonna be easier than it really will be. Okay, right. And and because because we we're gonna make it sound easy in the interview, unfortunately. Um but but they think that with our support, it's gonna feel like just any other job. And it and it doesn't work that way. It's actually a really difficult business that we're in. And so even with our support, which is gonna give them a better chance to make it than they ever would have on their own, it's still a really difficult business to yeah.

SPEAKER_01 5:08

When you say you said we make it sound easier, is because to us it seems easier.

SPEAKER_00 5:15

Yeah, well, because we've built the systems over the years and we've got the processes that work. So we watch it work every day. And so for me to watch an agent go out and sell 20 or 30 homes a year, that seems very achievable, right? Because we see agents do it all the time. But when you're in a brand new agent and you've sold zero houses, that learning curve is very steep.

SPEAKER_01 5:38

Because I like what you said, and and I think that when we coach and train agents and we have conversations through the journey that they have with us, as we speak, it sounds easy to us, right? Because we've lived in that ecosystem for so long. To us, um, uh, like what do they say? It's uh you know, it's a very uh simple business, the simple concept of the business is just not easy. Yes. And the not easy is that we're trying as agents, new agents, trying to process it all, right? So um, so what I I think what you what I I think what I what I'm hearing you say is when you present it, you look at the simple side of the system, right? Yes. You come in, you pick up leads, you you you have some training calls that we put you on, and you be the great fantastic agent that you are, and then you sell a bunch of houses and make a bunch of money. Does sound pretty simple. You just trust it. Yeah, it's not that easy. It's always so it's it's really the is it the behavior of the agent that's the hard part, it's not the system.

SPEAKER_00 6:33

Well, I think I think we're always fighting the behaviors of the agents because if you really want to think about why most people get into this business is they've got that entrepreneurial spirit, right? There's nothing wrong with that. But when you're an independent contractor, I think you kind of get this your focuses are on all of the freedoms that you're gonna have versus really realizing what you're about to commit to.

SPEAKER_01 7:00

Yeah, my take on all of that is life's just a lot harder than we envisioned it to be. I mean, people all say, Oh, that took me a lot longer than I thought, or that was a lot harder. I think most things are a lot harder than than people think. It's just we're not familiar with it, right? In our experience, through training and hiring agents, what do most team leaders miss out on when they're looking at bringing agents in? And and is it controlling, is the team leader missing understanding controlling the difficulty that an agent has? Like, is it the difficulty? Because we're not we're talking about agents who are coming in. We we've experienced hundreds of agents, right, within our organization. Team leaders now looking and listening to this, what should they be focused on so they can improve their interview process, their coaching, their training, their accountability?

SPEAKER_00 7:51

Well, and and it I guess it depends on what your goal is, right? If you want to have just a pretty traditional brokerage with agents selling two to four homes a year, you can probably get away with, you know, hey, let's just give this thing a shot. For us, the investment is super high in each agent. So we've got to be pretty sure that they're gonna have some success before we agree to bring them in. And so what what I'm really looking for is I've got to find someone who's the breadwinner in their family, right? Because unless you're the breadwinner, sometimes it's very, very hard, no matter how skillful you think you are or how hard you want to work, until you absolutely have to make it work. The rejection is just so high in our business. Sometimes you can over overcome that.

SPEAKER_01 8:36

I think all of us who run teams have high levels of expectation because we've done it at a high level, or we typically wouldn't be a team owner. Or if you're not if you haven't sold real estate at a high level, you probably shouldn't be a team leader, would be my would be my suggestion. But I I could be wrong there. Um I would say that we have to lower our expectations because I have very high expectations in the agents that come in here. And what I've learned over 22 years is I have to lower my expectation. It doesn't mean I have to lower my my um my accountability. It doesn't mean that I have to lower my standards in any way, but I have to look at an agent and say, how do I meet you where you are? I used to think everybody, and I still believe everybody can, everyone can sell 50, 60, 70 homes a year. Just most choose not to. Yes. And that that I don't relate to. I can't understand why they wouldn't want to do it, but everybody has a different life. And so they look at things um a little bit a little bit differently. So what do you think when when you hear agents saying, I like to be, I would like to be trained and I'd like to be held accountable. So you'll hear do you hear that a lot from Well Well, that's what they all want is training.

SPEAKER_00 9:41

And and every broker out there, you're gonna sit with them and they're gonna tell you that their training is the best, right? Every broker is gonna feel that way, you know, and I think training can be defined lots of different ways. Um the accountability sounds great because as human beings, we all know that you know, if left to our own devices, we're probably not gonna, you know, be super motivated, right? And unless something is really driving you to have to succeed every single day, um, which is why we mentioned the breadwinner. Yeah, um, it's really hard for us to motivate the agent. It just is.

SPEAKER_01 10:15

They want the success, I think, but they don't want to change who they are to get it, right? So have you ever seen an agent come in here and not not struggle? Like even the top agents, let's go with our with our top people, right? Making, let's just say half a billion bucks a year or more. Um, have you ever seen anybody come in and do a really excellent job at the job of selling houses and serving people where they didn't have to change their thought process?

SPEAKER_00 10:39

No, everyone has to change it at some point. And and for each agent, they're gonna hit that wall at a different production level, right? I never really know where that pain point's gonna show up because everyone has a different bandwidth when they come in, right? You know, or a different motor, however you want to look at it. Um, but everybody is gonna get to that breakdown moment where they realize, oh gosh, this is gonna be a lot harder than I thought it was gonna be.

SPEAKER_01 11:04

Yeah. Yeah. And you wonder like how because there's a lot of really I'm I've met some tremendously great people who just couldn't do it, no matter how hard they tried, right? We've had several people who dedicate incredible people so much time um in the company and they just aren't successful. What what is the uh what is the reason do you think because you and I have always talked about we have no idea we could love them at the presentation, or we could not even think they were that great at the presentation, but thought they could sell. But we bring them into the company, and ones we think are gonna be really great, not good at all, and other ones are like, okay, maybe they'll be okay, and then they end up setting the world on fire.

SPEAKER_00 11:43

Yeah, I mean, I think you either have it or you don't, right? Because it you're gonna have to ask the client to sign the contract, you're gonna have to ask them what they want to offer on the house. And you know, there are just some people that really struggle with asking for the business. I actually think that that is like the one moment in time that you lose the client, and the client is gonna feel that, right? So I can't teach you, I can teach you what to say, but I can't teach you to have that burning, you know, desire within you. It just you either have it or you don't.

SPEAKER_01 12:15

Yeah. And I don't like I said, you can't teach them, right? You can't teach them, and I don't even know if it's I don't even know if it's a burning desire as it is. Maybe some people just don't have good conversational skills, I guess. I mean, I I I I there we have an ones coming to my mind who is a sweet person, um, love this individual a lot as a person, um, but just struggles with continuing to connect people. But I connect with the person really well. I think everybody in the company connects with the person well, but they have a hard time connecting with a client well to drive their business. So, what what do you think that's that's all about? Why do you why do you think that's an issue for that particular person?

SPEAKER_00 12:52

Well, I think it's a skill. No matter what, you have to look at it as a skill. So um, we spend a lot of time on role play in our company, right? And because I know that when you get into these critical conversations, how you handle it, the questions that you ask, the confidence that you bring to it, that's gonna determine the outcome. So, really, what that person probably is not doing is they're probably not spending enough time in their downtime perfecting these conversations that they need to have with the clients.

SPEAKER_01 13:23

So it's really not that they don't have the ability to be good with people, meaning connecting with, is they haven't perfected or even gotten decent skill enough to make people feel good. Because I need more reps. You know, I actually that's interesting. I guess people, some people have really good relationships and know how to talk to people when they know them. And other people, because when another one comes to mind, which is another female who this particular individual has been with us a long time, and she connects with every single human being on the planet, and everybody loves that person. Yes, but yet it's not overly skilled, just really great connecting to people.

SPEAKER_00 13:57

I don't even think she knows that we have a script book burning. I don't think she's like you could you could give her one and she'd be like, What is this?

SPEAKER_01 14:03

You could have given her one 10 years ago and she's never even opened it up.

SPEAKER_00 14:06

And recently, that agent she got involved with a deal that was gonna get canceled and we were gonna get fired on a purchase and a sale. She gets involved in it and she saves the whole thing. I I know, I know. I honestly she's the most unbelievable.

SPEAKER_01 14:20

She's really the most spectacular personality that I probably have ever come across. And uh I did a I went on a presentation with her on a very expensive home with a three million dollar property, and um I did the presentation for her. She was a little nervous about that particular one, so I went with her. And so she didn't say, I said, do me a favor. I'm like, just let me do it. She's like, okay. And I and so I went in, we we got the listing signed and all that kind of good stuff. But she only opened her mouth, maybe four words came out the whole time we were there. And the client looked at her at the end and goes, Oh my god, I just love you. You're great. That's awesome. You know, I'm like, and I walked out and I said to her, I'm like, I don't know how you do it, but you just have to be there and smile at people and they they just melt, you know, melt in your hand. Um, all right. So the next question what's harder holding an agent accountable or training an agent?

SPEAKER_00 15:10

I think a lot of people would say the training, but I'm gonna I'm gonna say accountability, right? Because the training never ends. We're always training, but you know, it's not always gonna stick, right? What can they even really receive at any given time? But it's the accountability because they have to be willing. Not only do they have to participate, but they have to be willing to be held accountable. And every agent's gonna need a little bit of a different accountability mechanism. So the coach really struggles with well, what do I need to hold this person accountable for in order to move their business forward? Because it's gonna look different for every agent.

SPEAKER_01 15:42

It is. And I think people like the idea, I think people like training and I think they like to learn, but there's a difference between learning information. And here's where we talk about like brokerage firms who every agent maybe thinks their brokerage firm is the best. And so when you you and I've talked to a lot of agents where they'll go, Well, we have training at our firm. Yes. So they like training, they like knowledge, they like information, but it's not the information and the knowledge that makes them a great agent. And if we look up at anything about growth, personal growth is about accountability. Yeah. And so they love the training, they clamor for, hey, by the way, we're gonna have a sales training on listing homes today. Everybody shows up, you know, we're gonna have a conversation about how being better with your clients. Everybody shows up, it's a training session. But yet the accountability piece of actually getting them to do it is where it falls short.

SPEAKER_00 16:35

And I talk to a lot of agents who probably don't need us as much for the accountability. And then the real question is gonna be you know, how fast can I help you build your business? Right. Because if you're really a strong-minded person and you're you're regimented in how you approach your life and and you're gonna hold yourself accountable, well, then we get to have a whole different conversation with you. We get to move really fast. And that's where some of the sometimes we can have a lot of fun with newer agents in the business.

SPEAKER_01 17:02

Yeah. Yeah, that's always, I think my struggle is just getting them to act through accountabilities. But all right, so team owners thinking about purchasing leads. Sure. We do a lot of that, right? We spend a lot of money in that particular area. Should an agent have leads only by earning them? So it should it be um leads earned or should they just be given away to everybody?

SPEAKER_00 17:23

Well, and I know there are teams out there where like everything's it's kind of like Switzerland, right? Everyone gets a fair shake. Um, I think you have to do a little bit of both. And and as long as we've been doing this, I think our current process works pretty well. We will way over share leads with agents in the beginning. So they're gonna get a lot more leads than they probably even can handle early on for at least the first couple months, right? And then over time, we have to start letting their performance dictate how many leads they're gonna be able to receive. And so there's gonna be just an adjustment period where then eventually they will earn everything that they have to get.

SPEAKER_01 18:00

They'll eventually if they're gonna do a if we if we overload them in the beginning and they do a good job, then they're never gonna go off of leads. No. Um but if they uh don't do a good job in the beginning, then they never get a chance to really be successful. So they've really got to perform early on, right? The first couple of months, I would guess.

SPEAKER_00 18:18

I mean, they have to show some promise, right? We can't control some things, right? You know, if if buyers are purchasing but it's six months down the road, or you know, it's a new construction home that doesn't close for a while, you know, we can still take some of those factors and into how we measure them. Um, but you'll know, right? You give an agent 70 or 80 leads in two months, um, you're gonna know whether or not there's a chance that it's gonna work for them.

SPEAKER_01 18:43

Good. So keeping agents long term, what motivates them? Is it recognition? Is it money? Is it accountability, competition? What is it that keeps agents around long term?

SPEAKER_00 18:57

If it was as simple as money, you'd never lose anyone because they could keep showing up every day and earning it, right? That's a good answer. And so it's it's definitely not money, even though they probably think it is I'm gonna say it's actually recognition, and that can look very different for most. Right. So is recognition building your own brand? Is recognition just being celebrated in the sales meetings? Is recognition just being acknowledged for what you do within the company and feeling valued, right? Because maybe you're a trainer or you're a team leader, right? Recognition is why I think agents eventually move on if they don't feel like they're getting the recognition they deserve.

SPEAKER_01 19:41

You know, um Mike Ferry has always said to me or to all of us as coaching clients that recognition is the biggest motivator for a human being. And I always try to do that to my best ability. Um I'm probably better with others than I am with all. Um, but I do agree with you. Money, if money was the factor, uh, we would see a whole different set of success, right? Um, if accountability was it, they'd be clamoring for accountability. They don't they don't care about accountability. But if you recognize somebody, and we had somebody recently who was in one of our uh sales meetings and they were fairly newer uh realtor, um maybe six months or something. And I had acknowledged that person in front of the whole team about how well they were doing. And um and and I actually had heard that there was some unhappiness um with that particular realtor up to that particular point. And so, but the realtor was doing a really good job. And so um I acknowledged that realtor in front of the whole group. And the next day I saw this uh this realtor's wife um in the gym, and um he said, Man, he goes, she just loved that you did that, and she feels really grateful. And so just just saying really positive things about people, I think, um I think really changes the dynamic.

SPEAKER_00 21:07

It's tough in the sales world that we're in because you know, we don't want to be giving out participation trophies, right? Like that's not what we're in it for. So you but you have to find little ways. So, like one of the things we do every month is we have that million dollars club uh on our monthly awards presentation that we do. So anyone who sells over a million dollars in a month is gonna get their name up in lights and we're gonna acknowledge the hard work that went into it. And just today, one of our newer agents was texting me, just making sure that his closing on the 31st was recorded because it actually was supposed to originally close on the first. He's like, I just want to make sure you guys saw that it closed on the 31st, so that should put me over a million for the month. Right. And so just in that alone, you know, like, oh, because he wants to make sure that his name gets to go up on the board.

SPEAKER_01 21:54

Yeah. Um, I think I know which is fine. Yeah, yeah. No, I think I know who you're talking about. And and the thing is. What's cool is just seeing their name in lights, as we say, because we make a bigger deal about it, right? Uh is something. And so we we you and I probably have to keep learning uh things about how we can continue to keep inspiring people. And if you're watching out there, um, acknowledge your people. I I remember um and I was talking to a re uh agent who was with us and left and then came back. And that agent said to me when that agent came back, you know, I remember the time when you said this to me, and you always made me feel like no matter what I was struggling with, that I was a powerful agent and that I was and that you were super proud of the way that I was growing. And it's and sometimes I think as leaders, Kurt, you and I, um, because we're so stuck in the minutia of the business that we're in, sometimes we forget that all it just takes is patting somebody on the back and just saying, hey, listen, I'm glad you're here today, or I like what you did, or we did a lot with our ISA team. That's one of the great things about getting those reports from our daily activity from our ISA department, and in that when somebody goes out and has four or five or six or three or five or whatever it is, appointments that they've set over for an agent, and I see your emails and I'll go up to them and say, Man, that was an amazing job, right? Is it just continuing to keep inspiring your people. Um, because one of the things that we have to always understand is um we we might be organizing the army, but they're out there taking all the shots, and they're out there the ones that are having to deal with people that frustrates them at times, and they're taking the calls on Saturday evenings and Sunday mornings, and and you know, they're dealing with not just um the client upset with them about something uh that didn't go right in the transaction, um, but also the agents that are frustrated in that process. So I think it's really important that we always um continue to keep acknowledging people in that way. I think that helps build really great culture. All right, this is a fun one. So we have 10 agents, one to 10, that group training them culturally. What does that look like? And what are the different challenges between that and 11 to 25 agents? Got it. Cultural difference. And then what's the difference between 25 and 50? Sure. And 50 and 100. So how does how do we what how does the office look and how do the people feel at 10 or under 10, and then in those different set of groups of agents?

SPEAKER_00 24:17

We've definitely felt this as we've grown over the years, right? Um, when you're 10 or less, you're a family, right? Everybody knows everything about you know the kids at home and the spouses, right? You're you are such a tight-knit group that changes can be made pretty easily. Uh, communication isn't much of a challenge, and and you'll literally feel like I'll fall on the sword for that person, right? That's how it feels when you're that group. And you can do a lot of good at that level. Um, but when you get beyond that and you start getting closer to 20 or 25, what happens is you start to have like intra-group dynamics where the culture will feel just a little bit more strain at times because maybe personalities clash and people aren't, you know, as friendly to others. And so now you've got like little clicks within your group that you have to almost manage a little bit. And so that's interesting to watch happen. And then really, what I think you have to start to think about as you get beyond, like, let's say 50, right? Or even close to 50. The whole system has to be regrouped to where yes, we are here to service the agent. That's what our job is, but everything has to go into the client experience. So our buyers and our sellers, everything we do every day needs to be going in the direction to support them and make sure that their experience is the best.

SPEAKER_01 25:45

So I guess an early on, with let's say 10 or less, we can really focus on the agent to create great service, which is what we have done. Yes. And then we've seen that as we get to 25, where we have to pay more attention through systems that this that the client is taking care of. And that's harder because we're a client-based business, right? So without the clients, we have no business. So they are number one, right? Agents are number two to us because we're teaching them how to treat the agents. But as it as it expands, um, our challenge is making sure those standards to the client and those are more difficult for us, right? Yes. So now we got it, let's just say a hundred agents, right? Culturally, it's a challenge, building great culture inside of our company, holding up our company standards. Um, I know there's people who have thousands of employees and they they have um their core values and they have their mission statement and they have their their, you know, their rapport that they have within their company. Where do you see our challenge being as we scale from let's just say 50 to 100 agents? Um, we we know what 50 probably looks like. I think as many as we've had is in the high 30s at one point. So you look at this and go, okay, between 35 or 40 to 50 is probably not a big deal, but from 50 to 100, yes, is a big difference.

SPEAKER_00 27:03

Well, I I think at that point it's a branding conversation, right? How are we positioning our brand in the market? How are we making sure that the agents want to affiliate with our brand, right? What does the client see when they hear the name of the brokerage? Right? Is is is our vision clear to everybody, right? To make sure that they know what they're even aligning themselves with. You look at Apple, right? You know, why does someone go out and pay, you know, at this point, I think you're paying like $1,800 for a new iPhone, right? Well, you can buy plenty of other phones out there, but why do you buy the iPhone? Well, because there's an identity tied to that brand, right? In order to scale much past the size that we are today, the brand is actually gonna have to speak louder than what we probably have right now.

SPEAKER_01 27:53

So you you lean more on the brand and the customer. Correct. Because you can't babysit the agent like you can if there's 10 or 20. You it it's gotta be just more systematic, right? Correct. As we you and I are talking a lot about technology and AI as we continue to scale um um the business. So um, all right, let's talk about um team owners again. We're going back to team owners, team leaders. How much is the standards enforced in a team make the biggest difference? And let me just give you more contents on this. When I go on stage and I'm asked a lot about like how our systems work and our accountability measures, and people will come up to me after and they'll say, God, like how do you get your agents to do some of the things that you said, right? And now we've had probably the highest producing company in the state of Tennessee per agent production, right? Uh personal production, probably of any office in the entire state. So I base those on the standards, but a lot of teams don't have that. So what are the teams missing out on by not applying higher levels of standards to your group?

SPEAKER_00 28:55

Well, I I look at the relationship we have with the agent as really an agreement, right? And their agreement with us is that they're gonna try to follow our process, but my agreement with them is that I'm gonna follow through on what we're promising them, right? And so if I sit down in an interview and I say, I can promise you I'm gonna get you to six figures a year in income faster than anyone else can, I better follow through on that, right? And so as a team leader, you've got to be like ready to make sure that you're gonna do that for your agents. There and in order to do that, you've got to have your systems in place. So, how many leads are they gonna get? How are you gonna ask them to follow up with the leads? What's that system that you're teaching them? Are you giving them good scripts to use, right? Are you holding them accountable for the follow-up standards that you're gonna set? Right? What kind of fail-safes have you put in? Ours is called our ISA team, right? They're there to call the leads and make sure the leads are being taken care of, right? And then do you circle back around and make sure that they're showing up to their appointments, right? Getting outcomes from that. So you need to have all of those touch points from your agents in order to have any idea where you need to improve.

SPEAKER_01 30:12

So, do you think then let's go under the standards we have today? Maybe the standards we used to have, the standards we have today. Let's just hodgepodge this together for a minute because we've we have vacillated a little bit or have had this kind of rolling hill on our level of accountability. So where we are today, do we have high enough standards today, or do you think our standards are are um not high enough? So, in other words, do we have two high a standards or too low a standards today?

SPEAKER_00 30:42

They're not high enough if you want to try to keep producing the level of agent that we've produced in the past, right? So unfortunately, in order for us to try to grow the business, we're making the choice to kind of lower our daily expectation of what the agent can do, which unfortunately is gonna lead to them making less money in the long run. Right? That that's just it it's gonna happen, right? So but in order to have a team larger than let's call it 30 or 35 agents, that's what we're choosing to do as team leaders, right? Otherwise, we're just gonna have the same size team from here on, right? Which is a fine business model. It's just not what we're aiming to do. Yeah, right. We won't be able to affect as many lives. So what's gonna happen is we're gonna have to have more um checks and balances in our system to make sure that the bare minimum is happening, meaning the client is being served, and the agents will have to, through their own success, earn more opportunities. So, in order to become an agent in our company that can go out and sell 60 or 70 houses a year, it's probably gonna take a person in our company now a little bit longer to do that. Whereas five years ago, you might have been able to pull that off in year one if you showed up and worked really hard. Right.

SPEAKER_01 32:00

Well, yeah, I mean, we saw agents doing 30, 40 deals in year one where our standards were so high, um, but our retention was low. Correct. And so it's interesting, and I'll give you guys some contents on this is we had high standards and we had very high per person productivity. Um, but the challenge that we had is they didn't want to be held accountable for so long. So we were looking at them going, hey, you want to make 100,000, you got to really make 250 or 300 to be in our group. Well, we were losing probably some pretty good people because of those standards that we acquired. We felt like we were still doing the right thing. And I'm not saying that wasn't the right thing. And if you're a team owner today, don't give up on that idea. But it's really not scalable. And that's the challenge with it is if you want to go out and have a hundred or two hundred agents, you just don't find that many agents that want to produce. So you're almost kind of meeting the mental desire of the realtor. We we were looking for like what we call it the Navy SEALs of real estate. We were looking for the ones that really wanted to go out and make a big impact in the real estate business. But the challenge is we had a hard time finding that.

SPEAKER_00 33:04

Well, and I even find it in the interview process. So you ask an agent who's coming on board, how much money do you want to earn? And I mean, first of all, most of them can't even really spit out an actual number. They'll use a very generic term like I want to earn six figures, right? So now I have to then go back in and ask for some clarity there. Is that $100,000 a year or is that $900,000 a year? And I'll ask them that exact question. And normally they'll kind of say, Oh, gosh, I didn't know $900 would be possible. It certainly is, right? It certainly is if it's still six figures important to you. Yes. And so um, that's the challenge. That's a good question, by the way. Yeah, I love that. I talk about some clarity. Well, and and that's where you really see how how small we think.

SPEAKER_01 33:49

Yeah.

SPEAKER_00 33:50

Right? That's how small we think is people think that a hundred grand is enough. If you've been out and about in Nashville lately, um, a hundred grand feels like minimum wage to me. Yeah.

SPEAKER_01 34:02

Yeah. You know, that's that's so much fun. You know, years ago, before I ever got into real estate, let's go back 24, 23, five years ago, something like that, I was in franchise sales. And so there's only so many things that I could say in the franchise world based on um the laws that I was allowed to give information to, especially if it was if it was a potential client. So um I would always ask them then. I said, you know, if let's just assume you invested a couple hundred thousand, two hundred, two hundred and fifty thousand to go into a franchise, pay the franchise fee, do the build out, all of these things. Um, how much would you expect to make in one year? And you know what's fun? The answer always was, well, at least a hundred thousand. I'm sorry, at least six figures. At least six figures. I want to make at least six figures. So 20, let's call it 24, 25 years ago, it was still the same response, which I think is funny. Not not thinking how much inflation and how much incomes have grown in the last 25 years, but it's the the response is still the same. So why do you think that that's the response?

SPEAKER_00 34:58

I was just gonna try to add on to it. And here's here's where I think it really comes down to it is we're gonna go back to the accountability part of this thing. If you say a term that's generic, like six figures, as long as you land somewhere in that realm, you're actually hitting your goal, right? But if someone were to tell me, well, I'd like to make $300,000, right? That's very specific. Right. And I'm gonna know for sure whether or not $300,000 was actually important to them at the end of the year, because they'll either be there or they won't be.

SPEAKER_01 35:29

Yeah.

SPEAKER_00 35:29

Does this make sense?

SPEAKER_01 35:30

Yeah. Well, yeah, because if they're specific about $300,000, then they're probably income is used to that. They probably came from a job potentially where they need that kind of money. And by I love those people, those that actually have a lifestyle that may need $300,000 to live, those are the ones that are gonna do it all day because you're they're only gonna rise to their level of their life, right? If you're if you're if you're used to I I had a uh um a sales uh agent, um real estate agent um years ago, where um I had this particular individual that I'm talking about right now, and then uh an agent on our team that's been with us now for 15 years, and they were um uh he was my first agent, and then there was another agent that came in right after him. And this one agent is out selling 70, 80 homes a year, and this other agent who was splitting the other half of those leads, um, and and the agent that was selling 70, 80 homes a year is making several hundred thousand, and the other one is making about 75,000. Same leads, just split in half. Sure. And so I would sit down and and I so I finally asked the agent, I said, Let me ask you in the past job that you had, um, how much money did you earn in that job? And and he goes, Oh, well, I was earning about 65,000 a year. And I'm like, Okay. I said, so if you earning 75,000, that really meets all of your financial needs based on the last career you had. And he says, Yeah, yeah, no, I'm I'm I'm really happy, right? And so I then made a decision, and I don't know if you know this, but then I made a decision to hire uh the third agent who is still here, and uh and so I said, Okay, um I'm gonna take this individual who's earning less than should on the half leads, and I'm gonna add another agent into that lead flow. Sure. And that agent sold 40 homes with the other half of the half of those leads flows.

SPEAKER_00 37:25

They were taking a quarter of the leads.

SPEAKER_01 37:26

They were taking a quarter of the leads, selling like 40 houses and making several. So I started realizing it's like this is where the agent has an income that they're used to. And when that income is met, which is why my mentor, Mike Ferry, always says, raise your level of living standard. Dream about big houses and dream about nice cars, because if not, then whatever you have is okay, and then that level of income is okay. But if you go out and buy a little nicer car or a little nicer house, then you raise the standard of what you absolutely need. I I I remember back when I was in real estate and I bought a new home and and and Mike Ferry, my mentor, said, you know, why don't you buy this home? And and I wish what's just a home I really wanted. And um, and I'm like, yeah, you know, I mean, that's important to me, I guess, but I'm a little, you know, basically I was a little nervous about it because it was a little more expensive than I wanted. Anyways, make a long story short, I ended up um purchasing that property. But and then my income doubled. And that's when I started understanding you raise the level of your lifestyle, your income has to follow, which means you have to get out of your comfort zone to practice the scripts and dialogues. You have to get a little bit better because you have to close a little harder because now I had a much bigger mortgage payment, right? And then I went and bought nicer things, nicer cars, nicer clothes. And then you have to keep raising your level of standard. And when you raise your level of standard, it forces you to change who you are. So you really are your income in the real estate business is nothing more than a product of what you need to have to survive. Or what you think is possible. Or what you think is possible. Well, I loved your response because you said, well, six figures, is that 100,000 or 900,000? That what a great and and their attitude probably is, well, I didn't know that was possible.

SPEAKER_00 39:07

It catches every single one of them off guard and they always have to like collect their thoughts. It's that's it's really fun to watch. That's awesome.

SPEAKER_01 39:14

Okay, so now we're talking to team owners. What are team owners right now? What do you think they're focused on in their business that they shouldn't be focused on? Now, again, most of them are smaller team owners, let's just say three, four, five, eight, ten, twelve agents, um, and they're looking at things differently. We used to probably look at things like that too, right? So I'm not knocking anybody that's doing that, but what is it you think they're focusing on at that level that they shouldn't be paying attention to?

SPEAKER_00 39:41

I used to get really hung up early on on the individual agents I would meet that I was trying to bring into the company, and I'd really like I'd like certain people, right? And I'd think that if I could just get them over here, that it was gonna help our team. And so you you almost feel like the people were a very important part of the process, right? Um, which they are. I mean, we still want great people, but where I think you have to start to realize the difference is made is in the process that you're gonna build, right? You've got to build your system to support the people, and then in that you can make people more successful through the leverage. I think I think that's where some team owners are gonna just get it a little bit backwards, is they're gonna want to find the person first. No, no, no, no, you've got to build the system first.

SPEAKER_01 40:28

I was being uh and had still and been coached down with Mike Ferry for over 10 years personally, and so I remember um talking with him in the early days, and you had just joined us, and our company was growing, and um, and I would have to send Mike Ferry every single month my PL and then my breakdown, and he would discuss me all my challenges that I was dealing with. And he says, you know, he kept saying to me, he goes, Well, have you are you're making the decision at some point to leave personal sales and just build the the team? And I remember I kept saying to him over and over, he'd asked me that several different times, and I would say, you know, Mike, I don't really trust anybody but me. And I don't want to put any of the pressure of my family's financial picture on other people. And so as long as I'm selling, I'm in control of whatever I'm doing. And one day, Kurt, he said something that um was like, Whoa, this this is so powerful. And if you're a team owner, um, I hope it resonates with you. But he goes, you know, Bernie, he says, what you're doing is he says, you're you're putting your your thoughts and your concerns on the behavior of other people. And I said, Absolutely. And he says, we're human beings, and so we all have lives and we're flawed. We're gonna not, I mean, the leads you provide are not always gonna be their priority. Their family is gonna be their priority, and and their kids are gonna be their priority, and and and that's acceptable. And you should and I said, No, I get it, but I'm I'm not feeling comfortable uh investing fully into them and then leaving what I'm doing to earn an income. And here were the words that came out of his mouth. He says, remember this. He says, it's not that you can't trust that your system's gonna be fully fulfilled by your people because they're human beings, but what you can trust is a system. And you systems will never fail you. And if you build a system to support the company, you'll always win in this game. And that's when I started going, okay, what does this mean? And so we started dealing, talking about the ISA team. That's how the whole ISA team came about is because we were, I think, at that time frustrated, pulling our hair out, or are they calling the leads? Are they having the right conversations, whatever? And then you and I started stacking up the system. And I think that maybe even smaller uh uh team leaders, um, if you just build a system around what you're trying to accomplish, the systems will thrive at such a level. And that's all we've done, right? We just keep adding systems to our to our business, right?

SPEAKER_00 42:56

Anything to add to that? And I think that the the agents um they don't even understand what they don't understand, especially when they get into this business. So um for them it's just a sandbox, right? And if you give them the process to follow, most of them are gonna follow it confidently, and then you have really great success with those people.

SPEAKER_01 43:15

Yeah, yeah. Yeah, and I I would say that's probably one of the best advices that I heard, and I think it's probably been one of our great successes we've had in our company is the systems accountability measures uh that we had. Why do agents leave? So not only why do they leave, why do they tell us they leave? Oh, and then what are their real reasons why they leave? Like so they have a conversation with us, so why do they leave? What do they tell us the reason they leave, and then what is it they really leave for?

SPEAKER_00 43:43

Yeah, so I'm gonna start with why they really leave. Because I think that getting clarity on that has taken me a while, but I think I'm I'm pretty clear on it. Um, they leave because we change more than they want us to. Okay. Our need. To change is being driven by the market, by competition, by everything else that's going on around us, right? So as a company, we're constantly having to evolve, right? And so that's why we make changes in our program. Right. The agent leaves because they mentally at some point get they get disenchanted with the fact that the business is changing, right? But that's everywhere.

SPEAKER_02 44:26

Yeah.

SPEAKER_00 44:26

Right. So that's why they leave. Now what they tell us normally is they're going to tell us that it's they want to build their own business, right? And that way they can go, you know, um, start marketing themselves and in in in creating something that's going to last or whatever their story is, right? Um, that's what they tell us they want to do.

SPEAKER_01 44:48

And that's and that's fine. I think you know, we've always said we're either a stepping stone or a career, and we'll accept you either way. And if you're here for two years or three years or five years, um, we're gonna be a big cheerleader for you when you walk out. And if uh what it allows us to do too, is because we spend so much time with them, is how do we continue to keep building support and systems around them um, you know, so they stay. Yes.

SPEAKER_00 45:10

Right?

SPEAKER_01 45:10

That's that's our that's our goal. But no matter what great systems you have, people are gonna wanna are gonna want to move on. So so what's more important? A great system or great people? You can only have one. Um, I mean, I'll let's answer it any way we want to have it. I mean, I I think I think it's just your it's your answer.

SPEAKER_00 45:29

Um I I I still think it has to be the systems because a really great system will support great people and it'll support subpar people. Yeah, right. Yeah, but if the system is good enough, it will make your great people even better, right? And so it actually does that job for you.

SPEAKER_01 45:48

I love that. And I think the systems are the key, but you can't do it without great people. And I your answer was perfect in that you have a really great system and it supports really great people, and really great people want to work in a really great system. Yes. I think you have to have both, but I think that you could have really great people and crappy systems and they're gonna walk out the door.

SPEAKER_00 46:07

So if you're gonna what what comes there's no predictability in that world.

SPEAKER_01 46:11

Yeah, what comes first, the chicken or the egg? And I would say this you build the system first, and great people will want to stay. Yes. And if you do it the other way around, you're probably not going to get a distinct.

SPEAKER_00 46:24

Because life happens, right? And we've all heard the stories where you know your key people, someone's got a really great person, and then life happens, right? And whether or not that person's still around, it leaves a gaping hole in that business, right? Whereas we are trying to build a business that no matter what, every day it's going to function. Whether 10 agents show up, 20 agents show up, 50 agents show up, five agents show up to work today, it's still gonna function.

SPEAKER_01 46:54

Yeah, I love that. Um so what's the hardest part about running a team that most people don't understand?

SPEAKER_00 47:02

From the team lead perspective. Correct. Yeah. Okay.

SPEAKER_01 47:06

Um or yes, let's go there, but anything else you want to add to that question too, because that's that's a pretty loaded one.

SPEAKER_00 47:12

Well, yeah, and there's probably a lot of hard things. And and what I'm gonna say is just managing the enormity of all the steps in the process that you have to manage as a team leader because you've got people involved at every intersection, right? It's the title company, it's your lender, it's the administrative staff, it's the person who answers the phone at the front desk, it's your inside sales team, it's your agents, right? You've got to manage everything that that links those people together, right? That's what's hard is the enormity of it, right? Because there's always something somewhere that's creating challenges for you. You don't ever show up to work on any given day and have nothing to solve.

SPEAKER_01 48:02

Has there been times in here that you think we've overcomplicated it?

SPEAKER_00 48:06

We did when we were trying to figure out the system. We certainly overcomplicated it, right? And and that's where I think right now that's the biggest technology opportunity for AI to help us with is how can we take the steps that we know are needed, but make the lift lighter for our people. Right. Like so, for example, a lot of old school agents who are still working with archaic technology nowadays may be sending their clients' properties straight through the MLS, right? In fact, I just had this debate with one of our agents this week who was still utilizing that tool. When we've got a really great tool in Y Lopo that will automatically set people up on these searches and it's dynamic and it will notify you when they're looking at properties and it will make sure that you know it's like the umbilical cord to your client. And you know, so you sit there and you kind of scratch your head a little bit and you're like, why would you be using this tool over here when we've given you the perfect tool that almost does your job for you? So as you're building out these systems in your infrastructure, technology is the only way to really make it easier.

SPEAKER_01 49:22

You know, that's that is such an interesting part, and it brings up a different part of that question, and that is as team owners, because of the of um the time we spend learning things and all the systems, things like that, um, and our financial contribution into building systems, I think team owners probably should understand that we're building a service where the regular agents aren't going to be able to afford to scale at so we spend lots of money in support systems and software that make it easier for the agent that the outside agent would probably never have, right? So is that sort of where the comp computer is. I've run the numbers on this, Bernie.

SPEAKER_00 50:02

And if if you, as an independent agent at any brokerage in town, wanted to go out and purchase every piece of technology that we use, it would be like $2,400 a month for an individual agent to turn every piece of technology on that our agents get for free. Wow, $2,400 a month that the agent would have to pay. The agent would have to pay that out of pocket. And so, you know, there they are, $28,000, $30,000 in the hole just to run with the same tools that we're giving them for free every day.

SPEAKER_01 50:34

Yeah. And some of them, because they don't have lead generation opportunities, some of those systems they would probably never have, but they probably should have because they need lead generation. And what they don't understand is some of these systems you're talking about are um touch systems and text systems and email systems and communication systems that take people from um the the rafts of uh underneath the ground and pulls them up when something interesting happens and it does it automatically for them. So the client kind of raises their hand.

SPEAKER_00 51:02

They might have not spoken to that agent for months and months. Bernie, I'm not even including the marketing that goes into that. I'm just including the systems themselves.

SPEAKER_01 51:13

All right, so let's just say we start it over.

SPEAKER_00 51:15

Okay.

SPEAKER_01 51:16

We're at zero. Helping those people that are going, hey, I think I want to build a team. This sounds really interesting. I think being okay, we're start at start at zero. What would we do different?

SPEAKER_00 51:26

Knowing what I know now about the fact that the formula of having your agents come into the office regularly was really a formula that we got stuck on for a long time. You and I both believed that it was like our secret sauce, right? Knowing what I know now, I would say starting over from zero, I would just skip that step and we can go straight into just finding really great people that are able to make it work from home, right? And then figure out how to scale it a little bit quicker that way. Because I know that that was some of our attrition over the years too. And sometimes agents didn't even want to talk to us because it's like, well, why would I drive all the way to your office if I can just work from home? Yet what they don't realize is how much money they're leaving on the table and surrounding themselves with top producing agents every day. So there was a tug that we felt like we were on the right side of it. But if we had to start over again from zero, I would just skip that step.

SPEAKER_01 52:24

I I am on the same, I'm on the same agreement in that I would have done that this sooner that we're doing now. Um and the sad part though about us doing it this way, and this is the sad part, is it really doesn't put the agent in the best position to succeed. But it doesn't matter what we know, it only matters where we meet them. And our challenge in in um connecting with realtors was hey, do you want to go out and earn three to five hundred thousand a year? I can show you how to do it. And they all said yes until they realized that wait a minute, I got to change who I am in order to get there, right? Yes. Um, so uh what I love about us is is unfortunately we could have 50 agents and and and sell a bunch of houses. Now we got to have hundreds of them to sell the same amount of homes because you got to dilute it all down. And it's what's fun when we guys, when we announced this to our group and said, listen, you guys can just go work from home, go do your own thing. Of course, we don't really see them anymore. But their production also starts to change. And you're you can just see their production starts to change because there's no real level of accountability other than making sure that they're following the leads um and they're having that conversion percentage. But the training, the coaching, the role-playing, and all the things that we've promoted for years, you're seeing all that starting to dissipate, which means that you have a less educated um sales process agent today. You have a agent who makes less money. Now they're happier because they can go do what they want to do, um, but they're certainly not as effective, right?

SPEAKER_00 53:50

Not even close.

SPEAKER_01 53:51

Yeah. So um, if you were, let's say today, we were gonna give advice to three things for a team owner to do first. What would the first three things be?

SPEAKER_00 54:04

Number one, you've gotta get a really great CRM, right? Because until you have somewhere to manage all the leads, right, you're gonna have a really hard time keeping tabs on what's happening, right? So that's number one. Um number two, you're gonna need to find some sort of a key support person to help you, right? Because most of the team owners I've met, they're either still in production at some level or they have no interest in being in production, but they also probably aren't gonna be the ones recruiting and training and everything else, right? There's there's always a different dynamic there. So you're gonna need to go hire one really dynamic recruiter, trainer, team leader, whatever that is. You've got to find a person, right? And and you and that person are gonna have to be like connected at the hip for a while, right? And then number three, you are gonna have to invest.

unknown 55:00

Yeah.

SPEAKER_00 55:00

Right.

SPEAKER_01 55:01

And and so because that's hard for people to think about laying out cash and how much cash do I have to lay out in order to get this team off the ground.

SPEAKER_00 55:08

Well, and you've got a lot of teams that are popping up right now that are able to pull this off fairly affordably, right? Because I I hear it in the recruitment conversations I have based on the systems they're using and where the leads are coming from. And I know a little bit about how like the op cities of the world work and you know how being on Zillow preferred works, right? It's totally free for these team owners, but it's gonna be short-lived unless they've got the systems behind it to make it work.

SPEAKER_01 55:39

Yeah, I actually really loved the fact that we invested all that money in lead distribution. Um, I'm, you know, I now what's happening is it's giving other teams opportunities, which is which is fine. What I love about that, if I can be frank about it, is other teams getting opportunities for lead distribution is it just makes us think bigger and better out of the box. So leads are certainly part of the equation. But all the growth systems, in addition to all of those types of things, a lot of these teams don't have to worry about because they're like, well, if I get Zillow or Op City leads or whatever it might be, um, then then I have leads. Um, as you know, just because you have leads, you don't retain agents. And that's that's that's that's the part I think that people need to understand is leads are certainly a great building foundation off team ownership and team scaling. Um but they still leave. And if you don't have good culture and you don't have really good systems to support those people outside of those lead distribution, outside of that lead distribution, um, then you still have a lot of the same similar problems that um that we have. And this has been fun. I I what we should probably do is probably sit down and do this maybe once or or or twice a month where we're just talking about our struggles. I think more I found more value, value, Kurt, in that people who are watching these things go, hey man, this is just real, and he's talking about his problems. And I do this a lot on my podcast where I'll just say, This is where my struggle was here. And I had learned this the hard way, right? And I think there's a lot of team owners out there right now that probably could find so much value in what we just talked about over the last hour, and really kind of two hours since we did the first hour without recording it. But um I want to thank you. Thank you, A, for being a great partner and and and associate with me. And um, and we're just in this fight constantly, and um and we're gonna win it, man. No matter who we're we're in the 15th round and we're we're taking a licking.

SPEAKER_00 57:30

But well, and I think there's a lot of really great agents out there that that value this type of opportunity, right? So if you're starting something as a team owner, um, just know that you will find your people. You will, you just have to keep trying.

SPEAKER_01 57:45

Yeah, you have to keep trying. You can never give up and don't and always continue just to keep working different angles because it may not work the first time, may not work the. I mean, how many times have you and I tried things? And you know, it it may have had some success and we learned some things off it, but we scrubbed it and moved to different things. And and um, and and and it might be the case with what we're working on right now. But I my my my vision today is different than even it was last year, and that I believe with the foundations that we're building, the systems that we have, and hiring really great quality people, like really great smart people that come in and help us scale it. There's really not anything we can't we can't do. So thank you. Thank you for everything. Appreciate it for all of you guys. Thank you so much for everything that you do for watching. Please hit the like button. Please hit the like button, please hit the subscribe button. If you have any comments, we'd love to hear from you. Kurt and I'll answer any questions you guys have on team building. We'd love to hear from you. Thank everybody. Everybody have an awesome day today. Take care.