Top 5 Ways to Kill a Real Estate Team with Mark Johnson

Yeah, yeah. So, excited to have you here. So, we're going to take a little bit different spin on the topic of teams today. So, we have, in past episodes, talked about the things, the systems and processes you need to set up a team, the reasons why you set up a team. But today, we're going to flip it around and talk about the things not to do when you have a team. So, we're going to talk about the Top 5 things that kill teams, right? Yeah. So, let's get into it. I mean, some of your audience, you know, maybe they've already started a team, and they're now questioning that choice. Maybe they already have a high-performing team, but they want to take it to the next level. And maybe they're just thinking about starting one. And so, we know, Chance, that there's a couple things where teams go wrong.

First, starting a team too early. Second, starting a team for the wrong reasons. Starting a team without a straightforward, compelling value offering. Starting a team with no or poorly written agreements. And finally, letting your team and your own performance get stagnant. Now, the most successful teams we know, like yourself, run the firm like a CEO. And so, I'm sure you and the audience can relate to each and every one of those. Maybe we could dig into those and do a little bit more detail. Absolutely. So, let's talk about the starting too early, because I think that this is one of those questions where I think on one hand, you get it's fashionable to have a team, right?

And so, everybody who comes in and sees this team doing this or that team doing that, and they want to be a team. When, in my opinion, more often than not, what they really need to do is be working on processes and systems so that they can have a team later. And maybe start with a transaction coordinator. Start with an assistant. Something like that, right? Exactly. You know, Chance, one of my favorite quotes, and you and I talked about this when you were just beginning, is a system will produce what a system will produce. Nothing less, nothing more. And so, many of us, when we're starting, we have these dreams. It's like building the house, but not having the right foundation. Right. And if you don't have that right foundation, you and I know in our business, that house crumbles, right?

That's exactly right. So, if you're listening and you're on the audience and you're not doing your personal routines of success, you're not in a growth mindset. You aren't generating more leads than you can handle yourself. If those fundamental things aren't in place, and like Chance Mission, working systems with the transaction coordinator, having those things in place, you're not ready. You're simply not ready. And if you're not ready, how are you going to lead someone else into it? Right. And what you end up seeing, you know, is this turnstile of people. Exactly. Too early, right? And so, you know, you're almost setting people up for failure. And burnout and all those kind of things.

Now, Chance, the other thing I see that many folks forget is a clear value proposition. And as you and I know, you can either be a lead provider or you can be a coach. Or maybe you're a hybrid. But so many folks come to me and say, I want to start a team. And I'll say, why? And they say, well, because I want to earn money off of other agents. That's the wrong reason to start a team, right? Right. So, we talk about starting one for the wrong reasons. It usually has to do with dollars and cents. Yeah. But if they come to me and say, hey, I want to make a difference in people's lives. I want to help people who are struggling and show them a path to success. I have a way to generate leads and I can provide those for them. Or I have a passion for coaching and training and could be a successful mentor.

Now, we're starting to start a clear value proposition that I have one of my teams here in the DFW area. She has 10 team members and hasn't had turnover in five years. That's incredible. Now, that means she has what? She's providing more value than they're investing and they're staying with her. Right. Value to the agent and value to the consumer. Yeah, exactly. Right. That's fantastic. Yeah. You don't see that a whole lot in teams. So, that's great. So, we've got – you started too early. You've started for the wrong reason. We're touching now on the value proposition. So, for the successful agents that are starting a team, the value prop really isn't money up front.

Right? Sure, there's an element of that. Yes. But it's usually because they've either exhausted the resource that is them, right? There's only so many hours in a day. There's only so much that they can do on their own and the business is starting to outgrow them. And so, they've got to scale. Right. A lot of it has to do with there is an element of when you get as busy as one person can be, there's some burnout, right? And so, you need to – you need help. Yeah. You start burning out. There's cracks in your service delivery because you're trying to do too much at one time. You're trying to be Superman or Superwoman. And so, those are some indicators that it's my time to start a team is you have more leads than you can handle.

You're working 24-7 and you're starting to burn out. These are all indications, you know, particularly if you have more leads than you can handle, that you need to look at the business in a different way. Otherwise, Chance, I was just looking, if there were 100 Realtors who joined NAR five years ago, today there would only be 40 remaining. I believe that, for sure. And that's primarily because of burnout and not being able to scale their business in a way where they can have a business and a life. Well, and I mean, that's what happened to me. So, I hire Mark as my coach. Mark makes me super successful. We do a ton of business one year. And at the end of that year, I legitimately – I go away with my wife for a weekend thinking, hey, I'm going to present to her what my plan is for this year.

I had set a goal to close 100 transactions. We closed 96. So, I was, you know, on one hand, super excited that we closed 96. But on the other hand, like, damn it, couldn't we have done four more? And my goal was I was going to set a goal for 150 the following year. And we got away for that weekend. And my wife was like, no, no, you're not. Yeah. Because, you know, you're burning yourself out. I was being super unhealthy. I was smoking a bunch. I was eating whatever came in a bag. So, I was always in my truck driving around. And so, it was exactly what you just said, which was we had to take a different perspective on what we wanted the business to look like. I wanted to be a better dad. I wanted to be around more. I wanted to be a better husband. And instead of doing paperwork all night, I'd actually be able to take my wife out on a date. And so, you know, that was where we had to shift what our business looked like from it being sole practitioners to starting to build support services and team elements around us.

And that eventually led to opening a brokerage. Yeah. Because at the end of the day, if you have all the success and all this money, but your family is gone, what good is it, right? Exactly. Now, Chance, I think the other thing I'd like to mention is if you're listening in and you are running a team, I'd like to ask, why do you and your team do what you do? Now, this may sound like an odd question, but, you know, are you in the real estate business or are you in the problem-solving business, right? Do you help consumers navigate the complex process of buying, selling, and investing in real estate with ease? Or do you just sell real estate? I mean, there's a difference, right? Absolutely. Yeah.

We call it, in our brokerage, we call it do four, not two. Oh, got it. One of them is you're providing a service. The other is you're just doing a transaction. You don't care. And I think that's ultimately, at the end of the day, is it's an element of caring. Yeah, for sure. And the other thing I'd like your audience to consider is, Chance, I know you do this. You have them do business plans and strategies and goals. And with all those business practices and the culture that you have, and we all have, that make up your teams, you know, we are all getting exactly the result that our business systems and process are currently capable of producing. Nothing less, nothing more, right? Right. If we want to get a better result, we must improve and design and execute on a better business system at the detail level, at the checklist level.

The law of cause and effect governs all business outcomes. So to change the effect or the result, we got to go back and change and fix the cause, right? That's right. Yeah. That's right. You've got to take those processes and systems. And as your business scales, you've got to scale the process and system too, right? You can't keep doing the same thing you did when you were a sole practitioner when you've got three, four, or five people on a team. Right. And some of us just aren't equipped to do that. And that's where you come in, like the assistant or the transaction coordinator who has those skills to help you put the checklist, the processes in place. Because like you and I, we're more natural salespeople and out there doing things. Checklists don't come naturally to us. But when we hire someone who can shore up, I don't want to call it a weakness, but shore up that strength that we don't have, now we have a synergy and then exponential growth as possible.

Complementary skills, right? Yes, totally. Complementary skills. Yeah, it's true though. You see it all the time. I use my Realtor before I was a Realtor. I use them as examples all the time. And they're great real estate agents. They're great business people, but it's a husband and wife and they're night and day in the way that they operate. Bob, on one hand, is very analytical, very systems driven. He came out of the IT industry. Leslie, on the other hand, is let's go have some fun and party and be that person. But together, I mean, they're an unstoppable force. Well, and that's one of the other reasons teams fail is that the team leader hires people just like them. See, if I went out and hired, like you and I, we're complimentary in terms of our extroversion and our ability to recruit and talk to people.

And that's great. But we wouldn't have that complimentary operations versus front end and back end of the house. We need to hire someone for us that can run the back end of the house. Because in my case, while I have strengths in that area, it's not a towering strength. And when you put those two together, now you have this powerhouse. But if I went out and hired a bunch of people like me, it would be, well, there'd be lots of great ideas, but nothing would ever get done, right? Nothing would ever get done, and we'd be coming up with all kinds of stuff. It would be like a chance. I didn't know this, but I happened to stop in Killeen, Texas yesterday. And the hotel I checked in, the Texas Clown Association was having their annual convention.

And the lobby was full of clowns. And I said, whoa, wait a minute. You walk in and you're like, hey, wait a second. I'm dreaming, right? I'm dreaming here. This is like a, what is that? I didn't know there was a Texas Clown Association. In the first place. I didn't either. I didn't even know. They need a trade association, apparently, for something. I wonder what the breakout sessions were like. How to fit your shoes. If anybody listening, what we're talking about right now is really resonating. Because a lot of real estate agents are the way that you and I are, Mark. I mean, we are typically, as a group, long on ideas and short on execution. We are the type of people that have a to-do list with 80 things on it that are all 28% done.

And we'll stay that way for a year until we actually need it. And then we'll do it last minute, right? So if you're listening, and this part of the conversation is resonating, there's a great book by Gino Wickman called Rocket Fuel. I highly recommend you read it. And it kind of talks about exactly what we're talking about and how to find that person who is your complement. Yeah, sure. Now, I recently wrote a book called Up in Your Business. It's available on Amazon if you want to check it out. Up in Your Business, The Art of Productivity. And one of the things that I researched and did in that was agent behaviors that make a financial difference. And Chance, maybe we can talk about that a little bit because it does relate to the teams.

And one of those is having a coach. Yep. You know, a lot of people come to me and say, well, what's the value of coaching? Well, I actually quantified it. I did a survey of agents in coaching and outside of coaching. And guess what? Agents in some time of formal coaching program earn nearly 50% more than those not in a program. I believe it. Chance, you know, it surprised me even more. And the coaches don't want me to tell this because this is the hidden secret. This was a shocker for me. Agents who were in a small group of three to four agents, three to four to five that met weekly in an accountability group, they made 42% more, almost as much as having a one-on-one coach.

So being in a small group can be almost as powerful as having your one-on-one coach. That's incredible. Yeah. Isn't that something? Does that surprise you? On some extent, yes. But at the base level, it makes perfectly good sense, right? Again, going back to the personality types that tend to be attracted to what we do, they aren't the most accountable human beings in the world. So when you have an accountability partner, when you have a gym buddy, when you have, you know, somebody's going to hold your feet to the fire a little bit for whom you have to perform to, it makes sense for sure. Yeah, for sure. And then this one goes back to what you were talking about. Maybe the right next step for you to start the foundation of a team is to hire a personal assistant.

Now, agents who work with a personal assistant in our survey earned nearly 92% more than those who don't have a personal assistant. So that first step of success to avoid failure in a team is to have that assistant to help you put those system structures and processes in place. Right. Because once again, going back to the personality types that are attracted, we're not good accountants. We're not good at this or that or whatever. And so having somebody to do that, that just takes that time off your plate that you can go and do the things that you need to make more money. The stuff that you've got in the business to do anyway. Yeah, for sure. I am of the opinion, and I say this all the time, I don't find any valor or any honor in tackling something that I'm terrible at and like winning that challenge.

I would rather just pay somebody else to do it for me. Yeah. I mean, you know, so many of us want to save a buck. I know. And I was just talking to someone the other day, and they were doing this work that they had no business doing. Yeah. They were trying to save $100. And in fact, if they had invested the $100, they probably could have made $1,000, right? Right. Exactly. I mean, I was that when I first started, when you and I were first starting coaching talk, I didn't have a CRM because I didn't want to pay $45 a month. I wasn't using our showing service, so I was answering my phone 500 times a day because I didn't want to pay $55 a month. So, I mean, I get it. And the line that you used with me that I still use today when we're talking is being able to make the move from sweat equity to check equity.

Yes. And it's a nice position to be in, and I understand that there's a lot of people who are just starting in the industry who aren't in that position yet. But, you know, one of the things you have to do, and I interviewed Chris Smith about a week and a half ago, and I was talking to him about, you know, when I was first starting out, I stole all of his shit and just put it to myself, right? Be smart about the people that you associate with and listen to what they have to say. And if they're telling you, put a group of three or four together and you're going to make more money or get an assistant and you're going to make more money, do it. Well, and Chance, the beauty of today with technology, you know, some of these things we need to be more efficient right now are so cheap. Yes. Now, I know $40 a month may sound like a lot, but, you know, some of the CRMs, a referral maker and other things like that, but are so powerful, you're almost crazy not to have that minor investment to build your business.

I agree. I mean, I remember when I came home and told my wife that I had hired you. She was like, are you kidding me? And so, and then, you know, within 90 days and it paid for itself for the whole year. And I was like, this is why. She's like, okay, that makes sense. So, all right. So, I want to get into, we've talked so far about starting too early. We've started, talked about doing things for the wrong reason. We've talked about making sure that we have a clear value proposition. You brought up one that I see all the time in especially new teams. It usually takes getting burned once or twice before you figure this piece of the puzzle out. But hopefully we can help some people out. Not having good agreements.

Yes. We just spent, we have a team leader panel that we do each month with all of our senior team leaders. And they share, you know, best practices and struggles. And we get real with each other. It's not just fluff, right? Right. One of them we had basically share a team member had left. And the agreement was very poor and he described what that was like. And it was painful for both of them. And what was, what could have been an amiable relationship post breaking up became very antagonistic. And it didn't have to be that way if the agreement was clear. Right. Yeah.

And so, you know, so many of us, we enter into relationships thinking everything's going to be perfect. This is going to be the greatest thing and everything's, nothing's ever going to go wrong. And so we, sometimes we enter into these things and we don't even do an agreement. Or if we do an agreement, it's not very well thought through. And we have team agreements all over the industry. It's not, there's, there's no shortage of content. You just have to make the effort to reach out and get some of these sample agreements. Yeah. So would you recommend that that's just a reach out to other team leaders inside the brokerage? Is that a reach out, you know, in a Facebook group? Is that a hire an attorney? What are your thoughts on that? Yeah, I think all of those are great. The one thing with an attorney, because they don't necessarily know our industry.

If you do hire an attorney, that's great. Many of ours have, but then what they do is they share it with other team leaders who have experience that they know, like, and trust, and they get another set of eyes on. Gotcha. And what our team leaders have done is openly shared their agreements. So we put them inside a Dropbox, basically, and other team leaders can, you know, look at yours and look at the other person's and, and compare and contrast. And that's been super, super helpful. Okay. Very good. So let's talk about the types. I mean, we need a hiring roles and responsibilities. We need, you know, just like you're an HR department, right? Well, yeah.

So a lot of it depends on first, you have to decide what type of team are you going to be? Are you going to be a lead provider? And is your value proposition generating and providing leads? Or are you going to be a coach and a trainer and mentor? Both of those models can be work and very effective, but the structure you may have could be very different and even more, are you going to have a buyer's agents or not? I have a, I call her a team, even though she has no agents, all of her team members are administrative people, marketing, transaction coordination. Uh, and, and she's decided that her strength is not managing and leading agents and she wants to have more control. And so her team is very centralized with employees, um, that allows her to basically do everything customer facing.

And she does nothing after that, the team handles all that for her. Gotcha. Okay. So it's the first you got to decide who do you want to be when you grow up and then your structure will be unique to that, uh, type. Cause I mean, when we see, when we see trouble with themes, when it comes to agreements, it's always when there's a problem, it's, you know, it's usually separation it's or termination. And that's when the problems come up and it's never, Oh, Hey, I want to hire you, but here's my disagreement. And everybody's like, no, I'm not going to do that. Um, it's, I don't know if you remember this call, one of my, one of my quotes is it's not a problem. Tell us a problem. That's right. It's not a problem. Louise, I mean, yeah. But then once it's a problem, um, you know, I, I deal unfortunately with more team disputes than I care to that are all easily solved with the right agreement.

If you just have a little proactive forethought in your agreement and make your expectations clear, um, uh, it's just not that difficult, but we're moving. We want to get everything done and we're excited because we finally found someone who we think is a match. And then, you know, two years later, uh, it's a problem when it's a problem, right? And you learn the hard way. And then once you've learned it the hard way, uh, hopefully you can recover and then you grow and get better. We can short circuit that for you just with this conversation right here. Yeah. I mean, to me, if it, if they fit your team core values and you've got a solid agreement in place, that's going to probably put out 90% of the fires. Absolutely. Yeah. All right. So then last on, on our list, and this is a, this is a good one because it's not just for teams, but any agent really is letting your business get stagnant.

Yeah, for sure. And it's so easy for us to get complacent, right? It is. Um, especially when times are good, like, you know, this recording right now, we're in the middle of one of the hottest markets in the history of real estate. Most people are making more money than they've made in a long, long time. Um, so it's real easy to, to rest on our laurels and not do the daily discipline stuff. Yeah. Now this market may be a little different because it is harder. I mean, I think everyone is working harder than they ever had to earn that same or more amount of money. Uh, but to your point, it's so easy to get into, well, you know, that's enough. I'm just going to get by, you know, that's a whole different, probably a whole different podcast on that.

But, you know, when you're leading other people, typically people don't want to be associated with the leader. Who's kind of average, you know, they want to see we're moving forward. We have a vision. We're going to go solve a problem in the world and, uh, versus, okay, let's just do same of the same old thing every day. Right. Yep. That's right. I mean, at least, yeah, I think this goes back to, and we could, again, we can take this and run and have a separate podcast on it if we wanted to, is most of us don't come from a sales background. Most, most real estate agents don't come from a sales background. And so they don't know the ABCs of, of true sales. And so you think about that from the standpoint of how do you communicate your value as a real estate agent, right?

And it's the same way that you communicate your value as a broker or as a team leader or as a supervising agent or whatever. And most of it is really talking about the stuff that you kind of take for granted because you do it all day, every day, but nobody actually gets to see it. You know, I use the example all the time when we're talking to our agents, the perception in the, in the, in the, in the world is the real estate agent goes and opens the door and then they get in their fancy car and they go to happy hour with their friends. And then they show up at title and they take a picture with a big styrofoam key and they get their fancy car and go to happy hour with their friends because that's what we post on Facebook. Versus the 88, the 88 steps from contracts to close exactly how we navigated through those 88 steps and avoided the problems.

And I like to say chance that the best salespeople in real estate are, they solve problems for a profit. And I would like to see all of us position more that we're solutionists, you know, you know, without sharing details of, of the transaction, but Hey, you know, our client had this problem in the transaction. Here's how we solved it. And, and, and now that now they're happy in their home and that kind of thing, we need to get better at that in the industry. Yep. Absolutely. We do. We really do. I mean, I think, you know, we've been talking about it here is most of our, most of most real estate training is very transaction-based. It's not really based, right? Right. It's not relationship-based. It's not true sales training.

It's not the things that we really ought to be doing more of. And because of that, you know, I think there's a lot of focus just in the wrong places. And again, we could do a whole separate episode on just that, on that. Yeah. And maybe, maybe we could, and maybe we could do one on the post post-relationship chance. I just got access to some research that would indicate that. 60% of your past clients don't contact you past close because they don't think you have expertise in some areas. And there's only two to three things that they're interested in. One, they want to know the value of their investment. Right. And two, they want access to home service providers, landscaper, roofer, painter, handyman.

And we're not telling our folks in general, according to this research, we're not doing this good enough job letting our clients know that post-close, we're going to let them know every quarter what their home is worth. And that we're available for a resource for these home services. And if you do those two things, you can build a long-term relationship and all the referrals that come with it. Yeah. I mean, if you just look at the, if you look at the numbers that NAR puts out about the number of people who use a Realtor versus the number of people who use the same Realtor on their next transaction. I mean, it's kind of appalling. It's very appalling. And so we dug into that and we did some additional research and that consumers told us that they would contact their agent if they felt, if, if the agent had position that it's, hey, here's what my home is worth, that they're available for that, or that they had expertise.

I call it Angie's list, right? Could be Chandler's list, Mark's list, put your first name in front of it, but create the list of your local folks and they want to know what the value of their home is. So it's a great opportunity every quarter just to stay in touch with a little mini CMA and here's the current value of your investment. And, you know, I'm thinking of you. I mean, it could be that simple. Yeah. Easy. This has been fun, man. This has. Thank you very much for coming on. So five things that can kill a team are starting out too early, trying to be something that you're not until you're ready to do it. Getting involved in it for the wrong reason, which is usually just dollars and not doing it for the developing people and helping consumers.

Not having a clear value proposition to both your agents and your consumer. Not having strong agreements and then letting the business get stagnant. Yeah, for sure. Yeah. Those are great, Mark. And there are certain behaviors you can do that can dramatically change that and increase your income. And so I'd love to come back sometime and keep riffing on some of these things because yeah, you know, there's, it just breaks my heart. Chance, and I know you see it, uh, that, uh, the people listening here, uh, get burned out, get disappointed, uh, when they came into this business to build a life and a business by design, and they deserve all the success. And it's within their reach with just a little bit of system structure and process. Yep.

That's right. Well, Mark, thank you for agreeing to come on. I know you're a busy guy and I appreciate you taking, you know, 45 minutes out of your day here to, uh, to chat with us and share some of your wisdom, uh, over the last couple of decades in the industry. Um, it's always, anything for you, man, anything for you and your audience. I'm in. Well, thank you. Thank you. Uh, and thank you for taking the time to watch Top 5 today. We appreciate it. We hope that these are things that you can take and put directly into your business that will affect you in a positive way. Uh, and we will see you next time on the Top 5 show.