Residential Real Estate 101

“Home is the nicest word there is.” – Laura Ingalls Wilder 

Regardless of what exactly home looks like to you, the word is a universal embodiment of where we live and choose to reside. It’s a little niche in the grand scheme of the world that is solely and perfectly ours. 

And just as unique as the individuals who reside under a roof and four walls, we know that residential real estate encompasses far more than just the traditional single-family home.

So, let’s break down this corner of the industry and dive into just what residential real estate is, as well as the ins and outs of what makes this aspect of the housing market different – and, more importantly, how to succeed within it.

In this complete guide, we'll cover:

• What Is Residential Real Estate?

• What Is A Real Estate Team?

• How Do You Structure A Real Estate Team? 

• Farming For Deals

• Farming Vs Hunting For Deals

• The Importance Of Message

• The Right Marketing Channels For Residential Real Estate

• Unlock Your Newest Residential Real Estate Leads

What Is Residential Real Estate? 

Residential real estate is a multifaceted umbrella term referring to residential property.

Residential real estate can be either land or structure used as housing. That means just as much as a detached two-story white-picket-fence home in the suburbs is residential real estate, so is the studio apartment in a downtown high-rise.

Condo? Residential real estate. Duplex? Residential real estate. Townhome? Residential real estate. Converted farmhouse? Residential real estate. Inherited Victorian? Residential real estate.

With the vast differences and descriptions of what a home can be, there may be confusion on what equates to residential real estate and what resides in the commercial real estate category.

Simply put, commercial real estate indicates property zoned for business (think of shopping centers, stores, places of industry, main streets of commerce, etc.) – not dwellings used for residences.

Given that residential real estate is the most common form of real estate, there’s no wonder that specialists within this area have a variety of approaches to solicit both buyers and sellers, as well as productively connect the two.

And while we aren’t here to argue a right way or a wrong way for an agent to carve a path for themselves within the industry, there are pros and cons to striving forward solo – and selling homes alongside a real estate team.

Let’s examine both.

What Is A Real Estate Team?

According to NAR, real estate teams are becoming more and more common within the market.

And while you may imagine a chorus of twelve strong, a real estate team can be as few as two licensed agents or property salespeople working in partnership to get deals across the line. 

Why Are Real Estate Teams So Popular? 

Imagine collaborative teams at your workplace.

With more individuals working toward a common goal, more ground is covered faster, and you can work together strategically to amplify one another’s strengths, as well as lean on teammates to cover weaker spots, problem areas, or difficulties within the process.

It also allows for highly specialized individuals to synchronize and offer exceptionally high-quality experiences to customers.

What’s better than knowing a guy? Having him in the conference room next door.

According to a Workman Success Systems study, four in five agents noted working within a team made them more productive and more successful. Only 25% of respondents stated working with a team didn’t bring them higher income.

The double down? Working with a team is definitely in.

How Does It Compare To Working Solo?

Now imagine individual projects vs. group projects at school. With individual projects, while you may not get to lean on others to help carry the workload, it’s a simple switch in perspective: you do all the work – you get all the credit.

Translate that to the real estate world – you work solo, and you walk away without a need to split that final sale commission with every helping hand on your team.

If you work in a market with little to no competition, this could be a great angle. With a reliable list of new and returning prospects, as well as deep connections within your own community across the mortgage and home services space – you could thrive in an independent model.

However, as the market changes and competition rises, the pull toward teamwork may feel heavier than before.

NAR CEO Bob Goldberg explained, “Real estate teams are an increasingly popular business model in response to consumer demand for a wide range of specialties from their Realtor as they expect constant support throughout the real estate transaction.” 

Let’s dig in.

How Do Real Estate Teams Benefit The Consumer?

Just as Goldberg noted, having a team onboard to assist buyers through transactions ensures they have any and all specialty needs taken care of in-house. While this undoubtedly leads to a positive experience end-to-end, it may also secure repeat customers for future purchases.

Another bonus? Scheduling mishaps or unavailability is an uncommon occurrence, as buyers have multiple individuals ready to step in when and if their primary agent becomes unavailable.

Consumers that go the team route also gain more collective brain power working their deal and the lived experiences, hands-on skill sets, and know-how that come with working with many instead of few.

The chances are higher in a group that someone “has seen that before” or knows just the right unique approach that could be all the difference between securing that dream property – or losing it. 

How Do Teams Benefit The Agent?

It’s not easy out there in the realty market.

As referral fees and costly lead purchasing transactions skyrocket in cost, it has now become a necessity – whether as a solo or team agent – to generate your own leads without relying on external support.

Don’t believe us? Zillow’s referral fees have hit 40%, alongside Redfin’s Partner Program (for homes over $900K in selective states such as Texas, New York, and California, to name a few). And the dark horse coming from behind? That’s Realtor.com, whose referral cut is at 35% for properties over $150,000.

Fun, right?

That means that even if you do snag one lead and it leads to a successful closing sale, your commission has already been sliced and diced – and you need to be boots on the ground already looking for your next.

While working with a team also means a commission split, it also means more leads. And hopefully, more leads will be generated in a sustainable way that kicks the old-fashioned way of buying lead lists to the back of the line.

There are plenty of ways to market yourself and your team and begin generating hyperlocal, relevant leads organically. The problem? That can be a hefty list of to-dos on top of trying to sell, buy, and shop deals for your current roster of consumers.

A potential solve? Having enough hands on deck to generate leads, market your real estate team, and share work across your current roster of active clients. Gooo team!

Additional benefits include opportunities to be mentored and learn from agents more tenured than yourself, splitting expenses (whether that be for licensing fees, marketing, taxes, or the latest realty tech tools, among other costs), higher accountability, and idea sharing, and inspiration.

Collaboration is a powerful force when used wisely.

Dual Agency Real Estate Teams

When can real estate teams become a tricky situation? Dual agency is one that tops the list.

Dual agency refers to when a team or agency actively represents both the seller and the buyer in a specific transaction. While this may scream straightforward to some – to others, it may feel like a blatant conflict of interest. (So much so that multiple states across the U.S. have declared dual agency illegal, including realty heavy-hitters Florida and Texas, among others).

Pros of dual agency can include heightened efficiency, quicker turnaround, unobstructed communication, and an obvious value-add of more property information.

Cons? The consumer should be prepared to look out for (and potentially fight for) their best interest. Not to mention more work on the shoulders of the solo or team agent taking on the representation of both sides. This could mean less availability.

Now that we’ve covered the pros and cons of working as a solo agent versus alongside a team, you may be left with questions around team structure, hierarchy, and how that breakdown in compensation really works.

Don’t worry, we’ve got you.

How Do You Structure A Real Estate Team?

Just like varying organizations of all sizes and types, the hierarchy within a real estate team can differ depending on the skill sets, backgrounds, and experiences of its team members. The goal in teamwork is always to highlight the strengths of each individual to drive the collective forward, so playing to the strong suits of each is absolutely critical.

How Many People Should Your Real Estate Team Have?

This varies on your needs and market, although there are a few key roles you’ll want to keep in mind.

Administrative Assistant – Rockstar scheduler, master of calendars, key communicator, and office manager are just a few of the primary duties of your admin superstar. Critical to consumer satisfaction and necessary to keep the team machine running smoothly, you’ll need someone knowledgeable, hyper-organized, and extraordinarily friendly (and good with customer service).

VA – While this can be used in place of an admin assistant, we wouldn’t recommend it. Use your virtual assistant for anything related to data entry, heavy research, or tasks that don’t need to be customer-facing (think graphic design, marketing, or social media). If you have a terrific administrative assistant, you could also consider a virtual marketing manager or social media guru to take this spot. 

Buyer Agent – As straightforward as it sounds, a buyer agent primarily assists homebuyers in their search for the perfect property. They’re an expert at showings and catering to specific customer needs. As they are the face of the transaction, they need to be prompt, exceptional communicators, and willing to go above and beyond to secure the right place for the right price. 

Seller Agent – On the opposite end, don’t forget about those agents who specialize in working with sellers and preparing listings for market. They are in tune with the market and the ever-shifting patterns, bumps, and spikes in home pricing. They are the ones to call if you want to get top dollar for your home and do so with caution and intentionality in an ever-shifting industry. They can give transparent advice and recommendations on everything from repairs to staging and make sure everything from tours to open houses runs smoothly.

Other roles to consider may be:

• Sales agents/lead generation experts
• Marketing managers
• Transaction coordinators

Who Is Your Team’s Leader? Pick Wisely

This is more than just the loudest voice or the longest tenure.

You want a strong, confident, and knowledgeable individual with the capability to lead new and highly experienced agents through the absolute gray that is the modern real estate market. You need someone who can effortlessly step into client-facing positions while also being savvy, smart, and efficient behind the scenes of a time-bound deal. 

You need someone eager to influence, happy to train, and above all – someone dedicated to helping customers buy, sell, and take the next steps in their lives.

Additionally, you need a commander-in-chief who can steadfastly support any of the structures agreed upon and described below.

What Are The Different Structures Of Real Estate Teams?

You think there’s only one right way to structure your real estate team? Think again.

While there are many potential ways to organize your team in order to drive towards success, we’ve listed a few of the more common below:

Mentor/Mentee Model: Typically for teams of 2-10, this model revolves around more experienced agents training and mentoring those newer to the industry for a select period of time in exchange for a specific split of their commissions, among other shared costs. Cycles of mentoring can last one to two years, and this method is often seen as lower risk and cost to those in the mentoring seat. Turnover rate is high as mentees may choose to leave after their mentoring cycles are done, and they have the newfound experience and knowledge to start fresh elsewhere.

Team Leader Model: This model cements itself around a singular face of the brand. While you may be the lead listing agent, the roles reporting up to you could include supporting listing and showing agents, as well as admin, marketing, and operations support. Often community-based with strong ties to neighborhoods, this model sees high team member retention and generally reaps the reward of repeat customers.

Lead Team Model: Typically larger in size, lead team models center focus on advertising and lead generation. This can equate to lots of marketing dollars spent as well as the need for strong organizational and coordination abilities to handle the influx of lead volume. We won’t put it lightly – this is a high-risk, high-reward structure. It’s pricey and needs strong conversion and plenty of quality sales to keep it alive. Those interested need to have perfected their lead generation and should have a self-sustaining model they can rely on through the ups and downs of the market. 

Now that we’ve covered differing structures of teams you could join let’s dissect the compensation piece.

How Does Compensation Vary Across Your Team?

There’s no taboo topic quite like compensation across teams, but it’s a necessary component when considering your next steps, as well as the roles and responsibilities of those around you.

Real estate is a numbers game. And if you want to keep your turn at the plate (and avoid being one of the 60,000 realtors who left their roles within the first half of 2023), it’s wise to be knowledgeable about the breakdowns of commissions, the split of shared costs, and what money is landing in your pocket at the end of the day.

Popular breakdowns include fixed and graduated commission splits, with the 2020 NAR Member Profile reporting 37% of realtors fall into the first category and 22% fall into the second.

Fixed commission splits indicate a predictable breakdown, such as 60/40, 70/30, or 80/20.

Graduated commission splits typically present more to the agent with more productivity (an incentivized plan).

Let’s take that model by model.

For the mentor/mentee model, a mentor may expect 10-30%, while the mentee should garner 50% after any brokerage distribution. 

For the team leader model, this split is more even, with 50/50 or 60/40 being common.

For the lead team model, things can look a little different. Remember, this model requires lots of leads to keep it running, so the team could include external salespeople and lead gen support. In those cases, 25-30% of the commission or flat fees could work.

Keep in mind that there are plenty of other costs necessary for the successful running of a real estate team.

Make sure to manage splits appropriately, especially as you consider end-of-the-day commission breakdowns. If you want to minimize turnover, make sure your team members have enough to stay motivated and continue contributing in a way that’s effective and profitable to themselves, your customer base, and your entire team.

Now that we’ve examined just what residential real estate is and dug deep into the varying types of support buyers and sellers can hope to receive through their transactions in this space – we’re ready to take the next step and examine how to take that team and put it to use through the accumulation of prospects, leveraging the right message to find the right clients, and step-by-step guidance on getting that right message out into the world in the right places and the right times.

Farming For Deals

Regardless of your real estate team structure, you need leads to secure new customers and generate revenue from residential sales. This not only ensures you’re helping the buyers and sellers in your community who need you most, but it also ensures the long-term sustainability of your property business.

The good news? Real estate farming – or marketing with a central focus on building brand, establishing trust, and ensuring a consistent pipeline of leads – doesn’t require you to be a seasoned expert.

It’s all about creating relationships and marketing yourself as that go-to expert within your community, so when the need arises to buy or sell property, you’re the person they go to.

Read more about the ins and outs of real estate farming at the link below, including:

• Farming vs prospecting
• Off-market leads
• Developing a healthy lead pipeline
• Data and automation

Real Estate Farming 101

Farming Vs Hunting For Deals

While farming for leads sets you up for success when the need to buy or sell within your community arises, what about the right here, right now?

Timeliness is a critical component of the real estate market, and if your phone isn’t ringing with customers who are ready, it’s up to you to go find them.

Real estate hunting places emphasis on getting listings now. Instead of spotlighting the trust, relationship, and brand-building discussed within real estate farming, hunting is all about the transaction. As a real estate agent, you need to be able to find motivated buyers and sellers all on your own – and we’re here to help you do it.

Read more about uncovering customers in need and how you can support them in the short term at the link below, including:

• The benefits of real estate hunting
• Types of customers you can reach out to today

How To Generate Real Estate Leads – Hunting vs Farming

The Importance Of Message

Regardless of whether you’re hunting for deals or taking the time to farm them, your message is what’s most important.

As a community expert, you should always strive to be relevant and neighborly in your outreaches. Gone are the days of invasive, predatory, and spammy approaches that turn away customers and give the entire industry a black eye.

Want to come out on top? Follow our TORN hyperlocal lead generation approach.

T – Targeted. Be precise in who you’re reaching out to. One size does not fit all in real estate marketing, and personalization will always be the key to success. Leverage public record data and cutting-edge real estate tools to create lists of prospects that share similarities, allowing your approach to already feel customized from its onset. Looking for out-of-state absentee owners? Check. Potential downsizers? Got it. Free and clear homeowners looking to move? Absolutely.  

O – Outbound. Reach out to your prospects with an omnichannel approach. Create visibility as the more impressions equate to more trust. Leverage phone, email, in-person, direct mail, and digital advertising to meet customers where it’s most convenient for them. Outbound methods are also less expensive and more effective than inbound.

R – Relevant. Break through the noise with messaging perfectly suited for your recipient. Remember, it’s about them vs you – the issues they face and their unique circumstances. Make sure your messaging educates, entertains, or simply starts a conversation. Relevancy is all about knowing your audience and using specific insights where big businesses can’t – or simply won’t.

N – Neighborly. Separate yourself from aggressive agents and businesses that won’t take no for an answer. Using empathy immediately makes you a team player, and that sensitivity will go far in securing you new neighborhood clients and establishing you as the right person for the job. Don’t center your messaging on how you’re the best. The focus here is wrong. It’s not about you. Instead, adjust your perspective. What value are you bringing to your prospect? How are you the answer they’re looking for? You are serving them, not the other way around.

Read more about how our TORN approach equates to an innovative hyperlocal lead generation strategy sure to scale your business.

The Right Marketing Channels For Residential Real Estate

You’ve got your message…now what do you do with it?

You leverage outbound methods to connect with your potential customers and build your brand through heightened visibility.

Check out our breakdowns below for how to expertly utilize any and all outbound marketing methods to generate your new leads.

By Phone

Did you know 69% of prospects accept cold calls and emails? And that 49% actually prefer cold calling as a first point of contact?

Read more with our pro guide to phone and text message marketing.

By Email

With an average open rate of 46-50%, email marketing shouldn’t be ignored. Leverage personalization where and when you can to increase the chance of readership, and remember to present yourself as their solution. 71% of buyers are open to emails when researching new solutions, after all.

Looking for templates to make your email marketing a breeze? Read more on our 7 real estate marketing email templates you can create.

By Direct Mail

Think traditional post is old fashioned? Think again.

80-90% of direct mail is routinely opened, with 42% of recipients actively engaging with their direct mail. Think about all of the impressions you’ll get with one singular postcard.

The first is when your client retrieves their mail. The second is when they sort that mail within their home (not to mention when others see it here). Even if that direct mail goes into the trash, the client sees it again as it hits the bin.

Read more about our tips and tricks for direct mail marketing and how you can use it to scale this year.  

By Digital Advertising

Did you know 40% of consumers prefer targeted ads over irrelevant, general ones? Or that 80% of internet users are more likely to click on an ad that is specifically targeted to their interests?

Sending that ad into the void has purpose, we promise.

You just have to target effectively by utilizing a custom audience. That way, you can focus on hitting exactly who you want with your message.

Learn more about using targeted marketing across social media and digital platforms.

By Door Knocking

Gone are the days of door-to-door salesmen and invasive after-hours house calls. When done with a neighborly, kind approach, door-knocking can be a great way to generate leads (and sales) for residential real estate agents.

In fact, 20% of door-knocking results in a conversation, with 10% transitioning into quality leads.

Interested? Read more about the benefits of door-knocking and in-person marketing, as well as tactics to do it right.

Use PropertyRadar To Unlock Your Newest Residential Real Estate Leads

You’ve made it to the end. Are you a residential real estate expert yet? 

No matter where you are on your journey through the housing market and property business, PropertyRadar is here to support you with revolutionary tools, data-driven resources, and information on hundreds of millions of properties across the U.S. 

We’re confident we can help you unlock your newest lists of leads by harnessing the power of public records.

So, what are you waiting for? 

Get started now with a free PropertyRadar trial, grow your residential real estate business, and tap into over 150 million properties nationwide. 

References: 

Bankrate, What Is Residential Real Estate?

National Association of Realtors, Number of Real Estate Teams is Growing, NAR Survey Finds

RisMedia, 2023 Real Estate Teams Outlook

The balance, How Do Real Estate Teams Work?

CA Realty Training, Joining a Real Estate Team: 10 Pros and Cons

Forbes, Dual Agency In Real Estate: Everything You Should Know

Rocket Mortgage, Dual Agency: What You Should Know Before You Buy

Follow Up Boss, How to Build a Rockstar Real Estate Team in 9 Simple Steps

Dotloop, Real Estate Teams The Ultimate Guide

The Close, 3 Foolproof Team Models: Hiring, Splits, Lead Gen + More

National Association of Realtors, How Successful Teams Make It Work

Holbrook Realty Group, Realtors Are Leaving The Profession

Leadium, Inbound vs Outbound Marketing: Which Approach Will Win?

Smith.Ai, 67 Cold Calling Statistics for Successful Sales Outreach

FinancesOnline, 64 Cold Calling Statistics You Must Learn: 2024 Challenges & Data Analysis

HubSpot, The Ultimate List of Email Marketing Stats for 2023

Outplay, 30+ Cold Email Statistics You Need to Know In 2023

Zipdo, Essential Direct Mail Marketing Statistics In 2024

Gitnux, Targeted Advertising Statistics