Solo Agent vs. Real Estate Team: Which Path Is Right for New Agents?
Key Takeaways:
New real estate agents can choose between two primary brokerage models: working as a solo agent or joining a real estate team. Solo agents operate autonomously within a brokerage, retaining full commission splits and control over their business, but bear all financial risk and operational responsibility themselves. Real estate team members benefit from shared expenses, established lead generation systems, and faster access to clients and commissions, but sacrifice autonomy and long-term earning potential. Research suggests that 50-65% of new agents fail within their first two years, making the choice of brokerage model a critical factor in early career success. The right model depends on an agent’s financial resources, personality, support needs, and career goals — and the initial choice can always be revisited as the agent’s career evolves.
Real estate offers you the opportunity for a rewarding career with lucrative earning potential, but there’s also a steep learning curve and significant challenges to building a successful business. Understanding your local market dynamics, learning how to negotiate deals and marketing your business to build a client base will all play a role in your ability to make a living in this competitive industry.
You have the option to work as a solo agent within a brokerage or join a real estate team. Both brokerage models have their pros and cons, and there’s no one right answer for new agents. The right choice for you will depend on a variety of factors, including your personality, financial independence, support needs, career goals and how fast you want to start closing deals.
What Is a Solo Real Estate Agent?
While solo real estate agents work under the umbrella of a brokerage, they are essentially running their own business. Brokerages operating under the solo agent model offer varying degrees of services and technology to their real estate agents to help them navigate the day-to-day aspects of their business operations. In addition, they offer varying degrees of mentorship to help new agents learn the ins and outs of the real estate business. In general, brokerages that offer their solo agents higher levels of services, technology and mentorship will take a larger share of the commission split than brokerages who provide less support to their agents.
As a solo agent, you’ll have full autonomy regarding every aspect of your business, including:
Generating leads
Creating MLS listings for seller clients
Scheduling your client meetings
Showing properties and hosting open houses
Conducting all comparative market analyses to help buyers and sellers make more accurate offers and pricing decisions
Managing all aspects of the real estate transaction process
This can be both liberating and daunting, especially when you’re just starting out and need support to help become established in the industry.
Pros and Cons of Being a Solo Real Estate Agent
The greater control you have over your business as a solo agent offers a variety of advantages, including:
Greater Flexibility – You can set your own schedule based on your personal preferences without having to accommodate team meetings and other group needs.
Greater Control – You have complete control over your brand, how you market your business and how you want your business run.
Higher Earning Potential – You don’t have to share your leads with other agents, and you keep all commissions from deals you close (minus your brokerage’s split) rather than sharing it with your team.
Stronger Client Relationships – As the sole agent working with each client, you’ll be able to build stronger, more personal connections with them. This can help you cultivate repeat clients and generate referrals that will allow you to grow your business over time.
But this independence also comes with some drawbacks when you’re starting out as a new agent:
Greater Financial Risk – You have to cover all business expenses yourself, increasing your upfront costs at a time when you’re not earning a lot of money on commissions.
Less Income Stability – It can be harder to close deals during the first couple of years of your career as a solo agent since you have to source all your leads yourself. You also don’t receive shares of commissions earned when other members of your brokerage close deals as is common when you work on a real estate team. This can make the first few years of your career more financially challenging if you don’t have sufficient savings prior to launching your real estate business.
Potentially Longer Hours – You’ll have to manage every aspect of running your business yourself, including all client relationships. You also won’t have a team member to help you out if you’re sick or go on vacation. This can force you to work longer hours and potentially impact your work-life balance.
When Should I Consider Being a Solo Real Estate Agent?
In general, you may want to consider starting out as a solo real estate agent if:
You’re Disciplined and Self-Driven – As a solo agent, you’ll have to hustle for leads, manage your time efficiently and handle every aspect of running your business. You also won’t have team members to hold you accountable or provide you with structure to your work week. The individuals most likely to thrive in this environment are very disciplined and self-driven.
You Want to Build a Personal Brand – If one of your goals is to have your clients remember your name (rather than your team’s brand) and develop long-term relationships with clients that can lead to more referrals and repeat business, working as a solo agent will give you a greater ability to build your personal brand.
You Already Have a Strong Network or Niche – If you’re transitioning into real estate from a relationship-heavy field that provides you with a natural real estate niche and a built-in sphere of influence, it can be easier to experience early success as a solo agent than if you don’t already have this network.
You Have Financial Resources – Solo agents will have to pay for all of their business expenses themselves, and it often takes longer to begin earning commissions than when you work with a real estate team. If you don’t have significant savings, it can be challenging to fund your business and stay financially afloat when you’re starting out.
What Is a Real Estate Team?
A real estate team consists of a group of agents working together within the same brokerage to serve a common group of clients. Each member of the real estate team will usually hold a specific role that is focused on one aspect of the real estate process, with a team leader who is the face of the team. Effective real estate teams leverage the strengths and expertise of each member to set the entire team up for greater success.
As a new agent, a real estate team can provide a great entryway into the industry. You’ll focus on the specific aspects of the business associated with your specialized role, allowing you to become an expert in that area of the job. Over time, you can shift roles to round out your skills and develop the expertise necessary to eventually handle every aspect of the job on your own. This approach can provide a safer way to become established in your career without shouldering all the risks and responsibilities associated with being a solo agent.
Pros and Cons of Being Part of a Real Estate Team
The collaborative environment and support network provided by a real estate team creates several important benefits for a new real estate agent:
Reduced Business Expenses – Real estate teams will typically share the costs associated with running the business, such as marketing expenses, technology systems, administrative/support staff salaries and office space. This can be extremely helpful if you don’t have the financial resources to fund a new business on your own.
Existing Marketing Assets – Most real estate teams will share the responsibility for marketing initiatives. When you join an established team, there will already be an existing website, social media presence and marketing plan, taking this time-consuming responsibility off your plate so that you can focus your energy on becoming a good real estate agent.
Established Lead Generation System and Client Base – One of the most challenging aspects of being a new real estate agent is generating leads and getting clients. Real estate teams have established lead generation systems that all team members use to convert new clients. You’ll also be able to start working with existing clients right away, allowing you to gain valuable experience handling transactions much faster than when you have to find clients by yourself.
Greater Learning Opportunities – While having a mentor agent is critical to the success of any new real estate agent, working on a team provides you with an increased source of experienced professionals to learn from. Everyone on your team will possess different strengths and skills that you can leverage to become a more well-rounded agent. This can help you grow your skills more quickly and set you up for long-term success.
Improved Work-Life Balance – You’ll have the support of an entire team who can jump in and help you out if you need time off for a personal event, vacation or simply to focus on your outside interests. You’ll be able to work more reasonable hours and have peace of mind that the business will continue running properly when you’re not there.
Greater Networking Opportunities – Building a network of industry professionals is critical to your success as a real estate agent. You’ll need to be able to connect your clients with lenders, inspectors, contractors and other professionals who can assist at different stages of the transaction. When you join a real estate team, you’ll have access to the professionals that already work with the other agents in your group, helping you grow your own personal network faster.
Reduced Financial Risk – Commissions are shared among all team members, allowing you to begin earning money faster than is typically possible as a solo agent. While you’ll receive a smaller cut of each commission when you’re part of a team, having money come in sooner can often be more important to a new agent who doesn’t have significant savings to live off of while they become established.
But the support you receive in a team environment also comes at a cost. Some potential drawbacks you might experience include:
Less Independence – You’ll have less autonomy over your schedule and how your business is run when you’re part of a team. You’ll need to be accountable to other team members, use existing systems and follow processes that are already in place. If having full control over how your business is run is important to you, this can potentially be a significant drawback.
Limited Personal Brand Development – You’ll be able to leverage the brand that has been already established by your team, which can be helpful as a new agent. But you’ll have limited ability to establish and grow your own personal brand since you won’t be the only agent working with each client. As you become more experienced and established in the industry, you may find that this lack of a strong personal brand may limit your professional growth.
Lower Earning Potential – The tradeoff to the reduced financial risk provided by a real estate team is a lower earning potential. You’ll have to share your portion of each commission with the rest of your team – in addition to the split taken by the brokerage – so you’ll have to close a lot more deals to earn the same income as a solo agent.
When Should I Consider Joining a Real Estate Team?
In general, you may want to consider starting out as part of a real estate team if:
You Like Collaboration – If you thrive in collaborative environments, a real estate team can set you up for success. Just make sure to vet the team you join carefully. You’ll have to navigate a group of people who all have different personalities and working styles, so finding a team that aligns with your personality, values and working style is critical to making this type of arrangement work.
You Have Limited Financial Resources – If you lack sufficient money in savings to fund your own real estate business and cover your living expenses until you start earning commissions on your own, then joining a real estate team makes a lot of sense.
You Want More Diverse Coaching – Successful real estate teams give you the opportunity to learn from a larger number of real estate agents. This can help you hone your skills in different aspects of the business faster than if you work as a solo agent and only have one mentor coaching you on a regular basis.
You Want More Structure to Your Work Day – A flexible schedule and the ability to control how their business is run isn’t for everyone. If you thrive in a more structured environment with established policies and systems, a real estate team will likely align well with your needs.
You Want to Start Working with Clients Right Away – It can take a long time to generate leads and cultivate clients as a solo agent. If starting to work with clients on transactions as quickly as possible is more important to your professional development than building a prospect pipeline from the ground up, then a real estate team will help you achieve your goals.
Your Initial Decision Isn’t Set in Stone
It’s important to remember that the brokerage you join when you first start practicing real estate doesn’t have to be the one you work with forever. As you progress in your career, you may find that the initial brokerage model you chose no longer meets your needs.
Many new real estate agents find it overwhelming to start out as a solo agent. It can be challenging to shoulder all the financial risks and manage every aspect of the business while learning the nuances of the real estate industry and developing a professional reputation. In these situations, starting out on a real estate team allows you to grow into your new profession in a lower stress environment. But once you’ve become a more experienced agent, you may find that you can handle the increased responsibility associated with being a solo agent and would prefer the increased income potential that comes along with this additional responsibility.
Conversely, some new real estate agents relish the challenge associated with building their own business from the ground up and have the financial resources to weather the lean months that typically exist when starting out as a solo agent. The payoff of starting as a solo agent is that you’ll likely become more established in the industry and grow your personal brand faster. But after working alone for several years, you may find that the more relaxed atmosphere of a real estate team more closely aligns with your personal needs and the type of work-life balance you prefer. You can then leverage your professional reputation to lead a real estate team and help other new agents grow and learn, which can be equally rewarding as running your own business.
Colorado Real Estate School Can Set You Up for Success
If you’re considering a career in real estate, Colorado Real Estate School can set you up for success. Our online real estate courses contain all the essential information you need to pass your real estate exam and get your license. Whether you prefer to work as a solo agent or join a real estate team, these courses will help you hit the ground running as you get started in your career.
All our online real estate courses are developed and taught by local, licensed real estate professionals who share their insights on the latest trends impacting Colorado real estate agents. This perspective provides invaluable context that will make it easier to succeed as a new real estate agent. In addition, the online format of our courses allows you to work through the materials at your own pace so that you can fit your studies into your busy schedule and optimize your learning.
All of our courses give you access to our VideoConnect Success Learning System™ containing the largest library of video content available. These highly engaging video lessons mimic an authentic classroom environment and enhance your ability to grasp the important concepts covered in each course.
At Colorado Real Estate School, we’re invested in your success. This has led us to develop our TruSupport Pass Guarantee™. If you don’t pass the real estate exam on the first try, you’ll receive extended access to all course materials while you study to retake the exam. We’ll also pair you with an instructor who will analyze your test results and develop a customized study plan for you that emphasizes the concepts you found most challenging on the exam. This additional support will give you the greatest chance of success on your second try.
Contact us today to learn more about our online real estate courses.
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