Guy Gal, co-founder and CEO at Side, and Steve Capezza, president at Side, were both recently interviewed by the RealTrending podcast to talk about, among other things, the future of real estate teams.
You can find the full interviews above or on the RealTrends website:
- Side’s Guy Gal on trends in the team business model
- Side’s Steve Capezza on driving real estate team growth
Read on for some highlights — particularly their thoughts on how top-producing teams are addressing one of the most significant problems facing real estate today.
Teams are the future of the real estate industry
Teams have been steadily increasing in popularity over the last few years because agents on teams, armed with better resources and more in-depth support, are able to far exceed the service levels one individual agent can provide.
“This is the most important transaction in someone’s life,” said Steve. “It’s so critical that buyers and sellers work with someone who will provide them the best value — and agents on teams are better positioned to do that than solo agents.”
“This is the most important transaction in someone’s life. It’s so critical that buyers and sellers work with someone who will provide them the best value — and agents on teams are better positioned to do that than solo agents.”
— Steve Capezza, Side president
“Teams outperform individuals and provide a whole lot more value to the consumer,” said Guy. “That was really obvious to me and my co-founders when we founded Side six years ago. Today teams are much more common than they used to be, which is a great thing for the consumer.”
And it’s not just teams, but boutique teams that will continue to over-index the market and dominate the industry.
“Structuring your business not just as a team, but as a boutique company you own will have an outsized impact on how you convert all your opportunities,” said Guy. “You’ll instill more confidence and win more business as an owner than as a contractor.”
The team’s brand matters more than the brokerage’s brand
Guy also stressed that while many traditional brokerages have hopped on the teams bandwagon in recent years, early attitudes towards teams were less than welcoming.
“After years of ignoring, then ridiculing, then outright fighting teams, now traditional brokerages are finally getting out of their way. Teams have built such strong reputations that brokerages have no choice but to say: ‘Please continue affiliating here, because we need the halo effect of your name next to our brand.’”
The rise of teams has led to the traditional brokerage’s brand recognition holding far less weight than it used to. Consumers select an agent based on the agent’s reputation, not the name of their brokerage, which is why traditional brokerages are more willing to make accommodations for teams to keep them on the roster to stay competitive.
“Structuring your business not just as a team, but as a boutique company you own will have an outsized impact on how you convert all your opportunities.”
— Guy Gal, Side co-founder
“It’s great to see that agents have been able to move the goalposts and take more control over their businesses,” said Guy. “At Side, we want to push the industry even further in the direction of teams, helping them differentiate themselves and take ownership of the companies they are running but don’t actually own (because of the traditional brokerage affiliation that gets in the way).”
Since the best agents in real estate don’t need to fall back on their brokerage’s brand name, more of them are breaking off and transforming their teams into companies that have their own unique branding. Operating a company, versus simply leading a team, offers far greater control over your processes, data, and company culture, not to mention how you present yourself to consumers.
“We’re focused on making ownership simple,” said Steve. “Because when the best agents own their own companies, they’re able to provide a much better consumer experience.”
Teams counteract the biggest problem facing the real estate industry
Guy and Steve are in agreement on the biggest threat to the real estate industry: part-time agents.
“More than half of all transactions are being conducted by part-timers,” said Steve. “Just imagine you’re working on the most important financial transaction in your life, and you’re not working with an expert. That’s a problem, and it’s incumbent upon the industry — not just Side — to solve it.”
“More than half of all transactions are being conducted by part-timers. That’s a problem, and it’s incumbent upon the industry to solve it.”
— Steve Capezza
But that’s a hard problem to solve when traditional brokerages are incentivized to keep part-time real estate agents on their rosters.
“If you’re a traditional brokerage, you’d rather have a thousand agents doing one transaction a year because they’re going to pay you 50% on those deals,” said Guy. “Compare that to having a hundred agents doing 10 transactions a year paying you 25% on each deal. You make more money on the same number of transactions if they’re more distributed.”
Traditional brokerage models were not built to support highly professional, top-producing real estate agents — the ones who are providing the highest possible level of service to their communities. But when those top agents are empowered to build their own teams, they’re able to serve even more consumers and safeguard the future of the industry by training less experienced agents.
The teams thriving in 2023 are growth-minded
Even though the real estate market has contracted, the agents leading the most successful teams in the nation are aiming to grow this year.
“I’ve talked to so many of our agent partners about how they’re faring in this market, and I always expect them to have some anxiety about the whole situation,” said Guy. “But they’re approaching this market with a tremendous amount of optimism, because this market presents a great opportunity to lean in and invest in their business.”
“Even with the contraction, we’re going to have a little over 4 million homes sold this year — that’s a lot of opportunity,” said Steve. “And we’re already starting to see the top folks rise to meet that opportunity and pick up market share.”
“There is so much power in community.”
— Steve Capezza
In a down market, many less qualified, part-time real estate agents tend to exit the industry, leaving room for top agents and teams to pick up market share. But to take advantage of that opportunity, you have to be mentally and operationally ready to grow through this market, not just survive it. And one of the best ways to do that is to surround yourself with people who share your growth mindset.
“There is so much power in community,” said Steve. “The Side Community consists of thousands of agents from hundreds of companies across the country. The collective brain power from that network is unmatched, and by sharing best practices with each other, they help each other grow through this market.”