A Real Estate Team Agreement Template That Actually Works

Let’s talk about something that might not seem exciting at first glance but is crucial for any real estate team: the real estate team agreement. Think of it as the rules of the game, a playbook of sorts, or that trusty map that keeps everyone moving in the complex world of real estate. Without such an agreement, you might find your team heading in different directions, dealing with disputes on things like commissions or responsibilities. 

In this article, we’re breaking down everything you need to include in an airtight real estate team agreement that will set up the entire company for success. 

Why Use a Real Estate Team Agreement? 

Do you actually need a real estate team agreement in the first place? For most teams, the answer is “yes”. 

When you throw a bunch of ambitious, driven individuals together, chaos can ensue faster than you can say “open house.” A team agreement lays down the law that everyone should work by, clarifying roles, responsibilities, and expectations. Of course, a clear agreement works best when backed by strong, inspiring leadership that sets the tone for collaboration and success. This helps keep everyone on the same page (or at least in the same book). 

Real Benefits for Growing Teams

If you already have a team that works like a well-oiled machine, then an agreement might be more of a formality. An important formality, but not as urgent as when your team is evolving. For real estate agents with a growth-mindset, who are focused on building out a larger firm and making more impact, a team agreement will provide: 

• Clarity and Structure – Offers a clear framework for team operations, reducing misunderstandings and conflicts.
• Enhanced Collaboration – Encourages teamwork by establishing common goals and fostering a sense of shared purpose.
• Professionalism – Demonstrates a professional approach to business, which can enhance the team’s reputation with clients, within the industry, and with potential employees.
• Accountability – Holds team members accountable for their roles and contributions, leading to improved performance.
• Conflict Resolution – Provides an agreed-upon method for managing disputes, which can minimize disruptions and maintain team morale. 
• Attracting Talent – A well-defined agreement can attract skilled professionals who are looking for clarity and structure in their work environment.

When firms are growing, lots of things tend to change (and sometimes all at once). These agreements protect not only the leadership of a firm, but also the team members who do a lot of the daily work. 

Plus, reviewing and updating it periodically will ensure that the agreement is evolving alongside the team. And if you’re still evaluating whether a team is the right fit for your career, here’s a helpful guide on how real estate teams work, covering the benefits, challenges, roles, and more. It will help to keep people in alignment as you add new agents and have less face-time. It will also be a helpful guide for new agents to adopt your culture and learn the ropes. 

There are other protections too, depending on what you choose to include in your agreement. You could add sections on budgeting and expense management, training and professional development, etc. You might be surprised at just how often consulting the team agreement can help maintain clarity, accountability, and a collaborative environment within your team.

When to Put Together a Real Estate Team Agreement

There are plenty of scenarios where it makes sense to introduce a real estate team agreement. We already touched on how this agreement can serve as a sort of roadmap for growing teams, but there are other situations where a team agreement can help:

• Forming a New Team – If a particular group of agents or staff haven’t worked together before, you’ll want an agreement that sets the groundwork for operations and everyone’s expectations. 
• Team Structure is Changing – If there are significant changes in the team, such as merging with another broker, losing key agents, or going through a re-org, it’s a good time to review and update the agreement.
• You Want to Address Performance – If conflicts or performance issues arise within the team, revisiting the agreement together can help clarify expectations and areas for improvement without calling people out individually. 
• Kicking Off a Big Project or Initiative – When planning for large-scale projects such as high-profile commercial deals or moving into a new space, having a clear agreement can align the team’s efforts and objectives.
• Completing Annual Reviews – It’s beneficial to review and possibly revise the agreement periodically (for example, annually) to ensure it remains relevant and effective for the team that you have.

Who Writes the Agreement? 

We think it’s a good idea to talk about the overall agreement as a group. This ensures buy-in and means no agent could claim they weren’t aware of important information. These are the individuals that should be involved: 

• Team Leader or Broker – Typically, the current team leader or the broker overseeing the group is responsible for drafting the initial agreement, as they usually have the most experience and understanding of the business structure.
• Involvement of Team Members – All team members should be involved in discussions about the agreement to ensure their perspectives and concerns are considered. Collaborating on this can foster more engagement and commitment to the agreement.
• Legal Counsel – We suggest talking with a legal professional specializing in real estate or business agreements to ensure that the document is legally sound and compliant with your local laws.
• Admin or Support Staff – In some cases, administrative staff can assist with drafting or organizing the agreement, especially if they are most familiar with day-to-day details.

By involving key stakeholders and ensuring the agreement is created at the right time, the team can establish a solid foundation for collaboration and future success.

The Key Elements of a Strong Real Estate Team Agreement

There are a lot of different styles you can use for your template. Exactly what you include will depend on things like the roles of the team members, commission structures, deal timelines, etc. That being said, a real estate team agreement template typically includes some standard elements to ensure clarity and cooperation among team members.

Here are a few of the key pieces you’ll want to include: 

• Introduction – A brief overview of the agreement’s purpose and the parties involved.
• Roles and Responsibilities – Clear definitions of each member’s role, including specific duties, expectations, and any designated titles (e.g., team leader, buyer’s agent, listing agent).
• Commission Structure – Details on how commissions will be divided among team members, including any splits for leads generated by the team versus individual efforts. This may be team member-dependent, for example, junior agents may take a smaller commission. Create a section for each role and the associated commissions. 
• Dispute Resolution – A procedure for resolving conflicts, which might include mediation or arbitration steps and timelines for addressing grievances. Lay out the workflow that someone should follow if they do find themselves in a dispute. 
• Confidentiality – Guidelines on handling sensitive information, including client data and proprietary business strategies. We’ll touch on this below, but you may need to do area-specific research to ensure you’re covering all of the legal bases at a local level. 
• Terms and Termination – The duration of the agreement and the conditions under which it can be terminated by either party. What if someone wants to leave the team, or go out on their own? And how long is this agreement binding for? 
• Non-Compete Clause – List the specific restrictions on team members working with competing firms or soliciting clients after leaving the team.
• Performance Metrics – Expectations regarding performance benchmarks and accountability measures, including regular reviews. If there are certain quotas you expect to be met, they’ll be listed here. This is also an area to address performance improvement measures (if someone isn’t performing as expected, what happens?). 
• Marketing and Branding – Guidelines on how the team will present itself in marketing materials and online, including the use of logos, signage, and promotional strategies. If you have a brand standards guide, you can link to it here.
• Amendments – Procedures for making changes to the agreement, including how amendments should be documented and agreed upon by team members. 
• Signatures – A section for all parties to sign, confirming their agreement to the terms outlined in the document.

The goal is not to bombard your agents with legalese, but to create a clear understanding among team members and provide a framework for successful collaboration. The more straightforward you can keep your template, the easier it will be for your team to review it and reference it when necessary. 

Common Pitfalls to Avoid in Drafting a Real Estate Team Agreement

Even the most seasoned real estate pros run into trouble once in a while. Trust us, you don’t want to trip into these:

• Vagueness – If your agreement reads like a mystery novel, you’re in trouble. Get specific! The things you lay out in the agreement should not really be up for interpretation. 
• Ignoring State Laws – Different states have different rules. Make sure your agreement complies with local regulations, or you might end up in hot water. If your company operates in multiple states or countries, don’t assume that a template that works in one area will automatically work in another. 
• Failure to Update – Life happens! If your team adds new members or roles change, make sure to revisit your agreement. For example, in a down market, it may be tougher to recruit agents, and you’ll need to amp up your commission model. Or, perhaps your lawyer advised you to add a clause based on new housing regulations.  The agreement should grow with you, not become a dusty relic.
• Not Getting Sign-Off – Ideally, your current team members agree with the agreement. Even better if they have some input on the document in the first place. As  you bring on new people, they should read it carefully and make sure they’re comfortable before signing. If staff won’t take the time to read before signing, you don’t really have their buy-in (even though you’re officially “covered”). If anything in the agreement makes someone uncomfortable, take the time to talk with them about why. 

Cover Your Legal Bases

While drafting an agreement is essential, consulting a legal professional is even more critical. They’ll help ensure you’re not missing any important legal jargon or state-specific regulations that could come back to bite you later. Plus, they can help you navigate any other legal considerations that might pop up along the way, like liability issues or dispute resolution mechanisms. At a minimum, have an attorney look over these areas: 

• The duration of the agreement or what conditions would render it irrelevant. 
• Confidentiality clauses and precautions around protecting things like client lists, financial details, etc. 
• Non-compete and non-solicitation clauses including any provisions that would prevent team members from competing with the team. 
• Dispute resolutions that may eventually involve attorneys, such as mediation.
• Compliance with local, state, and federal laws in the area where business takes place. 
• An indemnification clause is designed to protect team members from liability related to actions that might be taken on behalf of the team. 
• Signatures are required to ensure everything is legally binding. You may even want to have it notarized for added security. 

And of course, remember that we are not lawyers. Any advice given in this article should not take the place of consulting with a credible attorney. Every company and every situation is unique; working with a local law firm will ensure you get the most accurate guidance. 

Customize the Team Agreement Template and Make it Your Own

Even with an awesome template, nothing is one-size-fits-all. Customization is key when it comes to making an agreement work for your group! Here are some tips to make your agreement uniquely yours:

• Reflect Your Team Culture – If your team is fun and laid-back, let that shine through in the language of your agreement. Add a few jokes or light-hearted comments to keep it engaging. You want your employees to feel at home when they read it. 
• Be Flexible – Life is unpredictable, so build in some flexibility for changes. Maybe include a clause about revisiting the agreement every six months.
• Involve Everyone – Get input from all team members when drafting the agreement. This ensures buy-in and makes everyone feel like they’re part of the process.

Think of a well-structured real estate team agreement as your roadmap to success. It helps avoid misunderstandings and keeps everyone moving in the same direction. So, gather your team, grab some coffee (or something stronger), and start drafting that agreement! And remember, it’s not a one-and-done deal – make sure to review and update it regularly. After all, when it comes to real estate – just like many areas of life – change is the only constant!