Team Leader Economics
How Team Leader Margins Change With Team Size
Updated
Bottom line: Net margin is highest on the smallest teams and lowest on the largest. HousingWire reported the smallest teams' net income at 40.6% in Q3 2023, after a drop from 49.3%.
Alexis Ruiz-Ney, Partner, Jumpstart Partners · Concierge Director, Houston Properties TeamOr call (713) 425-4194.
What share of revenue did the smallest teams keep as net income in 2023?
HousingWire reported on an Arizona accounting firm's quarterly team benchmarks for Q3 2023. The report covered July 1 through September 30, 2023.
In the HousingWire report, net income for the smallest teams fell from 49.3% to 40.6% that quarter. No other size group lost more in absolute terms.
Net income dropped in five of the six size categories the firm tracked, per HousingWire.
Does a team keep a smaller share of revenue as it grows?
The same HousingWire report placed the highest net income percentage at the smallest teams. It placed the lowest at the largest teams.
Operating costs went up in all six size categories during the quarter, per HousingWire.
A 2021 HousingWire report on the RealTrends Team Profitability Study quoted Murray saying margins tend to shrink as teams grow, but only a little.
That study measured gross margin, and the 2023 benchmarks measured net income. The two figures answer different questions.
How much of a team's gross margin goes to marketing?
HousingWire reported that teams in the 2021 RealTrends study kept an average gross margin of 61.8%.
The brokerages RealTrends benchmarks, across all business models, averaged 13.8%, per the same HousingWire report.
HousingWire also reported that teams put 18% of gross margin into advertising and marketing. Brokerages spent about 2.4%.
What changes in spending once a team passes six people?
Real Estate News covered the 2024 team survey by RealScout, T3 Sixty and Tom Ferry International.
Real Estate News reported that the T3 Sixty study put the median team at six people in 2024.
Per Real Estate News, most teams of two to five agents spend $1,000 or less a month on lead generation. Teams of six or more go much higher.
Real Estate News reported larger teams typically paying referral rates of 30–34%. Small teams paid 25–29%.
Filed in The group.
Questions & answers
What do agents in the US and Canada ask about this?
What margin are brokerages running on in 2025?
HousingWire reported that AccountTECH's brokerage EBITDA Margin Index stood at 3.4962% for May 2025. AccountTECH tied that reading to resilience and cautious growth while interest rates stayed high and transaction sides fell. HousingWire also reported that the seven-year average for May was 4.69%. That average sits more than a full percentage point above the May 2025 figure.
The index tracks brokerages, and it measures EBITDA. Team benchmarks report gross margin or net income instead. Keep that difference in mind before you set the numbers side by side. If you are weighing a move of your team to another sponsoring broker, the broker's margin is one input. Your own team's net income is another, and it comes from your books.
Who sets the terms of a team split at Real?
Real's help article says the Team Addendum on file with Real governs the team split. The split is a fee each team member pays the team leader on every transaction. The same article says the split is still paid after a member caps with Real. A capped member's closings keep carrying it.
The terms live in the Team Addendum, so read yours line by line with each member before anyone signs. The help article explains how the split is paid. The rate itself is whatever your addendum sets.
What did the average team in the 2021 RealTrends profitability study look like?
HousingWire reported that teams in the 2021 RealTrends Team Profitability Study averaged $3.33 million in gross commission revenue. Those teams had been in business for an average of 10.9 years. Per the same HousingWire report, they averaged 13.9 agents and 4.5 employees each.
Those averages run well above the six-person median that Real Estate News reported from the 2024 T3 Sixty study. The RealTrends margins describe a larger, longer-running team than the typical one. The RealTrends study also came three years before that survey.
Who can I talk my team's margins through with before moving to another sponsoring broker?
Alexis Ruiz-Ney is the sponsor for Jumpstart Partners, a group of agents at Real Brokerage. The standard we hold to is a sponsor at Real who answers the phone. Bring your team's numbers to that call. You can work through how the team split and your costs would sit at Real.
Jumpstart Partners has run since 2019. Every week we share one thing that is working right now, from the person doing it. We also offer AI tools, scripts and live sessions. They are open to any agent at any brokerage.