All about real estate teams in California

Thinking about creating or joining a real estate team? This article covers what you need to know about real estate teams in California, from the basics, to choosing a team name to advertising.

A real estate team is a group of sales agents or broker-associates who pool resources and leads to promote and expand their practice. They consist of two or more licensees, often with self-identified duties.

For example, one agent might focus on homebuyers and another on sellers. One might be a seasoned negotiator, and another might be a new agent who is still learning, but in the meantime enjoys taking buyers on tours. Or, the team may be less formal, with each agent assisting their own clients, but sharing some office and operating costs.

Why join a real estate team when a practicing agent is already obligated to be part of a brokerage?

Teams typically provide sales agents with a higher number of leads, since more agents are working together to pool clients and find new ones.

Being a member of a team is particularly advantageous for new agents, as the mentorship and even official training provided by senior team members can be invaluable in the agent’s early career. However, along with training and access to leads, sales agents are often required to share a portion of their earned fees with their team leader(s). This is in addition to the fee split agreed to with their broker.

That being said, there are opportunities to cut costs when joining a team, too. Teams may share the costs of office space, supplies, marketing materials and real estate assistants.

From the client’s point of view, hiring an agent who is part of a real estate team also provides many benefits. For example, consider a home seller. When they hire a real estate team, they have access to:

• more resources for the agent to market their listing;
• a wider range of availability, as even if their primary agent isn’t available to assist, someone in the office is usually available at all times; and
• expertise not just in one area, but in as many areas of the buying and selling process as there are team members.

The use of a real estate team name may also be advantageous for agents seeking to stand out while operating in large brokerages. Name recognition is significant in real estate — if a former client wants to recommend you to their friends and family but can’t recall your name, you’re out of luck. A memorable team name helps past and future clients remember you and helps them make that connection.

Choosing a team name

A team name needs to sound professional, look good on marketing materials and be easily recalled. But it also needs to follow certain rules.

In California, the team name needs to include the last name of at least one of the sales agents on the team, in addition to the word:

• associates;
• group; or
• team. [Calif. Business and Professions Code §10159.7(a)(3)(B)]

For example, a sales agent who wants to start a real estate team whose last name is Lopez might use names such as Lopez Real Estate Team, Lopez Realty Associates or Lopez Home Sale Group under the rules. The team name can also combine more than one last name of agents in the team, for example the Lopez-Lamott Realty Team.

However, teams are prohibited from using the terms:

• broker;
• brokerage; or
• any other terms that suggest the team is operating independently from their responsible brokerage. [Bus & P C §10159.7(a)(3)(C)]

Agents may be tempted to get more creative when naming their team, which might work in their favor but also might place the team in a box. For example, including a certain type of real estate in their team name (e.g. Lopez Luxury Property Associates), might sound nice, but it also has the potential to prevent buyers and sellers of other types of real estate from contacting the team.

Finally, before settling on a team name, do a search online for the team name to ensure that the domain is available for a business website, the name is not under trademark protections and that there are no negative associations with the name.

Related article:

A website for every agent — how to get started

Advertising team names

One of the main benefits behind choosing a team name is the increased name recognition that comes from promoting the team to clients. But your special status as a real estate team doesn’t preclude you from following the same advertising rules as other licensees.

When marketing a team, any advertising material needs to display prominently the name and license number of at least one member of the team. [Bus & P C §10159.6(a)]

Further, the employing broker’s name needs to be displayed just as prominently as the team’s name on any advertising materials. [Bus & P C §10159.6(b)]

Advertising material includes:

• real estate purchase agreements;
• business cards;
• stationary;
• advertising flyers;
• television ads;
• print ads;
• electronic media;
• directional signs; and
• any other materials soliciting business from members of the public. [Bus & P C §10140.6(b)(2)]

A team name is not the same as a fictitious business name (DBA). A broker, corporation or sales agent using a DBA needs to have the DBA listed on their license. Thus, DBAs are more official in nature, as they are required to be filed with and accepted by the county and the Department of Real Estate (DRE). In contrast, paperwork does not need to be filed with the DRE to use a team name. [Bus & P C §10159.5(a)]