Real estate professionals are grappling with a gray area in the industry: independent contractor status. With recent litigation shining a spotlight on this contested issue, tell us:
Is independent contractor status a help or hindrance to real estate?
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The only way for real estate brokerages and agents to survive is to maintain independent contractor status. Aside from social security which would need to be taken out of checks brokerages would be subject to all laws regarding health coverage overtime etc.. Also work place rules including when agents need to work or be accountable would change dramatically.
Lastly and bottom line agents that enjoy high commission splits would see there splits reduced by 25% or more!
Completed survey.
Independent contractor is critical to the RE industry. As IC, agents can perform and develop business at their capacity vs. a business structure such as an 8-5 job. Agents earning are in relationship to their life schedule, input and desire to develop business personal growth.
I agree with Mark. I’ve been in real over 30 years and the reason I choose real estate as a second career is because you’re an independent contractor. You have the opportunity to build your own business and spend quality time with your family and as a single parent for 8 years that was was important to me. I like the fact that you can budget your finances and market yourself and your listings as much as you can afford. Because most of your expenses are a tax right off you can build your business and still make a profit. Also being a salesperson gives us motivation to have a healthy competition within of office and the industry as a hold. I’m selling homes to my client’s children and they are like family to me and I love it!
There wouldn’t be anything unique if we were not independent licensed agents working for our individual clients and customers. The one person shop couldn’t compete. Only the large Brands could pay salaries. I believe it would help the agent who isn’t producing a living wage but a Firm wouldn’t hire them. I my opinion if you are not an independent contractor the level of service to the consumer would be diminished. You work hard for your business; as an employee the drive would be lost.
I prefer independent contractor status.
I am good with the independent contractor status.
It is important to keep real estate agents as independent contractors!
I am a Broker
A help
Independent Contractor status is the way it should stay.
Every person has their reasons for becoming a Realtor. Nothing is given to you. No insurance, paycheck, etc.
It is a profession that allows flexibility. I took care of my dying parents and still maintained my business.
The flip side is that some agents are terrible and do not serve their clients well. As independent contractors nobody seems to get fired for poor production or poor service.
Susan, I disagree. The buyer or seller would be the one to fire them. I have had clients come to me before after working with other agents, because their former agent wasn’t doing the job.
I agree with whole heartedly ! The level of professionalism is non existent with half the so called realtors out there, and they get away with it.
Part of being a Realtor is for the independence. “Independent Contractor”
Please keep the state and feds out of our industry.
Thank you
I love the freedom to freelance without restrictions of a “JOB”.
Managing real estate salespeople and their comings and goings would be literally and virtually impossible for employers (cats come to mind) and such a huge paperwork nightmare, I doubt that brokers (of which I am in one state) could keep up with it… it’s the nature of the business to act as independent contractors… Now I could go along with broker’s who want to give agents a choice, if and only if the agents are permanent full-time agents and choose a company plan… but I have doubts about that plan as well, both legally and morally. A broker is already fully responsible for an agent’s actions in terms of real estate law, but can you imagine the nightmare of being responsible for an agent’s actions during an 8-hour workday!??? Wow, no thanks!
If being an agent changed to employees the job would be broken into several positions and dumbed down.
How can anyone dispute the fact that we are independent contractors? The state of CA clearly identifies a contractor as one who is independent and not under direct control of the company.
The contractor has:
1. free will to come and go as they please
2. have the right to refuse any type of work or assignment
3. no set hours to be present at the business
4. Is issued a 1099 for any work performed at year end
The reason for the confusion is the state of CA mandates that we work under a Broker, so the state created this gray area that we have to defend. Another case where the left hand doesn’t know what the right hand is doing.
If we had not been mandated to work under a Broker, this state created idiotic “Catch 22” would not be an issue.
I consider myself self-employed as a Realtor. I consider myself an independent contractor as a Realtor. If I wanted a “normal” job I would go out and find one. This gave me the freedom to assist my aging mother-in-law in 2006-07; my aging mother 2001-09; my late husband during 2013. All that as needed at any time of the day or night. REALTORS are already “unionized” with our NAR/CAR/local Association dues. Why saddle us with being classified as “employees” when we want our independence and ability to make most of our own negotiations on behalf of our clients (instead of telling them, “Wait while I run this past The Boss to find out if it’s OK with him/her”… I AM THE BOSS! (Except, of course, for the part where I’m under my broker’s personal business plan and legal responsibility; even then I’m gone if I don’t agree)
IF IT ISN’T BROKE, DON’T FIX IT! Independent contractors are unique to this business because that is the way it works. Agents who don’t have the drive, don’t survive and those who do thrive.
Margot hit the nail right on the head. IF IT IS NOT BROKE DON’T FIX IT. I like being my OWN BOSS. I like the freedom of coming and going at will. I’m tired of the GOVERNMENT trying to stick their nose where it doesn’t belong.
The Big Banks have wanted to be in the real estate business far too long. This is another ploy to garner support for employee based real estate – give them another 5-10 years – the way we do business now will be nothing like it will be then. I support the independent contractor status – but I’m afraid the handwriting is on the wall…..
as a broker I prefer the agents to be independent contractors we should continue defending our business model to keep the other venues that could disrupt what we have that works
I’m a broker. But as an agent being an employee, I feel a lot of the desire to grow your business you wouldn’t have. As a independent contractor you can make your hours around your family and life and be as successful as you want to be as long as you fulfill the obligations to your broker and co-workers.
Perhaps it is time to clarify the relationship.
Clearly an independent professional with oversight to insure ethics and State laws are followed is necessary and works best.
However there are some additional attributes that will improve the relationship.
The best fit would be more of a Franchisee and Franchisor relationship structured to cover all legal and ethical issues.
Real estate brokerage is one of the last professions that support the cottage industry (which was practically eliminated by the rise of big corporations during the early to mid 1900s). A cottage industry is created by the independent real estate practitioners (82% of Realtors) who run their own small practices as solos (in most cases) even while affiliated with a sponsoring brokerage firm. The industry is truly for entrepreneurs and those who seek career independence while helping others achieve their dreams through the use and/or ownership of real estate.
Lastly, I agree with all of the commenters and think those looking for a JOB should stay out of the brokerage industry instead of suing firms in order to change the IC status to an Employee status. There are plenty of employer-employee career opportunities to choose from if a person is seeking a pay check and a boss.
Since Harry Norman Realtors was bought by Home Services (Uncle Warren Buffett) you do feel that you are Now Always here to Support, Unconditionally The Corporate Ivory Tower and PLEASE, Keep Your Comments to Yourself! You, as an Individual agent must co-tow to the Ideas of The Corporate Beings. IF you Have Anything to say it Better Support COMPLETELY The Top of the Ivory Tower. If WE Were Truly Independent and had NO Fear in our Status, then Corporate would encourage New Ideas without fear for fighting possible adverse actions BY The Ivory Tower Mentality and the Total Control of the Peon’s.
I worked for one of the largest brands. According to attorneys consulted, I would never have had to work again IF I had been an employee because the workplace abuses were egregious and abundant.
Independent status is great if one is really independent, but that was not the case with this national company. The demands were
not in keeping with independent status, yet there were no laws protecting my rights.
You might want to have some legal rights as workers.
Just because some agents picked the wrong “national” company to align themselves with and did not have the guts to change brokerages when they were taken advantage of, why should the rest of the industry pay for their mistakes. If you want someone to take “care” of you whether its a “Corporate” franchise, a corporation doing a 9-5 job, or a rich partner in your private life you will have to pay a price. To get “free” leads or a stable paycheck there is a price….known as “golden handcuffs”. As someone who worked in corporate 9-5 lifestyle, yes I miss the regular paycheck, sick days, paid vacation, paid healthcare, etc. but the advantages of being my own boss and not dealing with corporate BS, rules that made no common sense and the inability to innovate or make recommendations to bad systems…being independent is much more rewarding! If you are unable to change the workplace from within, you leave and find some where else. Lawsuits rarely end up benefiting anyone except the attorneys that filed them.
The independent contractor status of a real estate agent allows an individual to be an entrepreneur. The most professional agents rise to the top. The necessary skill set of business acumen, psychological intuition, dedication to client service, creative writing and marketing, networking, community involvement and awareness, ability to read, write and explain documents creates a very interesting and diverse career that is exciting to a few but misunderstood by many. I have worked in the corporate world. I actually worked for Fortune Magazine in 1971 but I found my passion in selling residential real estate. It would not exist without the self motivation triggered by the independent contractor status. I have sold real estate since 1983 in California and since 1990 in Malibu, Ca. I count myself as one of the most fortunate people in the world.
Definitely independent. Putting a time clock on real estate is completely unrealistic. Has to be a corporate (banks?) angle to this because we definitely pay our share of taxes.
Why to work under a broker, why state can not treat realtors like Insurance agents as indpandance agents. You can be your own boss I of course under strict rules . Brokers takes lot of split away from agents with out much merit