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Old 10-20-2013, 09:18 AM
 
3,442 posts, read 4,472,559 times
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Quote:
Originally Posted by VickiR View Post
I didn't say the company makes no money. They get a split that is determined between the Realtor and the company.
You are contradicting yourself.

If there is a split between company and realtor then the selling of a house listed by the realtor results in the full split going to the company.

(they get a split from their realtor who is the selling agent and the agent who is the buyers agent).

However, if a buyers realtor from Company A finds a house listed by Company B for the client , company B listing realtor will be taking a cut ( usually half of commission ) and company B will be getting a cut.

Stating there is no difference is false, because as you stated, the Company gets a cut on commissions.
,
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Old 10-20-2013, 09:24 AM
 
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Also, this " independent contractor" talk doesn't impress me.

I have seen roofing companies with a crew of non-English speaking workers declaring that every worker is an " independent contractor " and not an employee.

The day you put up a for sale sign for " White Realty " and your name as the agent, then that same day put up a for sale sign for "Midtown Realty" with your name as the agent , I will believe it.

Just because the IRS doesn't scrutinize " independent contractors" more closely does not make that title any more meaning full than when a roofing contractor used it on his illegal migrant workers.
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Old 10-20-2013, 09:49 AM
 
Location: Martinsville, NJ
6,159 posts, read 10,897,199 times
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Quote:
Originally Posted by Teddy52 View Post
You are contradicting yourself.

If there is a split between company and realtor then the selling of a house listed by the realtor results in the full split going to the company.

(they get a split from their realtor who is the selling agent and the agent who is the buyers agent).

However, if a buyers realtor from Company A finds a house listed by Company B for the client , company B listing realtor will be taking a cut ( usually half of commission ) and company B will be getting a cut.

Stating there is no difference is false, because as you stated, the Company gets a cut on commissions.
,
Are you really not seeing it?

While the COMPANY (also called the brokerage) wants it's agents to sell every property so it can collect it's split on every transaction side, there is no such incentive for an individual agent. The buyer's agent is going to get paid if & when his buyer client buys a house, and he's going to get the fee offered in the MLS (in most cases.) The listing agent is going to get paid if & when he sells his client's property. And if a buyers agent brings the buyer, he's going to pay the fee he offered in the MLS, which is the same no matter the brokerage. In the overwhelming majority of cases, there is simply no financial incentive for an agent to not show his buyer clients all the properties available.
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Old 10-20-2013, 10:20 AM
 
Location: Cary, NC
31,608 posts, read 55,335,524 times
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Quote:
Originally Posted by Teddy52 View Post
Also, this " independent contractor" talk doesn't impress me.

I have seen roofing companies with a crew of non-English speaking workers declaring that every worker is an " independent contractor " and not an employee.

The day you put up a for sale sign for " White Realty " and your name as the agent, then that same day put up a for sale sign for "Midtown Realty" with your name as the agent , I will believe it.

Just because the IRS doesn't scrutinize " independent contractors" more closely does not make that title any more meaning full than when a roofing contractor used it on his illegal migrant workers.
Roofing contractors, among others, often break the law regarding "independent contractors."
But, you are comparing apples and oranges, when comparing roofers and real estate brokerages' arrangements with agents.
Real estate firms have a specific standing with the IRS with "independent contractor" basically blessed as it is handled in real estate brokerage as "Non-Statutory Employee."

"
Statutory Nonemployees




There are three categories of statutory nonemployees: direct sellers, licensed real estate agents, and certain companion sitters. Direct sellers and licensed real estate agents are treated as self-employed for all federal tax purposes, including income and employment taxes, if:
  • Substantially all payments for their services as direct sellers or real estate agents are directly related to sales or other output, rather than to the number of hours worked, and
  • Their services are performed under a written contract providing that they will not be treated as employees for federal tax purposes.
"
Publication 15-A (2013), Employer's Supplemental Tax Guide
.
I specifically, proactively, plan to never have W-2 employees in my firm. "Independent contractor agents" only, or temp labor from a Staffing agency if I need admin.
And, I decided years ago that I would never be an employee again, unless something quite entertaining presented itself. If I had been faced with becoming an employee of a firm due to some reorganization of tax rules, I would have quit real estate, or would have hung my shingle independently much earlier.

I know many agents who are affiliated with more than one brokerage, and have their own brokerages, either out of state or so they can handle property management which their parent firm does not support.
All that is required to affiliate with more than one brokerage is the tacit permission of the managing brokers. It is common.
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Old 10-20-2013, 11:22 AM
 
3,442 posts, read 4,472,559 times
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I have yet to see a "For sale " sign from Realty A bearing a realtors name and a "For Sale " from Realty B bearing that ...........same,,,,,,,,,,realtor's name.

In home construction, it would not be unusual to see a TRUE independent contractor have his plumbing sign next to a house being built by contractor A and that same sign next to a house being built by contractor B.

In fact another stipulation of determining if one is an independent contractor by the IRS is if the " employee" is allowed to be working in dependently for other companies at the same time.

Very few Real Estate companies would allow THEIR agents to have the agent's name on the For Sale sign of a competitor.

Sure, some Real Estate companies "CLAIM" their employees are independent contractors yet want to dictate what business they can and can not be in during their off work hours.

White collar employees are just as devious as construction crews when calling employees.........."independent contractors )

Heck, even some car dealerships are trying to call their salesmen............." independent contractors" to circumvent employee/employer laws pertaining to the IRS.
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Old 10-20-2013, 11:37 AM
 
Location: Cary, NC
31,608 posts, read 55,335,524 times
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Quote:
Originally Posted by Teddy52 View Post
I have yet to see a "For sale " sign from Realty A bearing a realtors name and a "For Sale " from Realty B bearing that ...........same,,,,,,,,,,realtor's name.

In home construction, it would not be unusual to see a TRUE independent contractor have his plumbing sign next to a house being built by contractor A and that same sign next to a house being built by contractor B.

In fact another stipulation of determining if one is an independent contractor by the IRS is if the " employee" is allowed to be working in dependently for other companies at the same time.

Very few Real Estate companies would allow THEIR agents to have the agent's name on the For Sale sign of a competitor.

Sure, some Real Estate companies "CLAIM" their employees are independent contractors yet want to dictate what business they can and can not be in during their off work hours.

White collar employees are just as devious as construction crews when calling employees.........."independent contractors )

Heck, even some car dealerships are trying to call their salesmen............." independent contractors" to circumvent employee/employer laws pertaining to the IRS.

That you haven't seen something does not make it untrue or inapplicable.
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Old 10-20-2013, 12:00 PM
 
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How common is it in North Carolina to see the same real estate agent's name and telephone # on 2 signs of competing Realty firms ?
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Old 10-20-2013, 02:04 PM
 
Location: Needham, MA
6,324 posts, read 9,033,141 times
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Quote:
Originally Posted by Teddy52 View Post
I will bet if you contacted an agent and listed 8 criteria you want in a house, the agent would show you houses from his company that matched 6 out of 8 before they showed you a MLS listing from another company that matched all 8.
I'll take that bet any day of the week. As others have said, there's no motivation for the individual agent to sell an in house listing. Someone also mentioned and I agree with this, that I'd rather sell an existing buyer client someone else's listing rather than one of my own. Whenever I'm a dual agent, one side or the other expects a commission reduction. If I'm just representing one side, it's much more rare that someone asks (not saying they get it in either scenario though ).

Quote:
Originally Posted by Mainer61 View Post
We had a buyer's agent until the appraisal was done. It came in low, The agent looked at me and said, "well, we'll just get another appraisal." I told her if she did that, she could find another buyer. We got the house for the appraised value, but we didn't allow her in to the closing, and never spoke with her again. That's just crooked.
While that probably wouldn't have been the first solution I'd suggest, if the seller refuses to budge on the contract price then another appraisal often solves the problem. Keep in mind an appraisal is just an opinion of value. If you call in 3 appraisers you'll likely get 3 different values and one may even be wildly different from the other two. It's not the end-all, be-all scientific analysis that the public would like to think it is. However, if a low appraisal gives me the opportunity to get my client a lower price, I'm going to go that route before trying anything else.

Quote:
Originally Posted by Teddy52 View Post
You are contradicting yourself.

If there is a split between company and realtor then the selling of a house listed by the realtor results in the full split going to the company.

(they get a split from their realtor who is the selling agent and the agent who is the buyers agent).

However, if a buyers realtor from Company A finds a house listed by Company B for the client , company B listing realtor will be taking a cut ( usually half of commission ) and company B will be getting a cut.
Yes, in the scenario where an in house listing is sold to an in house buyer the brokerage makes more money on that transaction. No one is disputing that. However, what everyone has pointed out to you and you don't seem to understand is that the agent doesn't see a dime of that extra money. So, where is the motivation?

Regardless, if that buyer is already committed to working with the brokerage and is going to buy something and that listing is going to sell to someone in the end the brokerage nets the same amount. So, even at the brokerage level, where is the motivation? The best case scenario for the brokerage and the agent is for a buyer who was not a pre-existing client to come in and buy the listing.

There's just no motivation for the agent or the brokerage to sell an in house listing to a pre-existing client.

Quote:
Originally Posted by Teddy52 View Post
Stating there is no difference is false, because as you stated, the Company gets a cut on commissions.
,
Again, the company gets more money in this single transaction but if the buyer is already committed to work with the brokerage then in the end they're not netting any additional money. It would just be across two transactions.

Quote:
Originally Posted by Teddy52 View Post
Also, this " independent contractor" talk doesn't impress me.

The day you put up a for sale sign for " White Realty " and your name as the agent, then that same day put up a for sale sign for "Midtown Realty" with your name as the agent , I will believe it.

Just because the IRS doesn't scrutinize " independent contractors" more closely does not make that title any more meaning full than when a roofing contractor used it on his illegal migrant workers.
No one here is looking to impress you. The IRS says I'm an independent contractor and I file a Schedule C (self employed person) and I pay taxes on my income like someone who is self employed. So, how am I not self employed. I choose of my own volition to hang my license with a particular brokerage. If I was "fired" or if I chose to leave, there are at least 6 other brokerages in town that would welcome me with open arms.

It's clear that not only do you not understand how real estate commissions work but also you're not familiar with what being an independent contractor is.

Quote:
Originally Posted by Teddy52 View Post
In fact another stipulation of determining if one is an independent contractor by the IRS is if the " employee" is allowed to be working in dependently for other companies at the same time.
I don't think you know what an independent contractor is because I don't see these words anywhere in the IRS's definition. Here it is for your reference:

Independent Contractor Defined

Being able to work for someone else has nothing to do with the IRS definition.
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Old 10-20-2013, 03:18 PM
 
Location: Cary, NC
31,608 posts, read 55,335,524 times
Reputation: 30159
Quote:
Originally Posted by Teddy52 View Post
How common is it in North Carolina to see the same real estate agent's name and telephone # on 2 signs of competing Realty firms ?
I think you can quantify via research, and satisfy whatever burr is under your saddle.
Here is a good place to start:
Welcome To North Carolina Real Estate Commission
After you have contacted every firm in every town, you may have a grasp as to how common it is for an agent to have multiple brokers.
Of course, such an arrangement or statistic is irrelevant in regards to the IRS's "Not-Statutory Employee" status. Affiliating under more than one broker requires permission due to NC Real Estate Commission rules.

The IRS Publication 15-A is definitive regarding "Non-Statutory Employee" status in real estate firms. Yes, Colloquially, we refer to that as "Independent Contractor" status, but it is significantly different from subcontracting to GC's in construction. The broker does not have to allow the agent to hang a license under another broker to maintain the "Non-Statutory Employee" status and relationship.
Publication 15-A (2013), Employer's Supplemental Tax Guide
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Old 10-20-2013, 08:00 PM
 
6,359 posts, read 7,327,369 times
Reputation: 10812
Quote:
Originally Posted by Teddy52 View Post
I have yet to see a "For sale " sign from Realty A bearing a realtors name and a "For Sale " from Realty B bearing that ...........same,,,,,,,,,,realtor's name.

In home construction, it would not be unusual to see a TRUE independent contractor have his plumbing sign next to a house being built by contractor A and that same sign next to a house being built by contractor B.
You seem to be under the mistaken impression that what you believe should be the case actually matters. It doesn't. Nor does it matter what I or anyone else on here might think should be appropriate. The only thing that matters in this situation is the law.

Under federal law, real estate agents are considered to be independent contractors. Now, mind you, people who engage in real estate sales can be treated as employees under a different employment model, but that is usually not the case.

As to why real estate agents don't work for multiple brokerages, that is a matter of law as well--in this case, state law. Many states require that licensed real estate salespersons work under the supervision of a licensed broker. While state laws may vary, Michigan real estate law specifically states: "A salesperson shall be licensed to a broker and shall not be licensed to more than 1 broker at the same time." So that provision in law specifically precludes what you suggest should be the case.
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