Real estate salespeople—called real estate agents in some states—who are paid by commission only qualify as statutory ICs if they sign an IC agreement. (See Federal Taxes and the IRS Rules for more about statutory ICs.)
This agreement provides that the salesperson will be paid by commission only and will be responsible for all expenses incurred in showing and selling real estate including travel and other expenses involved in showing properties.
Most states require that real estate salespeople work for a licensed real estate broker who is responsible for their actions. The broker usually maintains a real estate office and has several salespeople working for him or her. The broker provides clerical and other support staff, while the salespeople are required to be at the office at certain hours to field customer inquiries. The agreement on the CD-ROM provides for this type of arrangement and requires the salesperson to agree upon a schedule of times when the salesperson must be in the office. The schedule doesn’t have to be set forth in the agreement.
Real estate salespeople are required to be licensed in most states. Include the state and date of issuance of the salesperson’s license on the agreement.
Since real estate salespeople usually travel by car to and from properties, it’s important that they have car insurance. This is required in the agreement. The salesperson also agrees to indemnify you—that is, repay you—if he or she gets into an accident and the victim sues you.