Real Estate Agents Not Entitled To Certain Titles

Did you know that nearly all real estate agents are independent contactors, regardless of which brokerage firm they are affiliated with?

Do you know what that means?

Essentially it means that income for the agent must be related to sales, not number of hours worked. It’s not unlike hiring a plumber or an electrician or a painter. They are all independent contractors. It means that the agent is not an “employee” of the company and is affiliated with the firm according to a separate Independent Contractor Agreement.

The distinction has significant implications. An employer is required to withhold money from paychecks for such things as federal income taxes and Social Security on behalf of its employees. Independent contractors, on the other hand, have nothing withheld by their companies. They receive the gross amount of commissions earned and are responsible for paying their own individual tax obligations.

So what about all the real estate agents with titles such as “Vice President (VP)” or “Senior Vice President (SVP)” or “Executive Vice President (EVP)” on their business cards?

According to the State Department, unless an agent is an employee of a company, he/she is prohibited from using any such titles…titles that were previously dolled out to a company’s top producers.

Since the State Department’s opinion was released in April countless stacks of business cards and brochures have been dumped in the trash, and Web sites have been scrubbed clean of titles by agents eager to avoid fines of up to $1,000 per violation.

As the Wall Street Journal reported, New York State is “putting the kibosh on all the fake fancy titles” because, as it turns out, most agents who sell real estate are legally prohibited from holding them.

So if you come across an agent promoting himself or herself as a VP, SVP, or EVP, you may want to advise the agent that they could be fined for using a title he/she is not “entitled” to use.

And then ask yourself, “Shouldn’t the agent have known that?”

Provided courtesy of:

Jay Burnham, Premier Associate

Coldwell Banker Residential and Commercial Brokerage

North Shore, Massachusetts

Website: [click here]