TLof A CH. 15

What is first and foremost to the broker in the independent contractor agreement?

A duty to supervise his or her licensees.

When a broker wants to sponsor a new salesperson, what form will the salesperson sign?

An independent contractor agreement

What are the three common-law categories that determine the level of control an employer has?

Behavioral, financial, type of relationship.

Which of the following must a broker legally provide to an employee?

Disability insurance.

Under an independent contractor agreement, which section discusses procedures and responsibilities of the agent and broker if there is a complaint?

Disputes and litigation

What are agreements between brokers and clients called?

Employment Contracts

Which of these is not a way that a broker would enter into an employment agreement with clients?

Employment contract agreement.

If a salesperson is classified as an employee, what must the broker withhold from their wages?

Federal income taxState income taxSocial Security taxMedicare tax

What are 2 benefits to being an independent contractor?

Freedom and flexibility

What are the 4 requirements for a judge to hear a case regarding commission not being paid by a client?

Have a written agreement. The agreement must be signed by at least the party to pay the commission. Broker must show he/she had an active license at the time of the transaction. The buyer was told at the time of making the offer that he or she should have a title search and/or a title insurance policy.

Which of these statements about an independent contractor is true?

He or she is paid commission on all sales

What are the 3 ways a broker enters into an employment contract with a principal?

Listing/Landlord AgreementBuyer/Tenant AgreementProperty Management Agreement

What 2 topics do all broker and principal contracts discuss?

Terms of Employment and Compensation

What are two components of all broker and principal agreements?

Terms of employment and issues of compensation.

What type of attitude should a salesperson have when interviewing a broker?

That it's up to the salesperson to decide if a broker is worthy of his or her services. Also, the salesperson needs to remember that choosing a broker is a very important decision.

Why is keeping easy to find records of the agreement a good idea for both the broker and licensee?

The agreement will need to be provided to the TREC board when the licensee applies. The information will also include the licensee's social security numbers, so should be in a safe place. It is especially important for the licensee to have easy access to the agreement if any conflict occurs between the licensee and broker. The agreement contents should clear up most issues.

If a client fails to pay a commission, there are four things that need to be in place for a judge to hear a case. Which is not one of those 4?

The broker must have a verbal agreement between the client and broker.

What is the main difference between an employee and an independent contractor?

The main difference between the 2 is an issue of control, as established by income tax laws.

What are the conditions of the IRS safe harbor test?

The person must be a properly licensed real estate agent.Gross income from all output must be based on production and not on hours worked.A written agreement must exist between the independent contractor and the broker stating that the contractor will not be treated as an employee for income tax purposes.

What section of an independent contractor agreement gives a licensee the ability to represent the broker and enter into agreements with clients?

The section discussing the Associate's authority.

A salesperson should evaluate a broker based on

The training available and the opportunities available.

What are some factors a salesperson should consider when choosing a brokerage to work with?

The type of person he/she works well withType of office environment preferredDoes the brokerage have a nicely designed website?

What can a broker require of his independent contractors?

They must have a signed a written work agreement.

Why is it especially important for licensees to be clear on conditions for termination of an independent contractor agreement?

They need to know the procedures for handling outstanding commissions at the time of termination.

What are 4 negotiating factors an agent should consider when deciding on a brokerage and agreeing to a contract?

Training and supportCommission scheduleWho answers the phoneMiscellaneous benefits

When is a broker required to provide a Form 1099-MISC to the IRS?

When an independent contractor earns more than $600 in a calendar year.

After training, a broker will be available to a new salesperson

as much as possible.

Two major benefits of being an independent contractor are

freedom and flexibility

Property management agreements occur

when an owner hires a broker to manage a property.