What is an independent contractor in real estate?

An independent contractor in real estate is someone who operates on a contract basis to perform specific services for a brokerage. This arrangement allows the independent contractor to maintain a level of autonomy in how they conduct their business. They are not considered employees of the brokerage, meaning they are responsible for their own taxes, insurance, and fulfilling their obligations as outlined in the contract.

This classification is significant in real estate because it affects how agents manage their work schedules, business expenses, and commissions. Independent contractors typically have the freedom to choose when and how much they work, which distinguishes them from traditional employees who must adhere to a set schedule and company protocols.

In contrast, the other choices describe different roles or arrangements that do not align with the definition of an independent contractor. A person operating under a broker's supervision would typically be considered an employee or an agent working directly under the broker's authority. Meanwhile, being an entirely freelance agent suggests a lack of affiliation with a brokerage, which does not accurately capture the contractual nature of independent contractors in real estate. Lastly, a full-time employee of a real estate firm is clearly not an independent contractor, as they work under the employment model rather than a contract-based arrangement.