Okay experienced RE pros, I have an interesting question for you. I'm an "aspiring" agent I guess you could say, although my current profession is Internet Marketing/Consulting. I do A LOT of interactive custom listing websites w/ virtual tours, online video etc for FSBO's and select agents in my area. I'm not an agent yet but I know a helluva lot about marketing real estate.

So here's my scenario... Let's say I am a newly licensed Real Estate Agent with a hot $900k former FSBO ready to list, but I do NOT have an agreement in place with ANY Brokers. I do, however, have an experienced Realtor that has agreed to work with me on a listing. For simplicity, let's assume that this other agent is with Re/Max - who, as I understand it, typically pays for all their own expenses but keeps 100% of their commissions. This experienced Realtor has agreed to handle all of the things that I do not have experience with (nor do I want to do), and I will handle all of the marketing aspects of the property. We agree to split the commission 50/50. The INDEPENDENT CONTRACTOR AGREEMENT can be drawn up between myself and the Broker FOR THAT PARTICULAR PROPERTY ONLY so long as the broker agrees to it, right? And I'm quite confident that $$ written into the deal would help the Broker more readily agree to it, otherwise I take the listing somewhere else.

I understand that the "traditional" Broker-Realtor relationship has been that the Realtor is an INDEPENDENT CONTRACTOR for the Broker, typically over a longer period of time (1-3 years). ALL deals brought forth by the Agent is done as an INDEPENDENT CONTRACTOR doing business under that Broker. I know that by law, the agent can only be paid by the Broker of record, and the Broker of record is the only one that can be paid by the seller. I am looking to get a much bigger piece of the action (since I got the listing) but only on a property by property basis. I am not interested in a long term deal with just ONE Broker.

The listing would be under the experienced Agent's name, not mine. I would be a "free agent" entitled to 50% of the deal upon sale.

Although it bucks what the "traditional" Broker-Agent relationship has historically been, I don't see a problem with it LEGALLY so long as the Broker agrees to it.

I hope this makes sense, and would appreciate any feedback...
-RB

You will have to check with an attorney in your area to see if you COULD set this up and even if it's LEGAL or not.

Referrals are generally allowed only from agent to agent.Since you are not an agent you would not fall under that category.In my state we ar enot allowed to give non-agents/brokers refferal fees.

I can't say for each person you bring me I will give you 500 dollars,it's not allowed.

50 percent is really steep and you doing the marketing side of things wouldn't sit well from a broker's liability standpoint.

Housevalues and others still get fees so you would need to check how they do it.I am sure there is probably a way to get around anything if you have enough money and attorneys to draw up the legal paperwork.

no legal advice

Uuuuuuhhhhhhhhhh . . NO.

In EVERY state, an agent must be licensed with a broker in order to receive compensation for the real estate transaction. Licensing requires more than just an agreement with the broker. (An individual agent can be their own broker but that requires fulfilling the requirements for a broker's license).

The reason? The broker is legally responsible for the salesperson and their actions. No broker is going to assume that liability on a transaction by transaction basis.

There is no such thing as an "independent agent". Being an "independent contractor" merely deals with the issue of whether or not taxes are withhold from commission checks.

So, find a broker, license with them and proceed.

Actually that's not true re: Independent Contractor. I've been and IE in one way or another for the better part of 2 decades in all kinds of industries, and believe me the IE/company relationship status goes far beyond taxes. IE's assume as much risk as the employing company does, hence the reason why you're starting to see the NAR recommend General Liability policies for Realtors in addition to E&O insurance. The risk for a broker on a transaction basis is no more or less than a full time basis - it's the same contract just a different timeframe.

50% for the marketing side is actually quite fair (IMHO). I've seen a HUGE disconnect between what owners "expect" from Agents to market their home and what those Agents are will to do -- even when the cost for marketing services are deferred until the property sells. The MLS is more & more of a Red Herring (along with Broker Reciprocity), as most of them license out the information in some capacity so that Joe Public can find home for sale listings relatively easy with a simple Google search. No password and no Realtor required. Newspaper and Real Estate rags are usually a HUGE waste of money for the Agent, so the Internet continues to be THE place where buyers go to search for homes. Even the NAR states that fact. However, the Internet is so much more than just Realtor.com.

Don't take my comments the wrong way - please - I'm simply stating what I see from the outside in. I'm sure it's a frequent occurance where any Realtor with an aging listing finds themselves doing a dance while answering the question "what have you done for me lately?" from the seller, right? 9 times out of 10 it comes down to the marketing. Again, all IMHO.

Ronny, the way you desribed it, I don't see a problem. You are a licensed agent, working for another agent as an assistant or what have you, and are eligible to receive referals or commissions, and since the other agent is a member of the MLS, there are no problems on that end. (the managing broker might not even have to get involved, but that depends on their office policy regarding assistants)
What the agent wants to pay you, is between you and him.

If you are a licensed real estate agent AND active under a broker, then your plan is acceptable if you can find a broker to do it.

If you are not licensed and active under a broker, it is illegal.

As for your plan, I don't believe any successful brokers will be acceptable to it unless you license is active with their firm and lke Pike says, have an agreement with a certain agent.

You'll have to hang your license with a broker until you get your own broker license. The broker you affiliate with is most probably going to take a cut of your deals, perhaps capping out at some point. Once you affiliate with a broker under an arrangement to your liking, then you could refer clients out to other brokers using a referral agreement at whatever percentages are worked out between everyone. There would be no need for you to jump from broker to broker. (And don't forget, if you did try to jump from broker to broker, listings often stay with the broker.)

Ronny, I think you're confusing professional sports with real estate. There is no "free agent" relationship that I am aware of in real estate licensing. LOLOL

If you are licensed, and you want to jump from broker to broker, for whatever reason, that is your prerogative. However, if you perform activities that require a real estate license, and do so without hanging your license with a broker, you will get into some serious trouble, and won't be licensed for very long.

As a licensed agent, what would you stand to gain by constantly jumping around from broker to broker? It sounds as though you are hoping to create a situation that would in fact violate the RE licensing laws.

Wow, this post is shockingly wrong.

Licensed agents do not work for other agents, they hang their license with and are supervised by a BROKER. Office policy is not the determining factor. State law determines what is acceptable for all matters related to real estate licensing and broker-agent relationships.

"Wow, this post is shockingly wrong.
Licensed agents do not work for other agents; they hang their license with and are supervised by a BROKER. Office policy is not the determining factor."

Ronny, to receive compensation, you obviously have to hang your license with an Employing Broker. However, as I stated before, a Licensee/agent can share commissions with a licensed assistant/Agent.
Office policy might require you to be a REALTOR instead of just an Agent and also spell out assistant’s/Agent compensation agreements.

Yes Ericka, any employing broker where Ronny hangs his license or any agent can pay him, and agents do have assistants they employ.
P.s. in my state every agent is a broker, and with 2 years experience (and a 24 hr class), anyone can be a managing broker.
I have been a broker since 1990, I don't know about Erickas qualifications.

Wait up...hold on. Where in his post did he say he was a licensed agent? I think he stated that he was not yet licensed. Legally I do not think the listing agent could split his commission with him. Now if he happened to do it under the table that would be another story. But then again you could get in serious trouble if anyone found out. Also it is not ethical

I hate to say it, but it really seems as if ronnie has a bad misconception of the real estate industry.

Ronnie, if I were you I would call your local Real Estate Commission. A lot of your misconceptions will go away once you proceed in getting your license. There are MANY laws governing Real Estate, and to be honest I can see several that would be broken in your plan.

I wish you the best o luck.

DelCidsRealty, this is what Ronny said:
"So here's my scenario... Let's say I am a newly licensed Real Estate Agent.."

In my state, even as a NON-LICENSED Assistant, the assistant can get paid from the commission of the agent, how else are assistants paid?

Pikes Peak ---

Your broker statute and mine (Idaho's) are very similar (except for the individual broker status issue). I believe that, in Colorado, a non-licensed assistant cannot be paid on the basis of commissions generated because that would be commission-splitting which is a big "No-No".

Instead, they must be compensated on an hourly basis or a piece work basis. Compensation cannot be related to commissions.

Not as cut and dry here.

This is what our RE Commission Position is regarding compensation agreements, …:
CP-10…
5. That an employing broker pays their licensed or unlicensed employees pursuant to an oral or written employment contract.
Therefore, the contractual relationship between employing and employed brokers, as well as the office policy manual, should adequately cover the compensation of employed brokers.

CP-20 Commission Position Statement On Personal Assistants, says:
……
Licensees should not share commissions with unlicensed assistants. Although this may not technically be a violation of the licensing act if the activity is not one which requires a license, the temptation to “cross over” into the area of negotiating and other prohibited practices is greatly increased where compensation is based on the success of the transaction.

If brokers develop adequate policies for the use of assistants and routine procedures for monitoring their activities, the assistant can serve as a valuable tool in the success of the transaction. As with any other activity involving the delegation of an act to another, the freedom and convenience afforded the broker in allowing the use of assistants carries with it certain responsibilities for that person’s actions.......

I think, good written office policies become very important in making sure that no laws are broken when hiring a non-licensee, contrary to Erickas opinion.

p.s. CP-2 addresses “Commission Position On Referral Fees And Advertising Services”, which is another subject.