Chapter 5
The Salesperson

Salesperson Personnel Issues

*   Independent contractor issues

*   Salesperson contract

*   Recruiting

*   Selection

Independent Contractor (IC) Status

*   Advantages

*   Avoid paying FICA, unemployment, and workman's compensation

*   Avoid paying health benefits

*   Less bookkeeping required

*   Disadvantages

*   Status is unclear--sometimes treated as employee

*   Lack of as much control as an employee

*   The way the associate acts can determine the status, not just the contract--must act in accordance with the IRS definition

IRS Requirements

*   Written agreement as to status

*   IC must have absolute control over hours worked

*   IC must provide broker with written information concerning estimated income tax payments and self-employment tax (SS)

*   90% of income must be related to sales rather than actual hours worked.

*   Broker must file IRS 1099 Misc. Income for regarding payments to the IC

Do's and Don'ts Regarding IC Associates

*   Broker may employ IC to perform specific job (sales, listing, appraising) but cannot be overly specific about how the job is done.

*   Broker may not require that the IC do specific activities at specific times such as

*   Open houses

*   Floor time

*   Office time

*   Wearing of "career apparel"

IC May Not Receive Benefits Which Are Reserved for Employees:

*   Group insurance, if any part is paid by the employer

*   Pension plans funded by firm

*   Withholding of FICA or Income taxes

*   Firm cannot contribute to help pay some of the IC's FICA (employer's part)

*   Automobile

*   Business phone at home

*   License fees and professional dues

Allowable Employer Requirements of ICs

*   Maintain auto, health, and liability insurance.

*   Require memberships in NAR

Firm May Provide the Following to the IC

*   Education

*   Office space

*   Office telephone

*   Secretarial help

*   Firm's signs, cards, forms, etc.

Review of Sample Contract (Figure 5-1, pp. 101-103)

*   Job function

*   Compensation

*   Ethical conduct

*   Liability

*   IC status

*   Disclosure of information to IRS, licensing board, etc.

*   Termination of employment

Other Issues

*   Insurance

*   Competition after leaving firm

*   Compensation for training

Personnel Selection

*   Models of personnel selection

*   Traditional

*   Informed

Necessary Qualifications

*   Personality and desire necessary for success

*   Strong interest in real estate

*   Awareness of the "facts of life" of real estate sales work

*   Personal stability, motivation for success

*   Specific additional features

*   License

*   Ability to support self and dependents until commissions earned

*   Automobile


*   Sources

*   Within the firm

*   Other real estate firms

*   Universities, colleges, and schools

*   Other business firms

*   Career nights

*   Personal contacts

*   Personnel agencies

*   Company owned real estate school

*   Advantages of each

*   Disadvantages of each

Job descriptions

*   Should describe position accurately including the broker's expectations

*   Salesperson

*   Sales manager

*   Secretarial


*   Education

*   Employment history

*   Criminal history

*   References

*   Evaluation

Investigation into past

*   Criminal record

*   Previous employers

*   References

*   Credit reports