Employee Vs Independent Contractor Agents

Almost all real estate agents are now “independent contractors” rather than employees of a Licensed Broker. All agents and brokers must be licensed to conduct business as a real estate agent or broker. Typically they are licensed at the state level that is operated under state law by a Real Estate Commission. In Georgia it is the Georgia Real Estate Commission (GREC) and it is the body that guides how real estate business is conducted and also handles complaints filed by clients, customers, as well as agents and brokers.
All agents must be associated / affiliated with a Broker who is responsible for the agents business behavior as they conduct business. 

In the past the employer / employee model was the usual business structure in place which defined the relationship between broker and agent. The business model looked like most other business companies in the structure and pay plans as well as benefits and to both the employer and employees. Over the years as the business of real estate evolved and became much more complicated and, business conditions varied widely from location to location the companies in the business of real estate began adopting the “independent contractor” business model. The essence of the model is that the real estate agent is a small business person and operates their real estate practice as an independent operator, who’s licensed is “held” by a Broker. The relationship between agent and broker can be

This model benefits agents, clients and customers involved in real estate transactions since it allows for agents to respond much more quickly to market changes, trends, and business conditions. It also allows agents to substantially differentiate the level and the type of service they provide to their client and customer base. Which makes those agents attuned to their market much more valuable to their respective client and customer base.

In an industry where the normal annual turnover rate is close to 50% it is imperative that clients and customers carefully look at the agent’s experience, client & customer references, and success track record as well as market knowledge prior to selecting an agent to work with. In specialty markets such as waterfront, luxury, lots and land the selection process becomes even more important due to the increased knowledge requirements. When your market is a 1000 feet deep and 700 miles long it takes many many years of dedicated effort to become an “expert” in Lake Lanier properties!