What primarily differentiates an independent contractor from an employee in real estate?

The primary distinction between an independent contractor and an employee in real estate centers on the emphasis on results rather than the methods used to achieve them. Independent contractors are generally hired to complete a specific task or project and are free to determine how they will accomplish that task. They operate with a high degree of autonomy, meaning they can choose their own work hours, strategies, and methodologies, provided they meet the agreed-upon goals or results.

This contrasts with employees, who typically have defined roles, supervised work methods, and often follow specific protocols set by their employer. The employer has more control over how the work is done, which shapes the overall work environment and expectations for employees.

This focus on results allows independent contractors more flexibility in their operations, making them a popular choice in the real estate sector, where agents often work on commission and their success is measurable by their sales results rather than the processes they use to achieve those results.

Other aspects like pay structure can highlight differences, but they are not the defining factor; similarly, while tax obligations and the method of work also contribute to distinguishing the two classifications, the crux of the separation lies in how they approach the work and the level of control exercised.