Independent Contractor status is defined as a person or business who performs services for another person under an express or implied agreement and who is not subject to the other's control, or right to control, the manner and means of performing the services; not as an employee.

What is amazing is how many Realtors, who are independent contractors, are influenced by the controls of others, specifically in the world of joint ventures.

I was recently made aware of a case where a Realtor referred a customer of theirs to its broker’s joint venture title partner.  This was allegedly done without providing the purchaser with other names of title companies to check fees.  Well, you can imagine what happened next, the purchasers came to find out AFTER settlement, that they actually overpaid their settlement fees by a significant margin and they filed a lawsuit against both the broker and the Realtor. Again, this was the joint venture partner of an independent contractor.  

I was asked recently if I would match the fees of a title company who was a joint venture with a local broker.  I was provided the settlement sheet to compare fees and to better those fees by charging less.  My reply was that I would be happy to charge my regular rates which were $300 LESS than the affiliate without ANY discounts necessary.  When this news was reported back to the title company, they then applied a $300 discount to their fees to match mine!  WOW! What about the other clients that didn’t shop, were they also provided that same discount from the higher priced joint venture affiliate?

Although these joint ventures might funnel money back through the venture to the originating company, it is the customer that is paying more.  What frightens me is the total disregard in the industry for the client/customer. The focus is on the financial growth and stability of the giants, not on the consumer that is supposed to be benefitting from the “one-stop” shop.

If you happen to shop for fees, please ask me for my flier which suggests “shopping for fees,” I am happy to disclose what my fees are and if I am higher, shame on me; if the joint venture partner is higher, then shame on them.  That is not only bad business, but it also opens the door for future litigation for both the independent contractor Realtor and the broker who encouraged (or required, with the carrot of future business referrals or industry perks) the use of the joint venture partner.

Should you need any assistance in a real estate matter, please do not hesitate to contact us here at Confidence Title 301-740-1880.