PSI Virginia Real Estate Practice Exam

Which of the following best defines an independent contractor in real estate?

1. Someone who can act as a full agent for all clients

2. A licensee acting under a mutual agreement with clients

3. A licensee who enters into a brokerage agreement specifically stating they are not acting as an agent

4. An employee of a brokerage firm

The correct answer is: A licensee who enters into a brokerage agreement specifically stating they are not acting as an agent

An independent contractor in real estate is best defined as a licensee who enters into a brokerage agreement specifically stating they are not acting as an agent. This distinction is crucial because independent contractors typically operate under a particular set of guidelines that allow them more autonomy compared to traditional agents who may be classified as employees. In this arrangement, the independent contractor maintains control over how they conduct their business, including marketing and operations, while the brokerage provides the necessary support and framework for real estate transactions. This relationship is often established through a clear agreement, which delineates the expectations and responsibilities of both parties while clarifying that the contractor is not acting in an agency capacity. Other options may describe various types of relationships within real estate, but they do not capture the essence of the independent contractor status. For instance, someone who acts as a full agent may not embody the independence associated with the contractor model. Similarly, a licensee acting under a mutual agreement implies a standard agent-client relationship rather than the distinct framework of an independent contractor. An employee of a brokerage firm typically operates under much closer supervision and control, contrasting with the independence that characterizes an independent contractor's role.