Should You Incorporate Your Real Estate Business?

By
Real Estate Agent with Coldwell Banker Dynasty

  I went to a real estate seminar last week and the presenter hit me with something that I have not thought about. He said that "as real estate agents, we are independent contractors, and as such be personally liable in a lawsuit". The presenter ask us to think of incorporating or doing a LLC. Since he is not a lawyer or sell these services there is no benefit for him recommending it. So this really made me think if this would be a good step to protect ourselves.

Comments (8)

Randy Ostrander
Lake and Lodge Realty LLC - Big Rapids, MI
Real Estate Broker, Serving Big Rapids and West Central MI

First thing I did when I opened my office was start a LLC. Anything we can do to protect ourselves is a good idea.

Nov 22, 2010 10:51 AM
Dwight Carson
Re/Max United Realty - Lillington, NC

Definitely incorporate.  Also talk to your cpa about the advantages of subchapter S and the loophole that allows occasional withdrawals without liability for social security witholdings.  Sure makes taxes easier also.  No more estimated taxes.

Nov 22, 2010 10:52 AM
Claude Cross
Homes By Cross, Inc. - Charlotte, NC
Charlotte NC Homes For Sale

Are you kidding ? Don't take another breath without doing it.

Nov 22, 2010 12:01 PM
Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Song...

I am incorporated ... take to a lawyer you trust and a CPA to get the info for your state/

Featured in the Group :Whacked!!!"

Nov 22, 2010 01:18 PM
Doyle Beekman
The Beekman Group-Keller Williams, Austin - Cedar Park, TX
CPA Broker CLHMS ABR CRS CNE

Take it from a CPA....talk to a CPA!

Nov 22, 2010 03:13 PM
Tom Branch
RE/MAX Dallas Suburbs - Plano, TX
Broker, CDPE, SFR, ACRE, Plano TX Ambassador

Forming an LLC or a corporation has pros and cons.

We use our LLC for pay purposes only. While my LLC is also a licensed broker (I sponsor the LLC Broker License), we do not conduct brokerage activity using its license number. We take all commissions into the LLC.

I have two agents on my team who are sponsored by the main brokerage. To comply with Texas rules, I have a written agreement with the broker to pay her agents. I take care of their 1099s as well.

What you have to be careful with is E&O insurance. My LLC does not carry insurance but the main brokerage does. We conduct all brokerage activities using the main brokerage license number as there was concern that E&O might not pass through to a separate entity.

Tom

 

Nov 23, 2010 10:30 AM
Team Honeycutt
Allen Tate - Concord, NC

Do what you have to to protect yourself - incorporate!

Nov 23, 2010 10:50 PM
Temple Callahan
Connect Real Estate - REALTOR / BROKER - Ventura, CA
Search Ventura County Homes For Sale CA

Wow, great comments...  Great post!  Very thought provoking!  So, with an LLC, is that the same as a regular Corporation where it is not reliant on the individual's own personal credit / financials?

Jul 19, 2011 12:42 PM