At Realty Empire, understanding the process and requirements for W-9 forms and referrals is essential for smooth and compliant business operations. A W-9 form is an Internal Revenue Service (IRS) document used to collect correct taxpayer identification number (TIN) information for individuals or entities engaged in business activities that will generate income. As a real estate agent, whenever you’re due to receive a commission or referral fee from another brokerage or from services rendered to clients, you’ll be required to fill out a W-9 form. This form will be kept on file by the party that will pay you, as they are responsible for reporting the payments to the IRS through a 1099-MISC form come tax time.
Referrals, on the other hand, are a common practice within the real estate industry, in which an agent who refers a client to another agent (perhaps due to expertise in a particular area or location) receives a referral fee upon the successful closing of a transaction. At our agency, referral agreements are established in writing before the referred transaction begins, clearly laying out the terms and the percentage of the commission to be paid upon closing. It’s important to note that referral fees are also reportable income and will be documented via a 1099-MISC form using the information from your submitted W-9. Realty Empire holds professionalism and adherence to ethical standards in the highest regard, ensuring all such transactions are conducted transparently and in full compliance with IRS regulations.
