Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

Which party is responsible for ensuring the W-9 form is collected before commission payments?

1. The client

2. The listing broker

3. The cooperating broker

4. The title company

The correct answer is: The listing broker

The listing broker holds the responsibility for ensuring that the W-9 form is collected before commission payments. This form is crucial because it provides the necessary taxpayer identification information for anyone receiving income, such as real estate agents and brokers. By collecting the W-9, the listing broker facilitates compliance with IRS regulations, ensuring proper reporting of commission payments. The other parties in the transaction typically do not have this responsibility. The client may provide necessary information but is not specifically tasked with collecting W-9 forms. The cooperating broker, while involved in the transaction, will generally rely on the listing broker for documentation related to commission payments. Similarly, the title company may handle the disbursement of funds but does not usually oversee the collection of tax information from individuals receiving payment. Thus, the role of the listing broker is pivotal in managing this aspect to ensure that all legal and tax obligations are met.