Are you considering getting into the field of real estate? Some newly licensed agents come into the business with the misconception that the minute your offer gets accepted, you get a big fat paycheck…
It can be 30-45 days after acceptance of the offer until you receive the commission check. The commission comes after the close of escrow, and is paid through the escrow company. Both the listing agent and the selling agent are paid from the seller, as agreed in the residential purchase agreement. On average the commissions are 5-6 percent of the selling price, which is usually split evenly between the listing and selling agent. However, sometimes the split is different and the listing agent or selling agent may be taking home more, which is all specified in the contract. After all contingencies have been lifted and escrow has been closed, the escrow company will send the agents check to their office.
Another misconception is that all agents receive 100% of their commissions all the time.
Most agents, working in a real estate company, are put on a commission split. Most splits are somewhere along the lines of 70% to the agent 30% to the company. Most companies also have a cap that once the agent has paid a certain amount of the money to the company within their working year (that starts the day they joined the company and resets every year on that date); they get to keep 100% of their commissions. For example, at the real estate company I am working at, once you have paid $23,000 in commission dollars to the company, you are considered at full cap. This means you get to keep 100% of your commissions.
However, there are also other factors that come into play. If a client was referred to an agent by another agent, that agent may be entitled to a referral fees. There is no set limit for referral fees, but is typically 15%-20% of the commission. Also, if the agent...