Choosing a career in real estate is a popular one among many professionals across the country, and for good reason. It provides agents with a flexible schedule, the opportunity to interact with all types of people, and offers the chance to really make a sizable income.
Speaking of income, many newbies in this realm may be wondering exactly how real estate agents get paid. Basically, agents who have their real estate license in Nevada are paid when a sales transaction is complete. That means that even if an agent has worked with a potential client for a while, they won’t be paid if the transaction does not go through.
Instead, real estate agents earn a commission based on the sale price of the property in question and they get a specific commission after the transaction is settled.
Commissions can be negotiated between agents and their clients, but typical commissions are 6% of the sales price of a home.
The commission is typically paid by the seller, though there are many cases where this doesn’t happen, and other arrangements for payment are made. However, typically the seller is the one paying the listing agent a commission percentage.
That commission is then split between the listing and buyer agent. Sometimes it can be split down the middle, while other times, it can be negotiated to split the commission unevenly. For instance, rather than both parties collecting 3 percent of the commission, the listing agent can be paid 2.5 percent while the buyer agent can be paid 3.5 percent.
After the commission has been paid, the agent will then have to split their commission with their brokerage. The percentage split will depend on the brokerage, and what type of deal is made between the brokerage and the agent. It’s typical for commissions to have 80/20 splits, whereby 80 percent is kept by the agent, and the other 20 percent goes to the brokerage.
Any money collected will then be subject to taxation, which agents will need to take care of with the IRS.
While there are certainly a lot of hoops to go through by the time an agent collects their final paycheck, there is a great deal of potential to make a lot of money as a real estate agent. If you are interested in pursuing a career in real estate, contact Key Realty School today to begin your journey to a real estate license in Nevada.