Living On Commission

Mortgage and Lending with Empire Loans

Commissioned sales is one of the few places where you get paid exactly what you're worth. One of my friends really hates that concept. "I could never live on that!" But loan officers have to do it all the time.

The most successful people I know love being on commission! They love being able to give themselves a raise just by working harder. Most people need a little help learning how to budget, and how to put away money for taxes and infrequent but important expenses.

So here's the rule: Never plan to spend more than half of any paycheck. You can have all kinds of fancy formulas but that's it. You have to assume that at least a quarter and maybe a third will go directly to the government for taxes. You should be putting at least 10% away for savings and investment and 5% for surprises is not unrealistic.

When I took over a large real estate office a few years ago I found out that one of my new Realtors was going through bankruptcy proceedings. I knew she a sold a lot of real estate and I couldn't figure out how she got in that situation. One evening over coffee she told me about being a rookie with another company. She fell into a land deal and made the single largest sale her company had ever made.

Within six months she received a huge six-figure commission. Within two years she was in debt over her head. The problem? She spent it all! She started borrowing trying to pay her taxes. She was so stressed out over the tax situation that she didn't sell any more real estate for the next year.

Don't let that happen to you. Loan officers aren't that different from Realtors or other commissioned sales people. A little planning in advance for regular and predictable expenses and a slush fund for surprises and you'll be covered!



Reprinted with permission.
Copyrights 1992-2006 Linda Brakeall, Phoenix Seminars
Speaker, Trainer & Consultant

Comments (5)

Tom Burris
NMLS# 335055 - Baton Rouge, LA
Texas/Louisiana Mortgage Pro - 13 YRS Experience

my wife hates 100% commission.

i LOVE 100% commission.


Jan 29, 2007 01:41 AM
Jim & Maria Hart
Brand Name Real Estate - Charleston, SC
Charleston, SC Real Estate
You have to make sure that you don't live beyond your means.  So many get into real estate thinking that they'll be rich right off the bat, and they usually end up out of the business in just a year or so, and in debt over their heads.  It's only "glamorous" AFTER you've put in your time and done lots of work!
Jan 29, 2007 05:30 AM
Ann Guy
NA - Allentown, PA

straight commission is like a roller coaster-up & down- exciting! If you have money set aside, it will get you through the down's without the stress 

Jan 29, 2007 07:41 AM
Cynthia Sloop
Community Association Manager - Indianapolis, IN
I agree with all the above.  It has been a tough 1st year for me.  I have been commission pay before and understand the saving for taxes and dry times.
Jan 29, 2007 10:27 AM
Kimberlee Leto
Bourdeau Financial - Latham, NY
I have to agree, there are pros and cons with being salaried as well, like the hourly is all you get.  I've had commission jobs before, no biggie now that while I'm getting business going, my husband has dependable weekly income.  I couldn't do this with that security.  Still we must keep in mind regardless, there are no guarantees in life.  Just my thoughts.
Jan 31, 2007 02:21 AM