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Real estate jobs and commission taxes questions?

I am in the process of making a career change to another job. I currently work in retail. I have not had an actual offer for the job yet, but I've had over 2 hours of interview time with the 1st and 2nd interview combined. They are in the process of running a background check so that's leading me to believe that they might be serious in making me an offer of employment. The job is working as a sales representative for a new home building company. The commision percentage on a sale is 2%, but there are no fees or anything that are taken out of that percentage by the company. The company gaurantees a minimum monthly check of $3500 which they call a draw account. And if any money is owed to the draw account commissions would go towards that. So if I went my first two months without selling a home my draw account would be at $7000. And my third month I closed on homes totaling commissions of $9000. I would pay the $7000 that I owed back in the draw account and be left with $2000. But they guarantee a monthly check of $3500 so my draw account would be at $1500. From what I've read this type of pay is uncommon in the real estate industry. I like it because starting out I probably wouldnt be raking in the commissions right away, so I'd still have a steady paycheck coming in the first few months. The area manager I interviewed with has told me up front in the interviews that it takes there sales reps about 6-8 months to really get going. I have no real problems with working my tail off learning the new trade though. My questions are: 1) What are your opinions on the position as a whole? 2) I currently live in Wisconsin and I am wondering what my final take home pay would be out of the $3500/month. I know it would probably be a higher percentage than the checks I am getting now because it's mroe money, but I can't seem to find exactly what it would be. I'm looking to figure out what I would walk away with after all social security, medicare, federal taxes and state taxes just figuring the $3500/month. Oh and the company I'm interviewing with is called William Ryan Homes so if anyone has any comments on the company that would be welcome as well. Thanks, John

Public Comments

1. Look up the income tax rates for your state. You can find it online. My concern would be what are they going to do to you if you never sell anything? I am sure there is a provision in the contract if you never earn enough commissions to pay them back. I am expecting that you have to pay them back in full if you quit or are fired. Make sure you understand exactly what you are agreeing to have happen and that you are OK with that.
2. My first question is: What happens if you don't make any sales and you just keep drawing from the draw account every month? It seems like they would kind of have you over a barrel. Can they demand that back full and payable at some time? What if you ran up a big draw account and then found a better job elsewhere? It seems like you're trapping yourself there for quite a while until that draw account is paid down. Just to break even with the draw account, at 2%, you would have to close on $175,000 worth of sales each month. Is that feasible? From what I've seen on their website, that's about the average price of their homes in the Milwaukee area. But, how many are there available to sell and how many people are you competing with (other sales people) to make those sales? At $3500 a month, that's $42,000 a year. So, you're probably in the 28% tax bracket. I don't know what you pay in state taxes. But, let's say the entire deduction is 40%, when you figure in social security, disability, state taxes, etc. That's $25,200 a year or $2100 a month. They look like a good company and they have locations all over the US. If it looks like something you think you could excel at, go for it. Just make sure you find out what happens if you leave the company and still owe them money.