Glossary
What Is a Real Estate Commission Split?
A commission split is the division of a real estate transaction's commission between the brokerage and the individual agent. When an agent closes a deal, they don't keep the full commission — a portion goes to their brokerage.
Commission splits are one of the most important factors agents consider when choosing a brokerage. They directly impact how much an agent takes home from each transaction.
How commission splits work
1. A home sells and generates a commission (historically 5-6% of sale price, split between buyer's and seller's agents) 2. Each agent's share goes to their brokerage first 3. The brokerage takes its cut based on the split agreement 4. The agent receives the remainder
Common split structures
- **Percentage split:** Agent keeps 70%, brokerage keeps 30% (varies widely) - **Graduated split:** Starts at 60/40, improves as the agent hits production milestones - **Cap model:** Brokerage takes a split until the agent hits a dollar cap (e.g., $16K/year), then the agent keeps 100% - **Flat fee:** Agent pays a fixed monthly or per-transaction fee and keeps 100% of commissions
Post-NAR settlement changes
The 2024 settlement changed how buyer agent commissions work. Buyer agents can no longer rely on the MLS to guarantee their commission from the seller. This is pushing agents to be more selective about brokerages and more focused on their value proposition.
Why this matters for businesses selling to agents
Understanding commission pressure helps you position your product. Agents feeling squeezed on commissions are more receptive to tools that help them generate leads, close more deals, or reduce costs.
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