How real estate commission splits actually work
New agents are often surprised that the sale-price commission percentage isn't what lands in their account, there are usually two splits stacked on top of each other.
- Split 1, buy side vs. sell side. The total commission (often quoted around 5-6%, though this is negotiable and has become more explicitly negotiated in recent years) is typically divided between the listing brokerage and the buyer's brokerage, commonly close to 50/50 but not always.
- Split 2, you vs. your brokerage. Your brokerage then splits its side with you, per your individual agreement, common structures range from a flat 50/50 split for newer agents up to 100% (minus a flat desk/transaction fee) for agents on a "cap" plan at higher-split brokerages.
- Referral fees stack on top. If the client came from a referral, that agent's fee (commonly 20-35% of your side) comes out of your check before you see it.
- Use the commission split calculator to see all of this stacked together for a specific deal.