math

commission split

A commission split is the division of a real estate commission among the parties who earned it, such as between a listing brokerage and a cooperating brokerage, and then between each broker and their salesperson. Splits are set by agreement and are fully negotiable. Exam questions typically require calculating the total commission from the sale price, dividing it between firms, and then applying the agent's percentage.

Exam tip: Work step by step: price x rate = total commission; apply the brokerage split; then apply the agent's split. Read carefully which share the question asks for.
Example: A $400,000 sale pays 5% total ($20,000), split 50/50 between firms. The selling agent receives 60% of her firm's $10,000, or $6,000.

1. A $300,000 sale carries a 6% total commission split equally between listing and buyer brokerages. The buyer's brokerage owes a 25% referral fee on its side to an out-of-state broker. What is the referral fee?

Answer & explanation

Answer: C. Total commission is $18,000, the buyer side is $9,000, and 25% of that is $2,250. $4,500 incorrectly applies 25% to the full $18,000 commission.

Related terms & state variants

buyer broker compensation cooperating broker independent contractor percentage

Sources

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Last verified: 2026-10-23