Answers — Teams
How do real estate team commission splits work?
On a real estate team, the brokerage takes its share of each deal, and the team and the agent divide the commission under the team agreement, often with a lower agent split on leads the team paid for than on leads the agent found. The split is figured either on gross commission or after the brokerage share.
By the Market X Consulting Editorial Team · Updated
Market X Consulting’s Team Recruiting & Compensation Plan Modeler runs both methods for each person on a roster. The agent below is a sample, with figures chosen to show the arithmetic.
What is the difference between a team split and a brokerage split?
The brokerage split is between the brokerage and whoever its agreement is with: the team, or the individual agent. The team split is between the team and its agent, under a separate agreement. An agent on a team is affected by both, which is why the order they are applied in matters.
Some brokerages cap what a team pays them in a year, just as they cap an individual agent. A team cap is reached on the team’s total commission, not on one agent’s.
Is the team split figured on gross commission or after the brokerage share?
Both exist, and the difference is large. In the sample, an agent with 12 closings at $9,000 of commission each ($108,000) takes home $59,400 when the split is figured on gross commission, and $47,520 when it is figured after a 20% brokerage share comes off the top.
| Split on gross | Split after brokerage share | |
|---|---|---|
| Commission (GCI) | $108,000 | $108,000 |
| Split base | $108,000 | $86,400 |
| Team share of the base | $48,600 | $38,880 |
| Agent take-home | $59,400 | $47,520 |
| Brokerage share (20%, team under its cap) | $21,600 | $21,600 |
| Lead cost ($1,200 per team-sourced closing) | $10,800 | $10,800 |
| Left for the team | $16,200 | $28,080 |
Read the agreement for the words that decide it: whether the agent’s percentage applies to the gross commission or to the commission after the brokerage’s share.
Why do team-lead deals pay the agent a lower split?
Because the lead already cost the team money. A deal from a lead the team bought or generated carries that cost, so team plans often pay a lower split on team leads than on deals the agent sources. The sample agent’s blended team share is 45%: 75% of deals at 50% and 25% at 30%.
What does the team actually keep from an agent?
Not the team share. What the team keeps is the commission minus the agent’s take-home, minus the brokerage share allocated to that agent’s deals, minus the cost of the leads behind them. In the sample that is $16,200 on the split-on-gross plan, before any team overhead or the team lead’s own pay.
A team can pay every agent a generous split and still lose money, if the leads cost more than the team share brings in. Contribution is the number that shows it.
Is a 70/30 split good?
A split is only good or bad next to what comes with it: who pays for the leads, whether there is a cap, and what fees apply. Compare plans on your own take-home for the same year. For the sample agent, the 50/50-and-70/30 plan pays $59,400; a flat 60/40 plan with a $250 monthly desk fee pays $61,800.
| Plan | Agent take-home | Left for the team |
|---|---|---|
| 50/50 on team leads, 70/30 on own leads | $59,400 | $16,200 |
| 60/40 on every deal, $250 a month desk fee | $61,800 | $13,800 |
Comp terms belong in a written agreement through your brokerage. Whether a role is an independent contractor or an employee is a legal question for your own counsel.
These answers and the instruments are planning and analysis tools. They are not legal, tax, accounting, financial or appraisal advice, and they do not promise or imply any income or result. Every example figure is a sample chosen to show the arithmetic, not a benchmark, a market figure or an expectation.