What Is a Good Commission Split in Real Estate? [2025 Guide]

If you’re stepping into the real estate world or evaluating your current brokerage, understanding commission splits is essential to your financial success. But what is a good commission split in real estate? The answer isn’t as straightforward as you might think. Commission structures vary widely between brokerages, and what works for one agent may not be ideal for another.

In this comprehensive guide, we’ll break down everything you need to know about real estate commission splits, from how they work to what different brokerages offer. Whether you’re a new agent looking for your first broker or an experienced professional considering a switch, you’ll learn how to evaluate commission structures and find the arrangement that maximizes your earnings.

Understanding Real Estate Commission Splits

Before diving into what makes a “good” commission split, let’s clarify how these arrangements actually work.

A commission split refers to how the commission earned from a real estate transaction is divided between the real estate agent and their brokerage firm. When a property sells, the total commission (typically 5% to 6% of the sale price) is first split between the listing brokerage and the buyer’s brokerage. Then, each brokerage divides its portion with its respective agent based on their agreed-upon split.

Here’s a practical example: Imagine a home sells for $500,000 with a 6% total commission ($30,000). That $30,000 is typically divided equally between the listing side and buyer’s side, giving each brokerage $15,000. If you’re the buyer’s agent with a 70/30 split, you’d receive $10,500 (70% of $15,000), while your brokerage keeps $4,500 (30%).

It’s worth noting that the real estate landscape changed significantly in 2024. The National Association of Realtors reached a $418 million settlement that restructured how commissions are handled. As of August 17, 2024, buyer agents are no longer automatically paid by the seller, and commission offers can no longer be displayed on the Multiple Listing Service (MLS). This shift has made understanding your commission split even more critical.

What Percent Commission Do Most Real Estate Agents Make?

Real estate agents typically earn between 2.5% to 3% of a property’s sale price after the commission is split between the buyer and seller sides. However, your actual take-home amount depends heavily on your commission split with your brokerage.

According to recent industry data, most California-based national franchises now start new agents on a 70/30 split (70% to the agent, 30% to the brokerage), replacing the older 60/40 model. Seasoned, high-volume producers can negotiate more favorable terms, 85/15 or even 90/10 splits.

Several factors influence commission percentages:

Market norms: Regional variations exist. In California, for example, fresh 2025 surveys show sellers pay an average of 5.18% of the final price in total commission, typically split about 2.61% to the listing broker and 2.57% to the buyer’s broker.

Type of property: Luxury properties or commercial real estate transactions may involve different commission rates due to property complexity and value. If you’re selling your own home as a realtor, understanding these differences becomes even more important.

Negotiation: Commission rates are fully negotiable between parties. The 2024 NAR settlement reinforced that there is no legally “standard” commission rate. Many agents and sellers now use strategies to negotiate commission more effectively.

Brokerage policies: Each firm has its own commission structure. Some offer competitive splits or performance-based incentives, while others maintain fixed rates.

Agent experience and performance: Experienced agents with proven track records command higher splits than newer agents. Top performers often have more negotiating power.

Common Commission Split Models in Real Estate

Understanding the different commission split structures will help you determine which arrangement best suits your career stage and business goals.

Traditional Percentage Splits

The most common model involves splitting each commission with your brokerage based on a fixed percentage.

50/50 Split: The agent and broker each receive half the commission. This arrangement typically occurs when brokers provide substantial support, office space, client leads, marketing resources, and administrative assistance. While new agents may accept this split for the training and resources, it becomes less attractive as you gain experience.

60/40 Split: The agent receives 60% while the brokerage keeps 40%. This split represents a middle ground, offering some additional income to agents while still providing brokerage support.

70/30 Split: The 70/30 split has become the new industry standard for new agents at many major brokerages. Keller Williams, for example, operates on a 70/30 split (actually 64% to the agent, 30% to the local office, and 6% as a franchise fee to the national brand). This structure gives agents a larger share while the brokerage covers overhead and provides support services.

Graduated or Tiered Splits

Graduated commission splits reward agents for higher production. A brokerage might offer a 70/30 split on your first $50,000 in gross commission income for the year, which then increases to 80/20 for the next $50,000, and so on. This model incentivizes agents to close more deals and rewards consistent performance.

Capped Commission Models

Many modern brokerages use cap systems where agents pay a percentage split until reaching an annual cap, after which they keep 100% of their commissions (minus a small transaction fee).

Keller Williams’ earnings are capped, typically between $15,000 and $28,000, depending on the local market. Once both caps are met, the agent keeps 100% of the commission.

This model works particularly well for high-volume agents who can reach their cap early in the year and maximize earnings for the remainder.

100% Commission Models

Flat-fee models let agents keep nearly all their commission and pay a set fee per transaction, often $100 to $1,500. These are popular with experienced, high-volume agents who don’t need extensive brokerage support.

The trade-off? You’re responsible for your own lead generation, marketing, and business expenses. This model suits independent agents with established client bases who may be using their expertise to help clients navigate complex real estate decisions.

What Is Keller Williams Commission Split?

Keller Williams is known for its agent-friendly commission structure and profit-sharing opportunities. Understanding their model can help you evaluate whether it’s competitive with other options.

Keller Williams operates on a 70/30 split, though it’s actually structured as 64% to the agent, 30% to the local office, and 6% as a franchise fee to the national brand. The company also offers capped commission plans where agents eventually keep a higher percentage once they reach their production cap.

Agents can earn higher splits as they reach production goals, incentivizing them to grow their real estate careers within the Keller Williams market center. Keller Williams puts every recruit on 70/30 before they cap, and seasoned, high-volume producers can negotiate even more favorable terms.

This structure combines the security of brokerage support with the financial upside of higher earnings as your business grows, making it attractive for both new and experienced agents.

What Does a 60/40 Commission Split Mean?

A 60/40 split means the real estate agent receives 60% of the commission earned from a transaction, while the brokerage firm receives the remaining 40%.

Here’s how it breaks down:

Agent’s share (60%): This portion goes directly to the agent as compensation for facilitating the sale or purchase of a property. The agent handles client relationships, property showings, negotiations, paperwork, and closing coordination.

Brokerage’s share (40%): The brokerage keeps this portion to cover operating expenses such as administrative costs, marketing expenses, training programs, office space, technology platforms, errors and omissions insurance, and other overhead.

Using our earlier example of a $500,000 home sale with a 6% total commission: If the buyer’s side receives $15,000 and you have a 60/40 split, you’d earn $9,000 while your brokerage keeps $6,000.

According to industry experts at Indeed, commission splits can vary greatly depending on factors such as the agent’s experience, production level, brokerage policies, market conditions, and local regulations. A 60/40 split might be standard for new agents, but it becomes less competitive as you gain experience and close more transactions.

Evaluating Commission Splits: Beyond the Numbers

While the commission percentage matters, it’s not the only factor to consider when choosing a brokerage. Sometimes, a 60% split with tools and guidance leads to a faster ramp-up and higher total income than a 90% split with no support.

What to Consider Beyond the Split

Training and mentorship: Does the brokerage offer comprehensive training programs, especially for new agents? Quality education can accelerate your success more than a few extra percentage points.

Lead generation: Some brokerages provide leads to agents, which can be invaluable when building your client base. If you’re wondering how much realtors charge to find rentals, understanding lead costs becomes crucial. However, broker-provided leads often come with lower splits or additional fees.

Marketing support: Professional photography, virtual tours, advertising budgets, and branded materials can significantly impact your ability to attract clients.

Technology and tools: Access to CRM systems, transaction management software, and digital marketing platforms adds value to your brokerage relationship. Tools like Kukun’s iHomeReport can help agents provide comprehensive property information to clients.

Office space and resources: Physical office space, conference rooms, and administrative support can be essential for some agents’ business models.

Brand recognition: Working with established brands like RE/MAX can help agents quickly build trust with new clients due to strong brand recognition.

Hidden Fees to Watch For

The industry quietly stacks fees against agents. Franchise fees from national brands often skim an additional 6% to 8% off the top of every deal, and that’s not part of your split; that’s extra. Other potential costs include:

Monthly desk fees
Technology fees
E&O insurance
MLS fees
Transaction coordinator fees
Marketing fees

Make sure to ask for itemized examples of all fees that come out of your commission before signing with any brokerage. Understanding net proceeds calculations can help you better evaluate your true take-home pay.

What Is Considered a Good Commission Split?

The truth is, there’s no universal answer. A “good” commission split depends on your experience level, business needs, and long-term goals.

For new agents: A 60/40 or 70/30 split with comprehensive training, mentorship, and lead support often provides the best foundation for building a successful career. The additional services justify the lower percentage you keep.

For mid-level agents: Once you’ve established yourself, aim for 70/30 to 80/20 splits. At this stage, you’re generating your own leads and need less hands-on support, so you should keep more of your earnings.

For experienced, high-volume agents: Splits of 85/15, 90/10, or 100% commission models with flat fees make the most sense. According to Properties Miami, it’s common to see 90/10 (90% Agent, 10% Brokerage), 85/15 (85% Agent, 15% Brokerage), and 80/20 (80% Agent, 20% Brokerage) commission splits in competitive markets.

The key is finding the right balance between competitive commission rates and the support your brokerage provides. As you grow your real estate business, your needs will evolve, and so should your commission arrangement.

How Commission Splits Work With Real Estate Teams

When you’re part of a team, your commission is split not just with the brokerage but also with the team leader. According to Join Realty Hub, real estate team commission splits vary but often follow a 50/50 model for team-sourced leads and 70/30 or better when agents bring their own clients.

Here’s how the money typically flows:

Gross commission earned: Start with the total transaction commission
Brokerage split: The brokerage takes its cut (20-30%)
Team leader cut: The team leader takes a portion (often 50% of what remains)
Agent net pay: What’s left goes to you

After all the cuts, you might walk away with just 30-40% of the total commission on team-sourced leads. However, teams often provide valuable benefits like warm leads, transaction support, and mentorship that can accelerate your career growth.

Important Questions to Ask Before Accepting a Commission Split

Before committing to any brokerage, ask these critical questions:

What’s the exact split, and when does it improve? Get specifics about timelines and production goals.
What fees come out of my commission? Request itemized examples so there are no surprises.
What training and support do you provide? Especially important for new agents.
How do you generate leads, and what’s the cost? Understand if lead fees are separate from your commission split.
Is there a cap, and how much is it? Cap systems can significantly increase your annual earnings.
What happens if I want to leave? Some brokerages have exit fees or restrictive policies. If you’re considering using a lawyer instead of a realtor for certain transactions, understand how that impacts your brokerage relationship.
Will I still owe a split on self-generated deals? Many agents are shocked to learn that even self-sourced business is subject to team splits.
Can you disclose information about other offers? Understanding what realtors can tell you about competing offers is important for your negotiation strategies.

Comparing Top Real Estate Brokerages by Commission Split

To help you evaluate your options, here’s how some major brokerages structure their commissions:

Keller Williams: 70/30 split with annual caps of $15,000-$28,000. Once you cap, you keep 100% of commissions.

eXp Realty: 80/20 split with a $16,000 annual cap. After capping, agents receive 100% minus transaction fees.

RE/MAX: Agents retain anywhere from 60-95% of their gross commission. According to List with Clever, agents on the 95/5 split typically pay desk fees, which can be among the highest in the industry.

REAL Broker: 85/15 split with a $12,000 yearly cap for solo agents, $6,000 for team members. No monthly fees, and no transaction fees while paying the 15% split.

Coldwell Banker: As a legacy brand with a mix of company-owned and franchised offices, Coldwell Banker does not publish a standard corporate split or cap. Each affiliate sets its own compensation plans.

Remember, commission split is just one piece of the puzzle. Consider the complete package of services, support, and opportunities each brokerage offers.

Maximizing Your Real Estate Income

Real estate agent and customers shaking hands together celebrating finished contract after signing about home insurance and investment loan, handshake and successful deal.

Regardless of your commission split, focus on these strategies to maximize earnings:

Build your brand: The stronger your personal brand, the more leverage you have in negotiating favorable splits. Understanding what information you can ethically share about neighborhoods helps you build trust with clients.

Generate your own leads: Reducing dependence on brokerage-provided leads gives you more negotiating power and potentially qualifies you for higher splits.

Track your expenses: Understanding your true costs helps you evaluate whether a lower split with more services or a higher split with fewer services makes financial sense.

Network consistently: Building positive relationships in the community is key to establishing trust and credibility, which leads to more referrals and repeat business.

Continue your education: Advanced certifications and specializations can justify higher commission splits and attract better clients.

Consider your transaction volume: High-volume agents benefit most from capped commission models, while part-time agents might prefer straightforward percentage splits.

Leverage technology: Tools like Kukun’s Cost Estimator can help you provide added value to clients by showing them renovation costs and ROI projections.

Last Thoughts

Understanding commission splits is fundamental to building a successful and profitable real estate career. While 70/30 splits have become the industry standard for new agents, the “best” commission split depends on your experience level, business model, and the value your brokerage provides.

Don’t just chase the highest percentage; evaluate the complete picture. Consider training programs, lead generation support, brand recognition, technology tools, and the total fees you’ll pay. Your split affects your paycheck, but what truly builds a sustainable career is the combination of fair compensation and the resources to succeed.

As the real estate industry continues evolving following the 2024 NAR settlement changes, commission structures are becoming more transparent and negotiable. This shift empowers agents to find arrangements that truly align with their career goals and business needs.

Whether you’re just starting out or ready to switch brokerages, arm yourself with knowledge about different commission models, ask the right questions, and negotiate confidently. Your commission split is a critical business decision; make it count.

FAQs

Can I negotiate my commission split with my broker?

Yes! Commission splits are negotiable, especially for experienced agents with proven production records. If you’re generating your own leads, have specialized expertise, or consistently close high-value transactions, you have leverage to negotiate better terms. Don’t be afraid to ask; the worst answer you’ll get is no.

When should I renegotiate my commission split?

Consider renegotiating when you’ve consistently met or exceeded production goals, when you’re generating most of your own leads, after you’ve been with a brokerage for 1-2 years with strong performance, or when competing brokerages offer better terms. Annual reviews are good opportunities to discuss improving your split.

Do commission splits differ for commercial vs. residential real estate?

Yes, commission structures can vary significantly between residential and commercial real estate. According to The CCIM Institute, in commercial real estate, fees are always negotiable and are more openly negotiated than in residential transactions. Buyers and sellers negotiate any fees with each of their commercial representatives that are appropriate for the transaction.

How do commission caps work?

A commission cap is the maximum amount you’ll pay your brokerage in a given year. Once you reach your cap (for example, $18,000), you keep 100% of your commission for the rest of the year (sometimes minus a small transaction fee). Your cap resets annually. High-producing agents benefit most from capped models.

What’s the difference between a commission split and a transaction fee?

A commission split is the percentage of each commission you share with your brokerage. A transaction fee is a flat amount charged per transaction, typically ranging from $100 to $500. Some brokerages charge both, while others use one or the other. Always clarify which fees apply to your arrangement.

Are lower commission splits always bad for agents?

Not necessarily. For new agents starting out and struggling to find clients, a percentage-based commission brokerage with comprehensive training, a steady stream of clients, and office space might provide better value than a higher split without support. Evaluate the total value, not just the percentage.

How has the 2024 NAR settlement affected commission splits?

The settlement that took effect in August 2024 changed how commissions are disclosed and negotiated. Sellers are no longer required to pay buyer agent commissions through the MLS, and buyers must now sign written agreements with their agents before touring homes. This has made commission negotiations more transparent but hasn’t fundamentally changed how brokerages split commissions with their agents. However, some agents may need to adjust their approach to securing compensation.

Should I consider net listing agreements?

Net listings, where agents keep everything above a minimum price set by the seller, are controversial and illegal in most states. They create conflicts of interest and are banned by NAR in most jurisdictions. Stick with traditional percentage-based commission structures for ethical and legal clarity.

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What Is a Good Commission Split in Real Estate? was last modified: November 12th, 2025 by Vanessa Gallanti

Written by Vanessa Gallanti. November 12, 2025

Enthusiast about planning, project management, construction materials and technology, and construction. A civil engineer from Los Andes University and a content writer for Kukun.