Commission Splits, Caps and Fees, Explained in Plain Math
Every brokerage describes its compensation differently – 70/30, 100% commission, caps, desk fees, transaction fees. The labels do not matter. The only number that matters is what you keep after everything, and what that support helped you earn. This guide walks through the real math so you can compare any offer on equal footing.
Eight terms cover almost every compensation plan.
Once you can translate the vocabulary, every recruiting pitch becomes comparable. Here is what each term actually means for your bank account.
Split
The percentage of each commission you keep versus what the brokerage keeps. A 70/30 split means you keep 70%. Splits often improve as your production grows.
Cap
A yearly ceiling on what the brokerage collects from your splits. After you hit the cap, you keep 100% of commissions for the rest of that year, minus any per-transaction fees.
Desk fee
A fixed monthly charge paid whether or not you close anything. Common at 100%-commission brokerages. Twelve months of desk fees are owed even in a slow year.
Transaction fee
A flat charge per closing, on top of or instead of a split. Small per deal, meaningful across a full year of production.
Franchise or royalty fee
A percentage skimmed for the national brand before your split is calculated. Ask whether it applies before or after the split – it changes the math.
E&O insurance
Errors-and-omissions coverage, usually billed per transaction or per month. Nearly universal; the question is only who pays and how much.
Technology fee
Monthly or annual charges for the CRM, website, and transaction systems. Compare what is included against what you would buy on your own.
Referral fee
A percentage paid to another agent or a lead program that sent you the client. Lead programs that charge at closing are effectively another split.
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What this looks like in practice.
Why 100% commission is never 100%
A brokerage advertising 100% commission still has to keep the lights on, so the revenue moves into fixed charges: monthly desk fees, per-transaction fees, technology fees, and paid add-ons for things a full-service brokerage includes. At high production volumes the flat-fee model can genuinely net more. At lower volumes, fixed fees can consume a larger share of your income than a traditional split would have – and in a slow year, you pay them anyway. The honest way to compare is to run your own expected transaction count through both fee structures, not to compare labels.
Your real number is net income, not split percentage
A split is not a price – it is a price for a bundle. What the brokerage keeps pays for whatever support you receive: broker access when a contract goes sideways, training, marketing, office space, staff, and lead or referral flow. A high split with no support often nets less than a fair split with real support, because production tends to rise with support – and because everything the brokerage does not provide, you buy yourself at retail. Compare plans by estimating your full year: expected closings, average commission, every fee, and the cost of replacing anything missing.
Ten questions to ask any brokerage
1. What is the split, and does it change after a cap or production level? 2. Which fees are mandatory, and what is the total in a month with zero closings? 3. Do franchise or royalty fees come out before or after the split? 4. What exactly does the technology fee include? 5. Who answers a contract question at 8 p.m., and do they compete with me for business? 6. What does the marketing package actually produce – show me current examples? 7. Are leads or referrals provided, and what do they cost at closing? 8. What training is running right now – show me the calendar? 9. What would my all-in cost have been last year at my production level? 10. Can I get the full fee schedule in writing?
Bring us any offer sheet. We will do the math with you
Wallace builds compensation plans that reward production, backed by the support infrastructure that drives it – non-competing brokers, live training, marketing resources, and referral and relocation flow. Rather than publishing one-size-fits-all numbers, we would rather sit down with your actual production and put your real numbers side by side with any other offer, including the fees the recruiting pitch leaves out.
Common questions, clearly answered.
The answers below are honest and specific. If yours is not here, ask it through the form – a member of the Wallace team will respond personally.
What is a commission cap in real estate?
Is a 100% commission brokerage really 100%?
What is a normal commission split for a new agent?
What fees do real estate agents pay to their brokerage?
How do I compare two brokerage compensation offers?
Run your numbers with us.
Tell us your market and roughly where your production stands. A member of the Wallace team will walk through the full math with you – confidentially, with no pressure and nothing left out.
A real member of the Wallace team reads every message and responds directly.
You decide the pace. No pressure, no obligation, and every conversation stays confidential.
