Glossary / Commissions and splits
Also known as: Split, house split, co-broke split
A commission split is how a leasing commission is divided. It can mean the division between the landlord's broker and the tenant's broker on a deal, or the division between an individual broker and their brokerage. Both shrink the share of the gross fee you take home.
The Close describes two separate splits: a transaction-side split between the listing side and the buyer (or tenant) side, and a brokerage split between an agent and their firm. In commercial leasing, the first is set in the listing agreement or a co-brokerage agreement. The New York City Bar's model office brokerage agreement offers two options when an outside broker is involved: the landlord pays the listing broker 50% and the outside broker 100% of the scheduled commission, or the landlord pays each of them 50%. The second split is set in your agreement with your own firm.
The split decides how much of a deal is yours. According to Janover, a 50/50 split between co-brokers is common practice, but it varies, and newer brokers may see 60/40 or 70/30. The Close lists several brokerage split structures: fixed percentages, graduated splits that improve after a GCI threshold, capped plans, and 100% plans where the agent pays fees instead.
The split also affects when you are paid. The Close notes that commission is "paid to the brokerage, not directly to the agent," and some state laws require it. Colorado law, for example, makes it unlawful for a broker employed by another broker to accept a commission from anyone except their employing broker. Your money therefore arrives after the landlord pays, after any co-broker passes on your side, and after your firm processes its share. See Net commission for what is left at the end.
For every deal, write down both splits and work your numbers from your own net share, not the gross fee.
For example, on a hypothetical $60,000 leasing commission split 50/50 between the landlord's and tenant's brokers, your firm receives $30,000. On a hypothetical 70/30 brokerage split, you receive $21,000 and your firm keeps $9,000.
