Glossary / Commissions and splits
Also known as: Net commission income (NCI), take-home commission
Net commission is what a broker actually receives from a deal after the co-broker share, brokerage split, referral fees, and transaction fees are taken out of the gross commission. It is the figure that matters for your own cash flow and budgeting.
The Close calls this net commission income (NCI) and defines it as "the dollar amount that's left over from your GCI after everyone else gets their piece of the real estate commission." It lists the usual deductions: the broker split, transaction fees, referral fees, and marketing costs. It also notes that taxes are set aside from net income, not gross. On a leasing deal there may be one more step before any of these: sharing the commission with the other side's broker in a Co-broke. Which deductions apply, and in what order, depends on your agreements.
Your gross commission on paper and the check you receive can be far apart, so plan from the net. The net also arrives later than the landlord's payment, because The Close notes that commission is paid to the brokerage first and then passed to the agent under their agreement.
Every deduction is set by a document you can read in advance: the listing or co-brokerage agreement for the other side's share, any Referral fee agreement, and your own split and fee schedule with your firm. If you use a commission advance, any fee for it is one more deduction to include.
Before you count on a commission, run it all the way down to your net and budget from that number.
For example, suppose your firm receives a hypothetical $40,000 commission and you owe a hypothetical 25% referral fee. That is $10,000, leaving $30,000. On a hypothetical 70/30 brokerage split you receive $21,000, and after a hypothetical $500 transaction fee your net commission is $20,500.
