You see "70/30" or "90/10" on a brokerage's website and you know it has something to do with how you get paid. But what does it mean for the money that lands in your account after a closing? The answer depends on more than the two numbers. Caps, fees, and the kind of split model all change what you actually take home.
This guide explains how commission splits work for Texas agents, the common models, which fees reduce your take-home, and how to read a split agreement before you sign. It includes three worked examples. All of them use hypothetical numbers that we chose to make the math easy to follow. They are not typical figures, and they are not any brokerage's actual terms.
Quick answer: split vs. cap vs. fee
- A split is how the commission on a transaction is divided between you and your brokerage. A "70/30" split, for example, means you keep 70 percent and the brokerage keeps 30 percent of the commission, before any other deductions.
- A cap is a limit on how much the brokerage collects from your commissions in a set period, often a year. After you hit the cap, you usually keep a larger share or all of the commission, depending on the agreement.
- A fee is a separate charge, such as a transaction fee, monthly fee, or technology fee. Fees can apply on top of a split, or in place of one.
To compare any two brokerages, you need all three: the split, the cap if there is one, and every fee. For how one DFW brokerage approaches this, see Agent Compensation at Monument Realty.
How commission is paid in Texas
A few Texas basics help frame everything else:
- Commission is paid through your sponsoring broker. TREC states that all commissions must be paid through the agent's sponsoring broker, and that a sales agent may not accept compensation for a transaction from anyone other than the broker. That is why a split exists at all: the client's commission goes to the broker, and the broker pays you according to your agreement (TREC frequently asked questions).
- Commission rates are negotiable. The Texas Real Estate Research Center at Texas A&M reports that Texas has no specific laws regulating the commission rates agents can charge, and that the Texas Real Estate License Act requires any listing contract form adopted by TREC to inform the parties that commissions are negotiable (Texas Real Estate Research Center). There is also no standard or uniform rate.
- Your split is a separate agreement. The commission a client agrees to pay and the split between you and your broker are two different agreements. Your split is set in the agreement between you and your brokerage.
This is general information, not legal advice.
Common split models
Brokerages structure compensation in several ways. This table describes the main models in general terms. We are not claiming any model or percentage is "typical," because structures vary widely. For a deeper comparison of the two ends of the spectrum, see 100% commission vs. split.
Model | How it works | Watch for |
|---|---|---|
Fixed split | The same percentage division on every transaction | No cap, so the brokerage's share grows with your volume |
Tiered or sliding split | Your share increases as your production reaches set levels | How production is counted, and when the tiers reset |
Capped split | A split until the brokerage's share reaches a cap, then you keep more | The cap period, whether it resets, and any fees after the cap |
Flat-fee or "100% commission" | You keep the commission but pay fixed fees, such as monthly and per-transaction fees | Fixed costs hit hardest in slow months and slow years |
Team split | Commission is divided with a team leader as well as the brokerage | What the team provides in exchange, such as leads and support |
Worked examples (hypothetical numbers)
All numbers below are hypothetical. We picked round figures to make the math easy to follow. They are not typical, they are not recommendations, and they are not Monument's terms. The examples ignore taxes and your own business expenses.
Example 1: a fixed split with a transaction fee
Suppose a home sells for $400,000 and your side of the commission is 3 percent, or $12,000. Your split is 70/30, and the brokerage charges a $400 transaction fee.
- You keep 70 percent of $12,000: $8,400
- The brokerage keeps 30 percent: $3,600
- After the $400 transaction fee: $8,000 to you
The effective share is $8,000 of $12,000, or about 67 percent, not the 70 percent in the headline split.
Example 2: a capped split
Suppose every deal in a year has a $12,000 commission to you and the brokerage. Your split is 80/20, and the brokerage's share is capped at $16,000 per year. Over eight deals:
- On each of the first six deals, the brokerage keeps 20 percent, or $2,400. You keep $9,600 on each. The brokerage has collected $14,400 so far.
- On the seventh deal, the brokerage only needs $1,600 more to reach the cap, so you keep $10,400.
- On the eighth deal, the cap is reached, so you keep the full $12,000 (in this example, with no fees after the cap).
Your total: 6 × $9,600 + $10,400 + $12,000 = $80,000. Without the cap, eight deals at an 80/20 split would have paid you 8 × $9,600 = $76,800. The cap added $3,200, and the benefit grows with each additional deal.
Example 3: flat fees instead of a split
Suppose a brokerage lets you keep 100 percent of commission but charges $300 per month and $500 per transaction. Compare two different years, with the same $12,000 commission per deal:
- Eight deals: $96,000 − $3,600 in monthly fees − $4,000 in transaction fees = $88,400.
- Three deals: $36,000 − $3,600 − $1,500 = $30,900.
Now compare the three-deal year with an uncapped 80/20 split and no fees: 3 × $9,600 = $28,800. In this example, the flat-fee model comes out ahead at both volumes, but the gap is much smaller at three deals, because the monthly fees are the same whether you close three deals or eight. Change the fee amounts and the answer changes. What the examples show is that fixed fees matter most when your volume is low and a split matters most when your volume is high.
Use these examples as a template. Plug in the numbers from any brokerage's actual agreement, and compare total take-home at the volume you realistically expect.
Fees that change your take-home
A split tells you only part of the story. Ask about every one of these:
Fee type | What it is | What to ask |
|---|---|---|
Transaction fee | A charge per closed transaction | Is it flat or a percentage, and is there a maximum? |
Monthly or desk fee | A recurring charge for being with the brokerage | Do I pay it in months when I do not close a deal? |
Technology and systems fee | Charges for a CRM, transaction software, or similar tools | What is included, and what costs extra? |
Errors and omissions insurance | Coverage that protects against claims | Is it charged per deal or monthly? |
Franchise or royalty fees | Charges tied to a franchise brand, where one applies | Are these taken from my commission or the brokerage's share? |
Program or lead fees | Costs for training, coaching, or lead programs, including referral fees on pay-at-closing leads | How does the fee interact with my split? |
Post-cap fees | Fees that continue after you reach a cap | What do I still pay once I hit the cap? |
On who pays these fees: fees in your brokerage agreement are generally charged to you and are often deducted from your commission at closing, but that depends on your agreement. They are separate from the commission your client agrees to pay. Lead programs add another layer. For example, the cost of a pay-at-closing lead program is a referral fee that comes out of commission when a transaction closes, and how it is shared between you and your brokerage should be spelled out in writing. See our guide to how Zillow Flex works for an example.
Reading a split agreement
Do not sign anything you have not read in full. Use this checklist, and for a broader framework on the choice itself, read our guide on how to choose a brokerage.
- What is the split, and does it apply to every transaction, or only to certain types?
- Is there a cap? What is the cap period, when does it reset, and what counts toward it?
- Do any fees continue after I reach the cap?
- What is every other fee: transaction, monthly, technology, insurance, and program fees?
- How do referral fees and lead program fees interact with my split?
- When and how am I paid after a closing?
- How are team splits, if any, calculated on top of the brokerage split?
- What happens to my pending commissions if I leave? TREC states that you may receive compensation through your current sponsoring broker or the broker who sponsored you when you earned the right to it.
- Can the brokerage change the terms, and how much notice do I get?
- Are there any penalties or fees for leaving?
Ask for the plan in writing before you decide. If something is unclear or complicated, have a Texas real estate attorney review it. Monument's specific compensation details are not published in this guide, so ask us for the current plan directly.
Go deeper
For a closer look at how one DFW brokerage structures compensation, read Agent Compensation at Monument Realty. If you want to see how training and leads fit in, explore our lead programs, and if you want to find an office near you, see our offices.
Next step: Ask for Monument's compensation plan.
Frequently asked questions
What is a typical real estate commission split?
There is no single typical split. Structures vary widely, from fixed and tiered splits to caps and flat-fee models, and we do not cite a typical figure. Compare structures by calculating your take-home at the volume you realistically expect, including every fee.
How do caps work?
A cap limits how much the brokerage collects from your commissions during a set period, often a year. Once you reach it, you generally keep a larger share or all of the commission, though some brokerages charge fees after the cap. Ask when the cap resets and what counts toward it.
Who pays the brokerage fees?
Fees in your brokerage agreement are generally charged to you, often deducted from your commission at closing, but it depends on your agreement. They are separate from the commission your client agrees to pay.
How do commissions work in Texas?
Clients pay commission under a written agreement, and TREC states that all commissions must be paid through the agent's sponsoring broker. The broker then pays you according to your split agreement. Commission rates are not set by law.
Are commission rates negotiable in Texas?
Yes. The Texas Real Estate Research Center reports that Texas has no specific laws regulating commission rates, and that the Texas Real Estate License Act requires listing contract forms adopted by TREC to inform the parties that commissions are negotiable.
What is the difference between a split and a cap?
A split is how each commission is divided between you and the brokerage. A cap is a limit on the total the brokerage collects from your commissions over a period. A capped split combines the two: you split until the cap is reached, then you keep more.
