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Commission Split

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Definition: Though usually considered the method of broker and agent in a brokerage to share a transaction commission, it is really a multi-level structure.

In a traditional real estate business, a seller would contract to have their property listed for a set percentage of the selling price. The listing brokerage lists the property in the Multiple Listing Service (MLS) and offers to share that commission with any MLS broker member that brings a buyer that completes the purchase. That's split #1.

Unless the broker in each of these companies is personally involved in the transaction, there will also be agents to be compensated. Per their written independent contractor agreement, each of the brokers would then split their portion of the commission with the agents as split #2.

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