Commission Splits and Brokerage Fees Explained (Texas)

The common models

• Percentage split. The brokerage keeps a set share of each commission. Terms vary and are often negotiable.
• Tiered or capped. The split improves as you earn more, or the brokerage stops taking a share after you reach a yearly cap.
• High-split or 100 percent with fees. You keep most or all of the commission, but may pay monthly fees or a fee on each deal.
• Team. The team lead sets a split and often provides leads. Your share may be lower, and support may be higher.
• Referral or lead-based. If the brokerage gives you the lead, it may take a larger share when that lead closes than on a client you brought yourself.

Illustration (round numbers, not a real offer)

Say a home sells for $400,000 and your side earns a 3 percent commission, which is $12,000. This is only math.

Brokerage A keeps $3,600 of the $12,000 and charges no monthly fees. You keep $8,400 before your own costs.

Brokerage B lets you keep $10,800 of the $12,000, but charges $400 a month and a $300 transaction fee. If you close two deals in a year, monthly fees are $4,800 and transaction fees are $600. Your total is $21,600 minus $5,400, which is $16,200.

Brokerage A on the same two deals is $16,800. Brokerage B wins only if you close more deals. Work your own numbers.

Fees to ask about

• Monthly or desk fees
• Transaction or compliance fees
• Technology and marketing fees
• Franchise or royalty fees
• Annual caps and when they reset
• E&O insurance and MLS or association dues (often separate from brokerage fees)

Put it in writing

Ask for the independent contractor agreement and the fee schedule before you decide. Verbal terms are hard to prove later. If something is negotiated, get it in the agreement.

Line up each brokerage's fees side by side for the same sale price, and compare what you keep after every fee.

One illustrative year, three fee structures

All numbers here are ILLUSTRATIVE round numbers to show the arithmetic. They are not an offer from any brokerage, and they are not typical figures. Assume every sale pays your side a $10,000 commission before the brokerage takes anything. Assume the year has 6 closings, so your total is $60,000.

Structure A keeps it simple. The brokerage keeps $3,000 of each commission. No monthly fee, no transaction fee.

Structure B lets you keep $9,000 of each commission, so the brokerage keeps $1,000. You also pay $500 a month and a $350 transaction fee on each closing.

Structure C is capped. The brokerage keeps $3,000 of each commission until it has collected $12,000 in the year. After that its share is $0. You pay a $400 transaction fee on every closing, with no monthly fee.

Now change one thing: a slower year

Same three structures, but only 3 closings. Your total is $30,000. Structure A: the brokerage keeps 3 x $3,000 = $9,000, so you keep $21,000. Structure B: $3,000 plus $6,000 monthly plus $1,050 transaction fees is $10,050, so you keep $19,950. Structure C: the cap is not reached, so $9,000 plus 3 x $400 = $10,200, and you keep $19,800.

The lesson is not that one structure wins. The ranking flipped when the number of closings changed. Fixed monthly costs hurt most when closings are few. Caps help most when closings are many. Before you sign, run your own slow year and your own good year. Our guide on first-year budgets shows how to build both.

Fees that hide outside the split

A split is only one line. Use this checklist and ask for each item in writing. Mark any you cannot get an answer for.

• Transaction or file fee. Per closing, or per transaction even if it falls through? Does it apply after a cap?
• Technology fee. Monthly or yearly? What does it include, and can you opt out of tools you do not use?
• E&O insurance. Is it billed per transaction or monthly? Is it covered by the brokerage or separate?
• Franchise or royalty fee. Is it taken from your side, or does the brokerage pay it out of its share?
• Cap and cap reset. What counts toward the cap? On what date does it reset? What happens to a deal that closes after the reset but was signed before?
• Referral fees. Do you owe a fee on leads the brokerage gives you? On deals you refer out? Is it taken before or after other fees?
• Fee change rights. Can the brokerage change fees by notice? How much notice?
• Exit costs. Is there a fee to leave, or a charge to release a file?
• Other recurring costs: association, MLS, lockbox and signage. These are often separate, but ask who pays what.

What Texas requires in writing

Here is what the rules say. This is a description with citations, not legal advice. Rules change, so confirm the current text on the TREC site.

TREC's rule on broker responsibility says a broker must notify each sponsored sales agent in writing of the scope of what the agent is authorized to do. The same rule says any delegation of supervision must be in writing, and that brokers keep sponsorship agreements between the broker and sponsored agents among the records they retain.

On money, the rule's text says all compensation paid to a sponsored sales agent for acts or services subject to the Act must be paid through, or with the written consent of, the sponsoring broker. TREC's FAQ says the same thing in plain terms: a sales agent may not accept compensation for a real estate transaction from anyone other than the broker the agent was associated with when the commission was earned, and may not pay a commission except through the sponsoring broker. It cites Texas Occupations Code Section 1101.651(b) and (c). TREC Rule 535.3 covers consent to pay or receive and notes compensation can come through the broker who sponsored you when you earned it.

TREC also says supervision details should be described in a written agreement between the sales agent and the sponsoring broker, and that the agreement should cover how compensation is handled.

None of the sources we read set a split or a fee amount. Those come from your agreement, which is why you ask for it before you decide.

Five clauses that matter most in an independent contractor agreement

Read the whole agreement. If you only have an hour, read these five first. This list is an original framework from The Bauer Group.

• Compensation and timing. How is each commission divided, in what order are fees taken, and when are you paid after closing?
• Fee changes. Can the brokerage add or raise a fee? With how much notice? Can you leave if it does?
• Leaving. What notice is required? What happens to pending deals, listings and referral fees? See switching brokerages.
• Leads and clients. Who owns a lead the brokerage supplies, and what is owed on it? What happens to leads in progress?
• Scope, supervision and liability. What are you authorized to do? Who answers questions and reviews contracts? Who pays if a deal goes wrong, and what insurance covers it?

Check before you rely on this

This guide reflects the sources named below, read in early October 2026. Fees, rules, forms and market numbers change, and some details here may already be out of date.

Confirm anything that affects your money, your license or a contract with the source itself, such as TREC, the National Association of Realtors, your local association or your sponsoring broker. If something looks different from what you find, trust the source and let us know. This guide is general information for licensed agents and people becoming agents. It is not legal, tax or financial advice.