How do commission splits impact real estate agent income?

Commission splits significantly affect real estate agent income by reducing the gross commission earned per sale. For instance, on a three percent commission of a $350,000 home, brokerage splits, referral fees, marketing, and taxes can take thirty to fifty percent or more. This lowers an agent’s net income, making it crucial to negotiate favorable splits, minimize costs, and optimize lead sources to improve profitability from each closing.