How do commission splits affect a real estate agent’s income?

Commission splits directly impact a real estate agent's income by determining what portion of the gross commission a broker retains versus what the agent earns. Typically, an agent might earn between fifty to seventy percent of the commission, after referral fees and transaction costs. For example, on a three percent commission for a $350,000 home, a thirty-five percent split to the brokerage and referral fees can reduce take-home substantially. Understanding commission splits helps agents calculate net per transaction and align their business decisions accordingly.