Doorlark
Short answer: a 100% commission brokerage charges you fixed fees instead of a cut of each check, so it wins once you close enough deals to cover those fees. A split with a cap costs more per deal early in the year and less after the cap. The only way to know which is better for you is to run both offers at your real deal count, including a slow year.
Three offers, side by side
These are example offers, not any brokerage's real terms. Every deal is a $400,000 sale at 2.5%, so $10,000 gross.
| Offer | What you pay |
|---|---|
| A: 70/30 split with a cap | 30% to the brokerage until $16,000 is paid for the year, plus $400 per deal |
| B: 100% commission | $1,200 a month desk fee ($14,400 a year, whether you close or not), plus $395 per deal |
| C: 80/20 split, no cap | 20% of every deal, no other fees |
What you keep at 4, 8, 12 and 16 deals
| Deals a year | A: 70/30, $16K cap | B: 100% | C: 80/20 |
|---|---|---|---|
| 4 | $26,400 | $24,020 | $32,000 |
| 8 | $60,800 | $62,440 | $64,000 |
| 12 | $99,200 | $100,860 | $96,000 |
| 16 | $137,600 | $147,680 | $128,000 |
Paid to you before your own business costs and tax. The winner changes with the deal count, which is why "100% is better" or "a cap is better" isn't a real answer.
The math, so you can check it
| Offer A, deals 1 to 5: $10,000 − $3,000 split − $400 fee = $6,600 each | $33,000 |
| Offer A, deal 6 hits the cap: $10,000 − $1,000 − $400 | $8,600 |
| Offer A, deals 7 and 8: $10,000 − $400 = $9,600 each | $19,200 |
| Offer A total | $60,800 |
| Offer B: 8 × ($10,000 − $395) − $14,400 | $62,440 |
| Offer C: 8 × $10,000 × 80% | $64,000 |
Find your break-even
Break-even is where two offers pay the same. Between A and B in this example: before the cap, A costs you $3,400 a deal and B costs $395 a deal plus $14,400 a year. Set them equal: $3,400 × deals = $395 × deals + $14,400, so deals = $14,400 ÷ $3,005 = 4.8. Under 5 deals, the split with a cap keeps more money in your pocket. From 5 deals up, the 100% offer does.
Do the same for your offers: the yearly fixed fees of the 100% offer, divided by what the split costs you per deal minus the 100% offer's per-deal fee.
Run your own numbers: the agent net income calculator shows take-home per deal and per year after split, cap, fees, costs and a tax set-aside.
Questions to ask before you sign
- Is the cap per calendar year or per anniversary year? What's the date it resets?
- Are there fees after the cap? How much per deal, and do they have their own cap?
- Is the monthly fee charged in months you don't close? What happens if I fall behind on it?
- Who pays E&O insurance, and is it per deal or per year?
- Is there a royalty or franchise fee on top of the split? Is it capped?
- What do I get for the split: leads, a transaction coordinator, marketing, office space, training? Put a dollar value on anything you'd otherwise pay for.
- Can I see the full fee schedule in writing before I sign the independent contractor agreement?
What a split pays for that a 100% model may not
Compare what you'd spend on your own under each offer. A split brokerage that includes a transaction coordinator, sign installs, listing photos or leads may save you real money that a 100% brokerage would leave to you. Add those costs to the 100% column before you compare. Leads from the brokerage often carry their own referral fee, so ask about that too.
Example numbers to show the method, not real brokerage terms or typical figures. Read your own offer documents and ask the brokerage to confirm every fee in writing.
FAQ
Is a 100% commission brokerage worth it?
It is when your deal count is high enough to cover the fixed monthly and per-deal fees. Divide the 100% offer's yearly fixed fees by what a split costs you per deal (minus the 100% offer's per-deal fee) to find the break-even number of deals.
What does 100% commission mean in real estate?
You keep the whole commission on each deal instead of sharing a percentage with the brokerage. In exchange you pay fees, often a monthly fee, a per-deal transaction fee, or both.
What is a cap in real estate?
A cap is the most you pay the brokerage in splits during a year. Once you've paid it, the split usually stops, though some brokerages still charge a smaller fee per deal after cap.
Is a 70/30 split good?
It depends on the cap, the fees and what the brokerage gives you. A 70/30 split with a low cap can beat an 80/20 split with no cap once you close enough deals. Compare offers at your expected deal count.