What is meant by the term "commission split" in real estate?

The term "commission split" in real estate refers specifically to the division of agent commissions among multiple agents. This typically occurs when a real estate transaction involves more than one agent, such as a listing agent and a buyer's agent. In these situations, the total commission earned from the sale of a property is divided between the agents based on an agreed-upon percentage.

This concept is crucial for understanding how real estate professionals collaborate and share compensation for their roles in facilitating a transaction. For example, if a property's sale generates a commission of 6%, the agents involved might agree to split that amount, with the listing agent receiving a portion for securing the sale and the buyer's agent receiving a portion for representing the buyer's interests.

Understanding the commission split is essential for agents, as it directly impacts their earnings and motivations in a transaction, and it also affects how marketing and negotiations might be handled between agents.

Other options, such as the division of profits from rentals or the sharing of management duties, do not align with the concept of commission splits in real estate transactions. Similarly, the division of property ownership among buyers pertains to different aspects of real estate transactions altogether.