Real Estate Commission Split Agreement Template

A well-structured and professional real estate commission split agreement is paramount in establishing clear expectations and fostering trust between real estate agents and brokerages. This document outlines the terms of commission sharing, ensuring transparency and preventing misunderstandings. To create a template that exudes professionalism and trustworthiness, consider the following design and content elements.

Understanding the Purpose

A real estate commission split agreement is a legally binding contract that delineates the percentage of commission earned on a property transaction that will be allocated to the real estate agent and the brokerage. It is essential to approach the template creation process with a clear understanding of its purpose.

Design Principles

Clarity and Conciseness: The agreement should be easy to read and understand. Avoid complex legal jargon and opt for plain language. Use short sentences and bullet points where appropriate.

Professional Typography: Choose a clean and legible font such as Times New Roman or Arial. Maintain consistent font size and style throughout the document.

Layout and Structure: Employ a clear and logical layout with consistent headings and subheadings. Use white space effectively to enhance readability.

Visual Hierarchy: Use bold formatting or underlining to emphasize important terms and conditions.

Consistency: Maintain a consistent design aesthetic throughout the document, including font, spacing, and formatting.

Essential Content Elements

Agreement Parties

Clearly identify the parties involved in the agreement, including the full legal names of the real estate agent and the brokerage.

Specify the agent’s role (e.g., licensed real estate agent, independent contractor) and the brokerage’s business structure (e.g., corporation, LLC).

Commission Split Structure

Outline the basic commission split percentage, such as a standard split for all transactions or a tiered structure based on sales volume or experience level.

Clearly define the commission calculation method (e.g., based on gross commission income, net commission income, or other factors).

Address commission splits for different types of transactions (e.g., residential, commercial, rental).

Additional Compensation

Specify any additional compensation arrangements, such as bonuses, overrides, or car allowances.

Clearly outline the criteria for earning these additional compensation amounts.

Expenses and Deductions

Detail the responsibilities for covering transaction-related expenses (e.g., marketing, advertising, closing costs).

Specify how office expenses, technology fees, and other overhead costs will be shared.

Clearly outline any deductions from the agent’s commission (e.g., desk fees, E&O insurance).

Dispute Resolution

Include a clause outlining the process for resolving disputes between the agent and the brokerage.

Consider options such as mediation, arbitration, or litigation.

Term and Termination

Specify the duration of the agreement (e.g., one year, month-to-month).

Outline the conditions under which either party can terminate the agreement.

Address the handling of pending transactions upon termination.

Confidentiality

Include a confidentiality clause to protect sensitive information related to the brokerage and its clients.

Entire Agreement

State that the agreement constitutes the entire understanding between the parties and supersedes any prior agreements or representations.

Governing Law

Specify the governing law that will be applicable to the agreement.

Signatures

Provide designated spaces for the signatures of both the real estate agent and a authorized representative of the brokerage.

Dates

Include the date the agreement is signed by both parties.

Additional Considerations

Review and Update: Regularly review and update the agreement to reflect changes in market conditions, brokerage policies, or legal requirements.

Seek Legal Counsel: Consult with an attorney to ensure the agreement complies with applicable laws and regulations and adequately protects the interests of both parties.

Customization: Tailor the agreement to the specific needs and circumstances of the real estate brokerage and its agents.

By carefully considering these design elements and content components, you can create a professional and effective real estate commission split agreement template that builds trust and protects the interests of all parties involved.

Remember to replace the placeholder text with specific information relevant to your brokerage and the real estate market in your area.