Real estate commission splits are always a hot topic in the real estate industry, along with franchise costs and models. Fundamentally the industry needs to change. It’s time agents were free from franchises and agreements and free to keep the commissions they generate.

Traditional franchise model

First, let’s look at the traditional agency franchise model that so many of us know.

Real estate franchise costs vary but typically include an up-front fee, commission payments in the range of 8–11% of gross sales income and fees for operational services. Typically, as the franchisee you pay onboarding costs alongside a monthly marketing fee; training and technology may or may not be included.

Marketing campaigns can be a mixed bag; state or nation-wide branding and promotions offer little direct benefit to the franchise holder, and you have no say on how the funds are spent. This can lead to additional fees being imposed by franchisees on their sales staff, for example, to process sales, or market them and the office.

In terms of real estate commissions, a 50:50 split is common. This can suit newcomers to the industry who can benefit from a wage and marketing costs held on credit until commissions are earned. Stronger sales performers usually command more, such as a 40:60 or 30:70 split in their favour.