How are commissions divided between real estate agents?
There are real estate brokers and real estate agents, who in Texas must be licensed by the state. A REALTOR® is an agent or broker that is also a member of the National Association of REALTORS® and must abide by NAR’s strict Code of Ethics. An agent must be sponsored by a broker for a period of at least 2 years and must complete educational requirements of 900 classroom hours, as well as, pass the state required broker’s exam before being eligible to receive a broker’s license. Of course, by law, commissions are negotiable. Meaning real estate brokers can’t all get together and set commission rates (this is called collusion). However, the traditional way of thinking is the 6% commission rates with some pushing for 7%. In the traditional real estate transaction, commissions can be split 4 ways. A) the listing agent who took the listing, B) the broker who sponsors the listing agent, C) the buyer’s agent who brought the buyer, and D) the broker who sponsors the buyer’s agent. In the follo
