Let’s use an example

Let’s use an example of a $300,000 home and a six percent commission and there is an agent that represents the seller and one that represents the buyer. At the close of escrow, from the proceeds of the sale of the property, the escrow company will write a check to both agents for $9,000. Then, at some offices, the agent pays a split of the commission to the broker. The broker is usually the owner of the individual company that the agent works for. The split that goes to the broker is used to pay for the broker’s overhead. Say there is an agent who splits his commission with the broker on an 80/20 level, and then the agent would keep $7,200 of the total. From this money, the agent pays for advertising expenses, errors and omissions insurance as well as gas for driving the client to houses to see and many other expenses that occurred along the way not to mention his time.