How is commission typically divided between an associate and a broker?

Commission is typically divided between an associate and a broker based on a pre-established agreement between the two parties. This agreement specifies the percentage of the commission that the associate will receive for closing a deal, which often reflects the level of service provided, the associate's experience, and the overall structure of the brokerage.

In typical real estate practice, the associate usually does not keep all of the commission or give it all to the broker; instead, a collaborative arrangement helps to incentivize the associate while providing the broker with a share that supports the operational and administrative functions of the brokerage. This structure fosters a productive relationship, ensuring that both parties are motivated to succeed within the real estate market.

Understanding this division is crucial for associates as it impacts their income and the financial health of the brokerage as well.