How Realtor Commissions Are Split in Texas

How Is a Real Estate Commission Split?

When you pay a real estate commission in Texas, that money doesn’t go to one person, it gets divided between the listing side and the buyer’s side, then between each brokerage and their individual agent. On a typical transaction, four parties get a piece. Understanding where the money goes helps you understand why some agents resist negotiation — and why a 1% listing brokerage can still provide full service.

The Four-Way Split

Here’s how a $400,000 home sale breaks down with a traditional 3% listing commission and 2.5% buyer agent compensation:

That $22,000 comes out of your sale proceeds at closing. The title company distributes it to the two brokerages, and each brokerage then pays their agent according to their internal split agreement.

The listing agent in this example keeps $8,400 — not $12,000. And that’s before taxes and expenses.

What the Agent Actually Keeps

After the brokerage split, the agent still has to cover:

• Self-employment taxes — roughly 15% since agents are independent contractors
• MLS and association dues — HAR brokerage MLS account runs over $1,900/year, plus NAR and TAR dues
• Supra eKey — $16.50/month for electronic lockbox access
• E&O insurance — errors and omissions coverage, required by most brokerages
• Marketing and lead generation — website, ads, signs, materials
• Continuing education — required to maintain their license in Texas

On that $8,400 commission check, after the brokerage split takes 30%, taxes take 15%, and annual expenses are spread across transactions, the agent might net $4,500-5,500. On a deal that took 45 days from listing to close and required 30-40+ hours of their time — and most of that work happens where sellers never see it. Coordinating with the title company, chasing lenders for updates, reviewing contracts and paperwork before every client call so you’re prepared and up to speed, responding to emails and phone calls from the other side. The goal is to be a duck — calm on the surface, paddling like hell underneath.

This isn’t to make you feel bad for agents — it’s to help you understand the economics. The agent doesn’t pocket the full percentage you see on the listing agreement. That’s important context when you’re evaluating what different commission rates mean.

Sell your home for just 1% commission.

Listing Side vs Buyer Side

These are two separate commissions, and the 2024 NAR settlement made that more explicit than ever.

Listing commission: This is what you agree to in the listing agreement before your home goes on the market. It’s paid to the listing brokerage at closing. In Houston, this ranges from 1% (Creekstone) to 3% (traditional brokerages).

Buyer agent compensation: This is what you offer to the buyer’s agent for bringing a qualified buyer. It’s offered through MLS and is negotiable. Most Houston sellers still offer 2-3% to buyer’s agents, but since the NAR settlement, it’s no longer assumed or bundled — it’s a separate, explicit decision.

You control both numbers. The listing commission is set in your listing agreement. The buyer agent compensation is your choice. For a deeper look at who’s responsible for what, see who pays realtor fees in Texas.

How the 2024 NAR Settlement Changed Things

The NAR settlement didn’t change the math of how commissions are split — it changed the transparency around how they’re negotiated.

Before the settlement, many sellers assumed commissions were non-negotiable and that the 6% total was “just how it works.” Buyer agent compensation was essentially baked in and rarely questioned.

After the settlement:

• Buyer agent compensation is no longer automatically displayed on MLS in some markets
• Buyers are required to sign representation agreements with their agents before touring homes
• Commission is explicitly framed as negotiable, not standard

In practice, the Houston market hasn’t changed dramatically. Most sellers still offer buyer agent compensation because not offering it shrinks your buyer pool. But the conversation around what you pay and why has shifted — and more sellers are questioning the listing side, which is where 1% brokerages like Creekstone offer the most savings.

For the full breakdown of commission in Texas, see do you really have to pay 6%?

Common Agent-Brokerage Split Arrangements

Not all agents have the same deal with their brokerage. Here’s what’s out there:

Traditional Splits (50/50 to 80/20)

New agents often start at 50/50 — the brokerage keeps half of every commission. As agents gain experience and produce more volume, they negotiate better splits — 60/40, 70/30, even 80/20. The brokerage provides office space, brand recognition, training, and leads. The agent provides the labor.

Franchise Fees

If the brokerage is part of a national franchise — Keller Williams, RE/MAX, Coldwell Banker, etc. — there’s often a franchise fee on top of the split. This is typically 6-8% of the agent’s gross commission, taken off the top before anything else. So on a $12,000 listing commission, the franchise takes $720-960 first, then the brokerage and agent split what’s left. An agent on a “70/30 split” at a franchise brokerage is really keeping less than 65% of the original commission once the franchise fee comes out.

Cap Models

Some brokerages cap the amount the agent pays per year. Once the agent hits the cap (say $20,000 in brokerage fees for the year), they keep 100% of their commission minus a small per-transaction fee. This model attracts high-producing agents.

100% Commission / Desk Fee

The agent keeps 100% of their commission and pays the brokerage a flat monthly desk fee — typically $500-1,500/month — plus a per-transaction fee ($300-700). No split. This works for experienced agents who don’t need training or brokerage-provided leads.

Team Splits

An agent working on a team gives a percentage of their share to the team lead — typically 30-50%. So on a 3% commission at a brokerage with a 70/30 split, the team agent might keep: 3% → brokerage takes 30% ($3,600) → team lead takes 35% of remainder ($2,940) → agent keeps $5,460 on a $400K sale. That’s why newer agents on teams can be the most resistant to commission negotiation — they’re already keeping the smallest piece.

Sell your home for just 1% commission.

How a 1% Listing Changes the Math

Same $400,000 home, 1% listing commission instead of 3%:

The savings come entirely from the listing side. The buyer side is separate and unchanged — you still offer whatever buyer agent compensation you choose.

At a 1% brokerage with low overhead, the broker’s take-home on a $4,000 commission is actually comparable to what a traditional agent nets on a $12,000 commission after brokerage splits, franchise fees, and expenses. The difference is where the $8,000 savings goes — into your pocket instead of into brokerage overhead.

For a full breakdown of selling costs beyond commission, see how much it costs to sell a house in Houston.

What Sellers Need to Know

The commission you pay doesn’t all go to one person. It gets divided four ways, and the agent handling your listing often keeps less than half of the percentage you see on the listing agreement. Understanding this helps you:

1. See why commission is negotiable — the published rate is the brokerage’s rate, not a fixed industry standard
2. Evaluate whether a higher commission buys you better service — often it doesn’t
3. Understand why a 1% full-service brokerage can offer the same service at a lower rate
4. Make an informed decision about buyer agent compensation — it’s your choice, not a requirement

Sell your home for just 1% commission.

Related Seller Guides

• Discount Realtor Houston: Full-Service Listing for 1%
• Who Pays Realtor Fees in Texas?
• Do You Really Have to Pay 6% to Sell Your House?
• Lowest Commission Realtors in Houston
• How Much Does It Cost to Sell a House in Houston?
• Limited Service vs Full Service Listing in Texas
• How Can a Realtor Charge 1% and Still Provide Full Service?