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Abstract
The commission split between real estate agents and their affiliated firms represents an important incentive mechanism. A study of 1,477 agents indicates that total commission revenue generated during the year affects the subsequent commission rate more than volume of residential sales or transactions. Profit sharing and independent franchise firms offer higher ending commission splits while larger firms offer lower commission splits. The ending commission split for commission agents compared to agents on a 100% payout contract, however, is not influenced as much by profit sharing, firm characteristics, and the economic environment.