In real estate, what does the term "commission split" refer to?

The term "commission split" specifically refers to the division of the commission earned between brokers and agents. In real estate transactions, when a sale is made, a commission is generated, typically as a percentage of the sale price. This commission is then split between the listing broker and the cooperating broker, as well as between the brokers and their respective agents involved in the transaction.

Understanding the commission split is crucial for real estate professionals as it directly impacts their earnings and can influence the agent's motivation and relationship with their brokerage. The specifics of how this split is determined can vary significantly from one brokerage to another and may depend on factors such as experience, sales volume, or negotiated agreements.

In contrast, other options focus on aspects that do not define the commission split. The percentage of the sale price to be paid to agents pertains to how commissions are calculated but does not address the division aspect. Sharing commission with the buyer, while a possibility in some agreements, does not represent the internal workings of agent compensation. Lastly, the allocation of closing expenses relates to costs incurred during the transaction process rather than how commission earnings are shared among brokerage entities.