commission-split-and-cap-economics

name	commission-split-and-cap-economics
description	Model brokerage commission economics: compare split, cap, and fee models at an agent's expected GCI, compute company dollar per agent and the cap crossover point, and weigh the recruiting/retention trade-off. Commission rates and fees are business-agreement- and market-specific — verify-at-use. Not legal or tax advice.

Commission Split & Cap Economics

The commission model is the brokerage's biggest recurring recruiting lever. Model it on take-home and company dollar, not the headline split.

The loop

1. Start from the agent's expected GCI. Gross commission income per agent per year is the input everything else derives from. Model a realistic band, not a best case.
2. Lay the models side by side. Traverse the split-vs-cap tree in ../../knowledge/residential-brokerage-decision-trees.md:
   • Split — house takes a percentage of every deal (company dollar scales with production).
   • Cap — agent pays the split until a cap, then keeps ~100% (minus fees) for the rest of the year; company dollar plateaus at the cap.
   • Fee / desk — flat monthly or per-transaction fee; company dollar is roughly fixed per agent. Rates, caps, and fees are [verify-at-use] against the brokerage's agreements and the market.
3. Compute the crossover. Find the GCI at which the cap model's company dollar equals the split model's. Below it the split earns the house more; above it the cap does — which is exactly why high producers prefer a cap and want it.
4. Weigh recruiting vs retention. A model that pencils only for the house loses producers; one that pencils only for the agent starves the brokerage. Recruit and retain on the whole value stack, not the split alone (see ../../best-practices/recruit-and-retain-on-economics-and-support.md).

Metrics

Metric	Reads	Note
Company dollar per agent	house share after split/cap/fees	The brokerage's real revenue line
Cap crossover GCI	where cap company-dollar = split	Below it split wins the house; above it, cap
Agent retention rate	agents retained year over year	Falling -> the model or support is losing to a competitor

Anti-patterns

• Recruiting on a headline split the P&L can't sustain.
• Ignoring fees/desk costs when comparing take-home.
• Putting every agent on one model regardless of production tier.

See also

• ../transaction-timeline-management/SKILL.md.
• Best practice: ../../best-practices/recruit-and-retain-on-economics-and-support.md.
• Reference: ../../knowledge/residential-brokerage-reference-2026.md (commission norms, verify-at-use).