How to split a commission between agents, with worked examples

Most disputes inside an agency are about money that was agreed verbally. A split that is written down before the deal closes, with a percentage for every person, removes most of them.

What the commission is

On a sale, many agencies charge a percentage from the buyer, the seller or both; around 1% from each side is common, but it varies by city, property type and negotiation. On a rental, the commission is usually counted in months of rent, often one month. Whatever the rate, agree it with the client in writing before the deal moves.

Common ways to split it

• Agency share first: the agency keeps a fixed percentage for the office, and the rest goes to the agents on the deal.
• Listing side and selling side: the agent who brought the property and the agent who brought the buyer each get a share.
• Referral share: a smaller percentage for whoever passed on the lead, inside or outside the agency.

Worked example: a sale

A house sells for PKR 2,50,00,000 (2.5 crore). The agency charges 1% to the buyer and 1% to the seller, so the total commission is PKR 5,00,000. The agency keeps 20% and the listing and selling agents split the rest equally.

Worked example: a rental with a referral

A flat rents for PKR 1,20,000 a month and the commission is one month's rent. An outside agent referred the tenant for 10%. The agency keeps 30% and the agent who closed it gets 60%.

What to write down for every deal

1. The total commission and how it was calculated (rate and price, or months of rent).
2. Each person's share as a percentage, adding up to exactly 100%.
3. When each person is paid: at bayana, at transfer, or after the full commission is received.
4. What happens if the deal falls through after part of the commission is collected.