What your split has to pay for after you get it

Your split's only job is to cover what your brokerage does not. So the comparison that decides your income is never one percentage against another — it is the same list of expenses, priced twice.

If you are on a high-split plan and weighing an offer with a lower one, you have probably been asked to compare two percentages. That comparison is the one that feels like math and is not. It leaves out the column that decides the answer: everything each arrangement leaves on your side of the table.

This post hands you that column. It is a blank worksheet you can fill in tonight, a worked example with invented numbers so you can see it done once, and a short formula for how many closings a higher split needs before it pays for itself. You do not need anyone's split, including ours, to use any of it.

Why comparing two percentages is the wrong question

A split tells you how a cheque gets divided. It does not tell you what the cheque has to buy after it arrives.

An agent keeping 100% who then pays for their own postage, pop-bys, signs, coaching, transaction coordinator, MLS access, forms software and conference travel is not keeping 100% of anything. They are keeping 100% of the gross and then paying for a business out of it. That can be the right arrangement. It just is not the arrangement the percentage describes.

The honest question is not "what's your split?" It is "what does my split have to pay for after I get it?" Answer that for two brokerages and you have compared them properly. Skip it and you have compared two numbers that were never measuring the same thing.

In the first post in this series we looked at why this goes unnoticed. In the second we built the statement it comes from. This is where the two meet.

Let's do the math

The formula is one line, in plain English:

Real Net = GCI × your split − what you pay out of pocket each year − brokerage fees

Run it once for where you are now and once for anywhere you are considering. The worksheet below is the whole tool. The first column comes from the statement you built in Post 2. The second column comes from the brokerage you are talking to — and if they will not help you fill it in, that tells you something too.

Two rules make this faster than it looks.

First, a line that is the same in both columns cancels out. If you pay your own board dues at both brokerages, you can leave that line blank on both sides and the comparison does not change. You only need exact figures for the lines that differ. This is also why you do not need a published dues figure for Central Arkansas to use this worksheet — only your own.

Second, price the line, not the promise. "We provide marketing support" is not a figure. Postage, mailers, a monthly print newsletter and a set number of pop-bys a month are. If a brokerage describes something it covers, ask what it is in units you can price, and write down what it would cost you to buy the same thing yourself.

A worked example, so you can see it done once

Here is the worksheet filled in for one invented agent, comparing two invented brokerages. The numbers are round on purpose. Do not borrow them — the only numbers that answer your question are yours.

In this example, the lower split wins by $2,700. That is not the lesson.

The lesson is how easily it flips. Suppose this same agent does not use a coach and does not go to a conference. Take those three lines out of Brokerage A's column — $7,400 in all — and the 100% split wins by $4,700. Same agent, same production, opposite answer, because of choices that have nothing to do with the split.

That is also the line most agents forget: conference travel and hotel. The ticket gets counted because it came with a receipt. The flight, the nights, the rental car and the meals get remembered as "the conference," singular, and often cost two or three times the ticket. Go and check yours before you trust your total.

How many closings does a higher split need?

There is a tidy way to ask the question directly. A higher split earns you a little more on every closing. A lower-split brokerage that covers more of your costs saves you a fixed amount every year. At some number of closings, those two meet.

Break-even closings = difference in fixed annual costs ÷ (extra split per closing − per-closing costs only you would pay)

In the example, the difference in fixed annual costs is $21,300. The 30-point split difference on a $6,000 side is worth $1,800 per closing, less the $250 transaction coordinator fee Brokerage A's agent pays on every file, which leaves $1,550. Divide: $21,300 ÷ $1,550 is about 13.7, so the 100% split pulls ahead from the fourteenth closing. At twelve closings it loses; at fourteen it wins by $400; at fifteen by $1,950.

So a higher split really does get better the more you close, and for a high-volume agent who genuinely does not need what a fuller brokerage provides, it can be the right answer. The next post in this series takes that case seriously, including what happens to the same arithmetic in a year that goes the other way.

What our side of the worksheet looks like

If you want to price us, here is what goes in our column, and what does not.

Our structure: a tiered split based on annual production volume, with four published thresholds at $3 million, $5 million, $7 million and $10 million. No cap. One monthly fee. No per-transaction fee other than E&O, and no franchise fee, because we are independent. Your last twelve months of production places you on the ladder — you do not start over because the name on your card changed.

What you pay, in the same breath: E&O, charged per transaction. Board and association dues. Listing photography and video — unless I advance that cost and recover it from the commission at closing, which I will do for any agent who lands a listing and does not have the cash to market it.

What the brokerage covers: MLS access, Form Simplicity, a BoldTrail seat and headshots. A full-time transaction coordinator. All postage and mailing supplies, a monthly print newsletter, a monthly email newsletter and weekly branded emails. Five branded pop-bys a month, client gifts, signs, lockboxes, business cards, apparel and color copies. At least four client events a year. Daily coaching from a Tom Ferry coach and a weekly one-on-one, plus a ticket and accommodations for Tom Ferry Summit and Elite Retreat.

We do not publish the percentages or the monthly fee. That is deliberate and it is the argument of this post: a percentage on a page, with nothing attached to it, invites exactly the comparison this worksheet exists to replace. The figures are yours for the asking, plugged into your own worksheet, below.

We are not the cheapest option in Central Arkansas and we do not try to be. For some agents the worksheet will say so. That is a correct result and you should believe it.

What happens next

Fill in the first column tonight, from the statement you built in Post 2. If you have not built that yet, the first column is the reason to. Then fill in the second column for whoever you are considering, and ask them for any line you cannot price.

Before any of it, read your own independent contractor agreement and your policy manual. They govern fees, withholdings and what happens to work in progress, and they override anything anyone tells you in a conversation about moving — ours included.

If the worksheet says stay, stay. You will have spent an evening and learned exactly what your business costs, which is worth having whatever you decide. For the one-time cost of a move, as distinct from the running cost, what switching brokerages actually costs in Arkansas runs a separate worksheet.

Frequently asked questions

How do I compare two brokerage offers when the splits are different?

Price the same expense list under both. List every annual cost you would carry, fill in what each brokerage covers and what it leaves to you, then apply the formula: GCI times split, minus out-of-pocket, minus fees. Lines that are the same at both cancel out. The split alone cannot answer the question.

How many closings does it take for a higher split to pay for itself?

Divide the difference in fixed annual costs by the extra split you earn per closing, after subtracting any per-closing cost only the higher-split agent pays. The result is the break-even closing count. Below it the lower split wins; above it the higher split does. It moves every time your overhead does.

Which line do agents forget to count when they compare splits?

Conference travel and hotel. The ticket gets counted because it has a receipt with a price on it. Flights, nights, rental car and meals get remembered as "the conference," and together they often run two or three times the ticket. Check your card statements for the dates of the event.

If I join your Maumelle brokerage, does my production somewhere else count toward my tier?

Yes. It is a rule, not a negotiation: your last twelve months of production places you on our ladder, which has four published thresholds at $3 million, $5 million, $7 million and $10 million, with no cap. You do not restart at the bottom because you changed firms.

Who pays for MLS access, forms and board dues at Arkansas Property Management?

The brokerage pays for MLS access, Form Simplicity and your BoldTrail seat. You pay your own board and association dues, E&O per transaction, and listing photography and video unless we advance that cost against your closing. Put those three in your column; they are the lines we charge to you.

Are you the cheapest brokerage in Central Arkansas?

No, and we do not try to be. For a self-sufficient agent who does not need coaching, a transaction coordinator or marketing supplies, a high-split model can cost less, and the worksheet will show it. We compete on what the fee covers, not on the fee. Run the numbers and believe the result.

Does the worksheet count the time I spend on paperwork?

No. It counts dollars only, which is its main limitation. Hours spent on transaction paperwork, ordering signs or assembling pop-bys are real and they are not on the table. If a brokerage takes work off your plate, decide for yourself what those hours are worth and add them.

About the author

Amanda Galbraith is the Principal Broker and owner of Arkansas Property Management & Real Estate in Maumelle. She taught public school mathematics for twenty-three years before real estate became full-time work, which is why every recruiting conversation here starts with a worksheet rather than a pitch.

This post is general information for licensed Arkansas agents, not legal, tax or financial advice. All figures in the worked example are invented for illustration and describe no real brokerage or agent. Your independent contractor agreement and your brokerage's policy manual govern your own situation — read them, and do not take anything here as advice to act against them. Nothing here is a guarantee of income or production.

Arkansas Property Management & Real Estate | 501.851.7771 | www.ar-property.com