What Is a Real Estate Brokerage Cap?
A cap limits how much of your commission a brokerage takes in a year. Here is how caps work and what to check before you count on one.
What a Cap Is
A cap is a ceiling on the total commission split you pay your brokerage in a year. You pay the split on each closing until your payments reach the cap amount. After that, the split stops and you keep the full commission on the rest of your closings for that cap year.
A Simple Example
Say a brokerage has an 80/20 split and a cap of $10,000. On every closing, 20% of your commission goes to the brokerage until those payments total $10,000. Once they do, the 20% stops until your cap year resets. These figures are an illustration only. Every brokerage sets its own split and cap.
What Often Keeps Charging After You Cap
Capping stops the percentage split, but it does not always stop the fees. Depending on the brokerage, you may still pay:
- A per transaction fee on every closing
- Monthly or annual fees
- Technology or desk fees
- Risk management fees
- Franchise or royalty fees
Ask for the full post-cap fee list in writing. It is the part of a capped plan that is easiest to miss.
When the Cap Resets
Most caps reset once a year. Many reset on your anniversary date with the brokerage rather than on January 1, which matters if your business is seasonal. Confirm the reset date before you join.
Capped Split vs Flat Fee
A capped split charges you a percentage until you reach the cap, so the cost depends on how much you close and when in your cap year you close it. A flat fee brokerage skips the split entirely and charges the same known fees from your first closing.
Resident Realty has no cap, because there is no split to cap. You keep 100% of your commission and pay either $50 a month plus $300 per transaction side, or $249 a month with no transaction fee.
How to Compare
Take your last twelve months of closings and work out what each option would have cost you in total: the split up to the cap, plus every fee before and after. Then do the same with Resident Realty's flat fees on the compare fees page.
Frequently Asked Questions
Keep Reading
- What Does 100% Commission Mean for Real Estate Agents?
- How Do Real Estate Brokerage Fees Work?
- Resident Realty vs Traditional Brokerage Splits
- 100% Commission Brokerage Comparison: How the Models Differ
- Compare the Resident Realty plans with your own numbers
- 100% Commission vs. Traditional Splits: What You Actually Keep
Keep 100% of Your Commission
Two plans, no percentage split, licensed in Colorado, Arizona and Texas.