What does a commission cap mean in real estate?

A cap is the most a brokerage collects from an agent through commission splits in a year. Once the agent pays in that amount, they keep close to 100% of further commissions, minus any small fees, until the cap resets.

What happens after you cap?

You keep nearly all of each commission for the rest of your cap year, so every additional deal is worth more. Many agents push hardest right after capping for that reason.

When does a real estate cap reset?

Usually on the agent's anniversary date with the brokerage or on the calendar year, depending on the plan. At reset, the cap starts over and splits return to the starting tier.

What is the difference between a cap and a tier?

A tier (or graduated split) raises your percentage once you pass a production threshold. A cap is the total a brokerage collects in a year, after which you keep close to 100%. Many plans use both.

Are real estate commissions capped?

Some brokerage plans cap what the agent pays the brokerage each year; others do not. The cap, the split that leads to it, and the reset date all vary by brokerage, so always confirm the full plan.