How should commissions be split between brokers?

The correct approach for splitting commissions between brokers is determined by the agreed amount discussed between the broker companies involved in the transaction. This reflects the reality of business negotiations where brokers may have different agreements and relationships, which can influence how they decide to split commissions based on various factors such as the level of service provided, the brokerage's policies, or specific agreements made before starting the transaction.

This flexibility allows brokers to negotiate terms that suit their business models and foster collaboration, ensuring that all parties feel fairly compensated for their contributions in the deal. It is key to document these agreements clearly to prevent misunderstandings and ensure a smooth transaction. Other methods, such as splitting commissions equally or using a state formula, may not take into consideration the specific circumstances of each situation, potentially leading to inequities or dissatisfaction among the parties involved.