Everything you need to know before you sign — commission splits, transaction fees, monthly costs, revenue share, and the questions every new agent should ask before committing to a sponsoring broker.
Ron L. Miranda
Designated Broker & Founder, Texas Broker Sponsor™ · Licensed Broker Since 2012 · 16+ Years
Most new agents spend more time choosing their first car than they spend choosing their broker sponsor. That is a costly mistake. The broker you sign with on Day 1 determines how much of every commission check you keep, what fees you pay whether you close deals or not, and whether you are locked into a contract that penalizes you for leaving.
Over a 20-year career, the difference between a 70/30 split at a franchise brokerage and a flat-fee transaction model can exceed $600,000 in retained income. That is not a small decision. It is the most consequential financial choice you will make as a real estate professional — and most new agents make it without understanding the math.
This guide covers everything you need to know before you sign: what a broker sponsor actually does, how the different fee models work, what questions to ask, and what red flags to watch for.
Under Texas law (TREC), every licensed real estate sales agent must operate under the supervision of a licensed broker. You cannot legally represent buyers or sellers, write contracts, or collect commissions without an active broker sponsor. This is not optional — it is a legal requirement enforced by the Texas Real Estate Commission.
Your broker sponsor is responsible for your compliance with TREC rules, holds your license on file, and is legally accountable for your conduct in real estate transactions. In exchange for this oversight, the broker charges a fee — either as a percentage of your commissions (a split) or as a flat fee per transaction.
Key Point for Pre-License Agents
You can select and commit to a broker sponsor before you receive your license number. This means you can have your sponsorship agreement in place the day your license activates, so you can start your first transaction immediately — no waiting period, no scrambling to find a broker after passing your exam.
There are three primary fee structures in the Texas broker sponsorship market. Understanding the difference before you sign is essential.
The broker takes a percentage of every commission check you earn. Common splits range from 50/50 for new agents at Coldwell Banker to 70/30 at KW and Century 21, to 85/15 at Realty of America. Some brokerages also charge a 6% royalty fee on top of the split (KW), monthly desk fees ($50–$200/month), and technology fees ($25–$85/month).
| Split Model | $9K Commission | You Keep | Broker Gets |
|---|---|---|---|
| 50/50 (Coldwell Banker entry) | $9,000 | $4,500 | $4,500 |
| 70/30 (KW, Century 21) | $9,000 | $6,300 | $2,700 |
| 80/20 (RE/MAX RAPP) | $9,000 | $7,200 | $1,800 |
| 85/15 (Realty of America) | $9,000 | $7,650 | $1,350 |
Note: Split percentages do not include monthly fees, desk fees, technology fees, or royalty fees charged separately by many franchise brokerages.
Some brokerages use a hybrid model: you pay a split until you reach a "CAP" — a maximum annual payment to the broker — after which you keep 100% for the rest of the year. Sounds great in theory. The problem: most agents never hit their CAP.
The CAP Reality Check
KW's CAP is approximately $21,000/year. To hit it on a 70/30 split, you need to close roughly $700,000 in GCI — meaning you need to earn $700,000 in commissions before you see a single dollar of "100% commission." For most agents, the CAP is a marketing promise, not a financial reality.
A flat fee per closed transaction — the same dollar amount whether your commission was $3,000 or $30,000. No monthly fees. No splits. No CAP to hit. No royalty. You pay only when you close a deal, and the fee is the same regardless of the commission size.
This model is mathematically superior for any agent producing more than approximately 3–4 transactions per year. The higher your production, the larger the advantage over a split model.
Before you sign any sponsorship agreement, ask these questions and get written answers. A broker who cannot or will not answer them clearly is a red flag.
What is the exact commission split or transaction fee?
Get the specific percentage or dollar amount in writing. 'Competitive' is not an answer.
Are there monthly fees, desk fees, or technology fees?
Many brokerages charge $50–$200/month regardless of whether you close any deals. These add up to $600–$2,400/year before you earn a dollar.
Is there a royalty fee on top of the split?
KW charges a 6% royalty on every commission, separate from the 30% split. Always ask.
Is there a CAP, and what is it?
If there is a CAP, ask how many of their agents actually hit it last year. Request the number in writing.
What is the contract term and exit policy?
Some brokerages have 6–12 month lock-in periods or charge exit fees. Know before you sign.
What training or support is provided?
Distinguish between paid training (you pay for it) and included training. Many franchise 'training programs' are additional costs.
What is the broker's TREC license number?
Verify it at license.trec.texas.gov. Any legitimate broker will provide this immediately.
How long has the broker been licensed?
Experience matters for compliance oversight. A broker licensed for 2 years is not the same as one licensed for 16+ years.
Do you offer LLC or entity sponsorship?
If you ever want to operate under your own brand as an LLC brokerage, you need a sponsor who offers this service.
Can I see a sample sponsorship agreement before committing?
Any reputable broker will provide this. If they hesitate, walk away.
Vague fee language
"Competitive splits" or "industry-standard fees" without specific numbers means they do not want you to do the math before you sign.
Mandatory training fees
Some brokerages require you to pay for training courses as a condition of sponsorship. This is a revenue stream for them, not a benefit for you.
Revenue share recruitment pressure
If the first conversation is about recruiting other agents rather than your production, the brokerage's business model depends on recruitment, not real estate sales.
Long lock-in contracts
A 12-month contract with exit penalties is designed to trap you, not serve you. Flat-fee sponsors typically have no lock-in.
No published TREC license number
Every legitimate broker's license is public record at TREC. If a broker is reluctant to provide their license number, that is a serious warning sign.
If you are still in real estate school or waiting for your exam results, you can and should begin evaluating broker sponsors now. Here is why this matters:
Day 1 Readiness
Agents who have their sponsorship in place before their license activates can start their first transaction immediately. Agents who wait often lose 1–2 weeks finding a sponsor after passing.
No Pressure Decisions
Evaluating sponsors before you have a license means you are not making a rushed decision under time pressure. You can compare options carefully.
Pre-License Acceptance
Texas Broker Sponsor™ accepts pre-license applicants. You do not need a license number to request a pricing sheet or ask questions.
Start the Math Now
Understanding the fee model before you sign means you know exactly what you will keep from your first commission check — no surprises.
Yes. TREC requires every licensed real estate sales agent in Texas to be sponsored by a licensed broker. You cannot activate your license, conduct any real estate transactions, or legally represent buyers or sellers without an active broker sponsor. This is a legal requirement, not optional.
Yes. Many broker sponsors, including Texas Broker Sponsor™, accept pre-license applicants. You can select and commit to a sponsor before you receive your license number. This allows you to start your first deal the day your license activates, rather than losing days or weeks searching for a sponsor after passing.
A commission split means your broker takes a percentage of every commission check — typically 20–30%. On a $9,000 commission, a 30% split costs you $2,700. A transaction fee is a flat dollar amount per closed transaction regardless of commission size. On that same $9,000 deal, a flat transaction fee is the same whether the commission was $3,000 or $30,000.
Ask: (1) What is the exact commission split or transaction fee? (2) Are there monthly fees, desk fees, or technology fees? (3) Is there a CAP, and what happens after I hit it? (4) What is the contract term and exit policy? (5) What training or support is provided? (6) What is the broker's TREC license number and how long have they been licensed? (7) Do you offer LLC or entity sponsorship if I want to form my own brokerage brand?
It varies widely. Traditional franchise brokerages charge 20–30% of every commission plus monthly fees of $50–$200. Flat-fee sponsors like Texas Broker Sponsor™ charge a single transaction fee per closed deal with no monthly fees, no splits, and no caps. For an agent closing 10 transactions per year at $9,000 average commission, the difference between a 30% split and a flat fee can exceed $20,000 annually.
Revenue share programs (used by eXp Realty, Keller Williams, and others) pay you a percentage of the commissions earned by agents you recruit to the brokerage. According to eXp Realty's own 2024 income disclosure, 29% of eXp agents earned $0 in revenue share. According to KW's own data, less than 2% of agents ever earned $100,000 or more in lifetime profit share.
Ready to Get Sponsored?
New agents and pre-license applicants welcome. No license number required to request pricing. Ron reviews every application personally.
About the Author
Ron L. Miranda
Designated Broker & Founder, Texas Broker Sponsor™ · Licensed Broker Since 2012 · 16+ Years in Texas Real Estate
Ron is the founder of Texas Broker Sponsor™, the original flat-fee broker sponsorship company in Texas. Since 2012, he has helped thousands of licensed real estate agents maintain their TREC license under a sponsoring broker without the overhead of traditional split-based brokerages. Every article on this site is written or directly reviewed by Ron.