Allocations, or splits, are automatically added to a deal when it is created or people are added. The only people that receive allocations automatically are internal agents and outside brokerages.
An internal agent is an agent who belongs to the brokerage that owns the deal. When an internal agent is added to a deal an allocation is automatically created for them. Allocations are added when a deal is created or when an internal agent is added subsequently.
By default, allocations receive an even split of the side they are on: i.e. if there are three allocations on the list side, then each allocation receives a third of the list commission.
- Carlee, the agent, creates a new deal whose list commission is $1000.
- The new deal automatically has one allocation for Carlee for $1000.
- Carlee then adds her teammate Alden to the deal on the same side.
- The deal automatically adds an allocation for Alden, resulting in two allocations each receiving $500.
When an internal agent is removed, their allocations are also removed from the deal. However, if the agent has been paid out then they cannot be taken off the deal, as the record needs to be permanent.
The Outside Brokerage is the brokerage representing the other side of the deal; i.e. if it’s a list deal then the outside brokerage is on the sell side, and vice versa. Outside agents are agents that belong to outside brokerages.
Outside brokerages and agents only receive automatic allocations when the owning brokerage is holding the deposit, and the owning brokerage pays outside brokerages by default.
The user selects who holds the deposit for a deal when they create the deal. If the brokerage isn’t holding the deposit, then we know the brokerage won’t be paying out the outside brokerage.
However, if the owning brokerage is holding the deposit then it’s possible to pay out the outside brokerage. In this circumstance a brokerage setting determines whether to automatically create an allocation. The outside brokerage payable default setting for a brokerage decides whether or not to create an allocation in this scenario.