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In the context of real estate, market allocation refers to the practice where competitors agree not to compete in specific geographic areas or with certain customers. This can take various forms, from non-compete agreements between brokerage firms to more covert arrangements.
Mar 5, 2021 · What is a Market-Allocation Agreement? When competitors divide a market in which they can compete into sections in which one or more competitors decline to compete in favor of others, they have entered into a market-allocation agreement.
- Spin-Off
- Split-Off
- Split-Up
- Carve-Out
- Taxation
First let’s define what is a corporate spin-off; a spin-off is when a new company is created from the subsidiary or division of an existing (parent) company. The parent company creates a completely separate entity and issues new shares of the new entity to its existing shareholders. One of the most prominent recent examples, was the spin-off of Pay...
Again, let’s define what is a corporate split-off; a split-off is when a new entity is created from the parent company and shareholders of the parent company exchange their shares for the newly created entity. One notable example is the split-off of Synchrony Financial (SYF) from its parent General Electric (GE) on November 17, 2015. Synchrony Fina...
In the previous two examples, the parent company either gives shares of a new company to existing shareholders or allows existing shareholders to exchange their shares for the new company. In both instances, the parent company survives as a standalone company. In a split-up, the parent company is split into two or more entities, but the parent comp...
Another corporate action is a carve-out which is essentially when a parent company creates a new corporation and sells shares of that new corporation through an IPO (Initial Public Offering). No shares are given to or exchanged with existing shareholders. In 2009, Las Vegas Sands did a carve-out of its Sands China subsidiary into a new entity to ra...
As with any corporate action, it is important to understand the tax implications, especially cost-basis which is the key variable when calculating capital gains taxes. The taxation of spin-offs, split-offs, and split-ups is governed by Internal Revenue Code 355 (IRC 355). Generally speaking, such events are not taxable when they occur if the compan...
Feb 3, 2023 · What is a Waterfall Model in Real Estate? First of all, what exactly is a “waterfall” when it comes to cash flow distributions? An investment waterfall is a method of splitting profits among partners in a transaction that allows for profits to follow an uneven distribution.
May 2, 2024 · Real estate agent commission splits determine how earnings from property transactions are divided between agents and their brokerages. These splits can vary significantly, reflecting different business models and individual agreements, and play a crucial role in shaping a real estate agent’s salary , financial success, and career satisfaction.
Sep 6, 2022 · Learn how a commission split works in real estate, how it affects the agent-broker relationship, and how it compares to other compensation methods in the field.
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What is a real estate commission split?
What is an example of a split-up?
What is a 60/40 Commission split?
What are the different types of commission splits?
Aug 9, 2023 · A real estate commission split is the percentage of earnings agents and brokers receive when they assist a buyer, seller, or renter in closing on a property. There are various types and ranges of commission agreements, with standard models paying 60% to 70% to agents and high-split models paying 90% to 100%. The split is heavily influenced by ...
