In a real estate transaction, what does a split commission refer to?

A split commission in a real estate transaction specifically refers to the division of commission between the seller's broker and the selling broker. This arrangement typically occurs when a property is sold, and both brokers are involved in the transaction—one representing the seller and the other representing the buyer. In this scenario, the total commission earned from the sale is split between the two brokers based on a pre-agreed percentage.

Understanding this concept is important because it directly impacts how agents are compensated for their efforts in facilitating a real estate transaction. When the commission is split, both brokers are incentivized to ensure that the deal is closed smoothly, as their earnings depend on the successful completion of the transaction.

The other options do not accurately describe what a split commission entails. For example, the withholding of fees for inefficiency is unrelated to the concept of commission splits and does not factor into how commissions are structured in a typical real estate deal. Additionally, focusing solely on the buyer's broker or the total commission paid to the sellers does not capture the involvement and financial arrangement between the two brokers working in conjunction during a sale.