Key Takeaways

  • Commissions in Ohio are fully negotiable between the parties - no fixed rates
  • Salespersons can only receive compensation through their sponsoring broker
  • Commission disputes do not delay closings; earnest money disputes may require court action
  • Brokers can share commissions with properly licensed brokers in other states
  • Referral fees to unlicensed persons are prohibited in Ohio
Last updated: January 2026

Commission and Compensation in Ohio

Understanding commission rules is essential for Ohio license law compliance.

Commission Basics

Negotiability

All real estate commissions are negotiable. There is no:

  • Standard commission rate
  • Minimum commission amount
  • Maximum commission cap
  • Rate set by Division or associations

Antitrust Warning: Discussing or agreeing on commission rates with competing brokers is illegal price-fixing. Each brokerage sets rates independently.

When Commission is Earned

A broker typically earns commission when they produce a buyer who is:

  • Ready - Prepared to enter into a contract
  • Willing - Wants to purchase on the seller's terms
  • Able - Has financial capacity to close

However, the specific terms are defined in the listing or buyer representation agreement.

Payment of Compensation

The Cardinal Rule

Salespersons can ONLY receive compensation from their sponsoring broker.

Payment FromPayment ToPermitted?
ClientSponsoring BrokerYes
BrokerTheir SalespersonYes
ClientSalesperson directlyNO
Other BrokerSalesperson directlyNO
Cooperating BrokerSalesperson directlyNO

Flow of Commission

  1. Closing occurs
  2. Seller (typically) pays listing broker
  3. Listing broker pays cooperating broker (if applicable)
  4. Each broker pays their affiliated agents

Consequences of Direct Payment

A salesperson receiving direct payment:

  • Violates Ohio license law
  • Subject to disciplinary action
  • May face license suspension

Commission Sharing

With Cooperating Brokers

Ohio brokers may share commissions with:

  • Other Ohio licensed brokers
  • Brokers licensed in other states (must be properly licensed there)
  • Other salespersons in the same brokerage (through the broker)

With Unlicensed Persons

Prohibited: Paying referral fees to unlicensed persons for:

  • Referring buyers or sellers
  • Providing leads
  • Introducing parties

Exception: Nominal gifts (not contingent on closing) may be permitted, but consult Division guidance.

Commission Disputes

Between Brokers

If two brokers dispute who earned a commission:

ProcessDetail
Transaction proceedsClosing is not delayed
Dispute resolutionHandled separately
ArbitrationMay be required by MLS rules
LitigationAs last resort

Earnest Money Disputes

When buyer and seller dispute earnest money:

  1. Broker holds funds
  2. Does NOT disburse without agreement
  3. May require court action (interpleader)
  4. Court determines rightful owner

Referral Fees

Permitted Referrals

TypeRequirement
Broker to brokerBoth must be licensed
In-stateOhio license required
Out-of-stateLicense in that state required
DisclosureMust be disclosed to all parties

Prohibited Referrals

TypeReason
To unlicensed personsViolates Ohio law
KickbacksIllegal inducement
Undisclosed paymentsMust disclose all compensation

Net Listings

Ohio does not prohibit net listings, but:

  • They are discouraged
  • Create conflict of interest
  • Must disclose to client
  • Full transparency required

Best Practice: Avoid net listings due to inherent conflicts.

Loading diagram...
Ohio Commission Payment Flow
Test Your Knowledge

Which statement about real estate commissions in Ohio is TRUE?

A
B
C
D
Test Your Knowledge

Can an Ohio broker pay a referral fee to an unlicensed person?

A
B
C
D