Does the broker who holds a realtor's license profit when the realtor sells a house and makes a commission?

In this scenario, the realtor is an independant contractor but their license is held by the broker and the broker maintains an office where the realtor meets with clients and uses their facilities. There is probably some arrangement where the realtor helps pay for overhead but I'm curious if it would be standard for the broker to share in any commissions earned by the realtor.

What incentive does the broker have to oversee or manage the activities of the realtor, particularly if the realtor makes a mistake or even breaks the law and commits fraud in the sale of a piece of real estate?

Absolutely. The real estate agent and broker usually have a contract to share the sales commission. Typically, the broker gets 1% and the agent gets 2% from which he/she may pay expenses (advertising, signs, lock boxes, etc.). Sometimes the broker share pays for some expenses.

The broker usually shares a greater burden of responsibility if legal problems arise from the sale.

Some Real Estate agents pay a fee to the broker to have an office and all the amenities that go with it . Others split commissions with the broker, it depends on the franchise rules or independant owner of the company. I found it most common with real estate brokers to offer to there salespeople a split of 50/50 or 60/40.

Here is how the relation ship works.

You have a Real Estate Brokerage firm who names a Broker-in-Charge.

You have a Licensed Real Estate Salesperson.

In every state, a Real Estate Salesperson CANNOT sell real estate without hanging their license UNDER a supervising broker. The broker is responsible for that Realtor for conducting business within the realms of the law and the rules of the firm.

The Real Estate Salesperson, in exchange for the supervising and being able to use the company logo's, etc...pays a commission split.

Legally ALL LISTINGS AND BUYING CONTRACTS belong to the FIRM..NOT to the sales person.

So when the commission is paid out, it's paid to the firm, who splits it, according to a pre-arranged contract, with the salesperson.

Real Estate salesperson's can lose their licenses for accepting money directly.