Q: I am looking to buy on Vashon but I'd like to work with my Seattle real estate agent.

We've worked together on a couple of sales and I really like him. He told me that he's not familiar with the market here and with issues that might be important. He suggested a referral to someone here. I don't know how that works. I also don't know how commissions work. He said he could get part of the commission when I buy over here but I just don't get it.

A: Referrals are common in real estate. For instance, I recently had an investor who wanted to buy a small apartment building. We don't have anything like that available so I referred him to an agent I really trust on the Kitsap Peninsula. That agent found my client a good deal and I received a small part of his commission when the transaction closed.

I applaud your Seattle agent for realizing that he probably doesn't know our market well enough to properly represent you. He's also probably not knowledgeable about things like septic systems, wells and critical areas. Teaming up with a local agent familiar with all of that will be better for you.

As for the commission disbursement it commonly goes something like this: the commission is divided, often about half and half, between the listing agency and the selling agency. Then each agency pays out any referral fees due to referral companies or to other agents. Next, they often pay out franchise fees to the parent corporation (like Windermere or John L. Scott) and may also pay in a small amount to a non-profit arm of the corporation for community and charitable work.

Last, each agency pays a portion of the remaining commission to the agent that actually did the transaction. The amount of that "split" is based on company policy and is very flexible. Agencies may set the percentage of the split by number of transactions the agent has done during the year, or by years of service, educational background or other criteria.