What Is a CDA in Real Estate?
Commission Disbursement Authorization explained — what it is, who signs it, and how it gets paid at closing.
A CDA— Commission Disbursement Authorization — is the written instruction from a real estate broker to a title company that says: "here's how to pay out the commission at closing." It itemizes each payee and each amount, so the settlement agent can disburse correctly without the brokerage having to handle internal payouts after the deal closes.
Most transaction coordinators draft the CDA. Most brokers sign it. Most title companies expect it 2–3 days before closing. This guide covers exactly how it works.
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Quick Definition
A Commission Disbursement Authorization (CDA) is a written instruction from a broker authorizing the title company or settlement agent to pay out commission at closing per a specified breakdown of payees and amounts.
Without a CDA, the title company won't disburse commission. So even though the document feels routine, missing it on closing day grinds the whole deal to a halt. TCs ship the CDA on time so closing day is uneventful.
When Brokers Issue a CDA
Four common scenarios.
Cooperating Broker (Co-Op) Sale
The most common scenario. Listing broker has the cooperating commission in their listing agreement. Once the deal is clear-to-close, the listing broker issues a CDA to the settlement agent authorizing payment of the buyer's side commission directly to the buyer's broker (rather than routing through the listing brokerage).
Single-Side Representation
Even on a single-side deal, brokers issue a CDA to the title or escrow company so disbursement is itemized correctly: agent split, TC fee, referral fees, etc. Cleaner audit trail than a single lump-sum check.
Multi-Agent Splits
When two or more agents from the same brokerage worked the deal (e.g., team lead + buyer's agent), the CDA itemizes who gets what so the brokerage doesn't have to handle internal disbursement after closing.
Referral Fee Payments
When a referring agent or relocation company is owed a slice of the commission, the CDA names them as a payee and instructs the title company to wire their portion directly. This avoids the referring party chasing payment from the brokerage post-close.
Who Signs the CDA
Broker of Record
Required signer. The broker is the only party legally entitled to commission under state law. Without their signature, the CDA isn't valid and the title company won't honor it.
Selling Agent / Listing Agent
Often signs as the agent of record on the deal — confirming the disbursement breakdown matches their compensation agreement with the brokerage. Signature requirement varies by brokerage.
Settlement Agent / Title Company
Receives the CDA, verifies it against the closing statement, and issues funds per the disbursement instructions. Does not "sign" the CDA but acknowledges receipt and acts on it.
Transaction Coordinator
Often drafts the CDA on behalf of the broker, then routes it for broker signature and delivers it to title. The TC is not a signer but is the operational hub for getting the CDA produced and delivered on time.
CDA vs. Commission Demand Letter
CDA
Routine operational document, issued for nearly every closing. Standard workflow. Drafted by TC, signed by broker, delivered to title 2–3 days before closing.
Commission Demand Letter
Escalation document, issued when there's a dispute over commission entitlement or the title company is reluctant to pay. Formal legal correspondence — usually drafted with a real estate attorney.
Anatomy of a CDA
The eight fields you'll find on virtually every CDA.
Brokerage Information
Listing brokerage (or buyer brokerage) name, license number, and contact information for the firm authorized to receive disbursement.
Property Address
Full legal address of the property at the center of the transaction. Must match the purchase contract exactly.
Buyer & Seller Names
Full legal names as they appear on the contract. Used by the settlement agent to match the file.
Closing Date
Scheduled or actual closing date. Anchors when the disbursement will occur.
Total Commission Amount
Gross commission for the side the CDA covers — typically 2.5–3% of sale price for one side, but always per the listing agreement.
Disbursement Breakdown
Itemized list of who gets what: brokerage, agent, transaction coordinator fee, referral fee, marketing reimbursements, etc. Each line totals back to the gross commission.
Payee Details
For each recipient: legal name, mailing address, and (for direct ACH or wire) banking instructions. Some brokerages disburse to the firm only, then pay out internally.
Broker Signature
Authorization from the broker of record (or designated managing broker). The broker is the party legally entitled to commission per state law — only they can authorize disbursement.
How Disbursement Happens at Closing
From CDA generation to commission landing in agent bank accounts — the five-step flow.
Pre-closing — Broker generates CDA
Once the deal is clear-to-close (typically 3–5 days before closing day), the broker (or their TC) generates the CDA listing every payee and amount. Pulled from the listing agreement, agent comp plan, and any referral or TC fee agreements.
Pre-closing — Broker signs and TC delivers to title
The broker signs (often electronically). The TC delivers the signed CDA to the settlement agent, typically by email with a wire-instruction confirmation request.
Closing day — Settlement agent reconciles
Title company verifies the total CDA amount matches the commission line on the seller's closing disclosure. If there's a mismatch, they call the broker before disbursing.
Closing day — Funds wire to each payee
Settlement agent issues wire transfers (or checks) to each payee per the CDA. Brokerage gets one wire (most common), or each payee gets a direct wire if the CDA instructs that.
Post-closing — Brokerage internal disbursement
If the brokerage received a single lump sum, they then disburse internally to agents, TCs, and referral parties per the CDA breakdown — typically within 24–48 hours of closing.
For the full closing-day timeline, see our real estate transaction process guide and the closing timeline calculator.
Free CDA Template
Download a CDA template you can fill in for any closing. Includes all eight standard fields plus a multi-payee disbursement table.
Or use DocJacket to auto-generate CDAs from your transaction data.
Frequently Asked Questions
What is a CDA in real estate?
A CDA — Commission Disbursement Authorization — is a written instruction from a real estate broker to a title company or settlement agent, authorizing how the commission earned on a transaction should be paid out at closing. The CDA itemizes each payee (brokerage, agent, TC, referral parties) and each amount, ensuring the title company disburses funds correctly without the brokerage having to handle internal payouts post-close.
Who creates the CDA?
The broker of record is legally responsible for the CDA, but in practice it's usually drafted by the listing agent's transaction coordinator, then signed by the broker. The TC pulls payee data from the listing agreement, the agent's compensation plan, and any referral or TC-fee agreements, assembles the breakdown, and routes for broker signature 3–5 days before closing.
Who signs a CDA?
The broker of record's signature is required — they're the only party legally entitled to commission under state law. Some brokerages also require the agent of record to sign, confirming the disbursement matches their compensation agreement. The settlement agent (title company) doesn't sign, but acknowledges receipt and acts on the CDA at closing.
What's the difference between a CDA and a commission demand letter?
A CDA is the standard, expected disbursement instruction issued for nearly every closing — it's a routine operational document. A commission demand letter is escalation: it's issued when a broker believes they're owed commission but the title company is reluctant to pay, or when there's a dispute over commission entitlement. Demand letters are formal legal correspondence; CDAs are workflow documents.
When is the CDA due to the title company?
Best practice is to deliver the signed CDA to the settlement agent at least 2–3 business days before closing. This gives the title company time to reconcile the CDA amount against the seller's closing disclosure. Late CDAs are a top cause of closing-day delays — the settlement agent can't disburse without one.
Can a CDA be amended after it's sent to title?
Yes. If a referral fee comes in late, an agent split changes, or a payee detail needs correction, the broker issues a revised CDA marked clearly as a replacement (or an addendum). The settlement agent uses the most recent signed version. Always confirm receipt of the revised CDA in writing — don't assume an emailed update was processed.
Does the buyer or seller see the CDA?
Generally, no. The CDA is between the broker and the settlement agent, and the disbursement amounts appear (in summary) on the closing disclosure as commission lines — but the full payee breakdown isn't shared with buyer or seller. Some states or brokerages may disclose more, but it's not a buyer/seller-facing document by default.
Is a CDA legally required?
A CDA itself isn't required by state law in most states — but the practical reality is that title companies won't disburse commission without written instructions from the broker, and the CDA is the standard form for those instructions. Some brokerages use CDAs alongside or in place of older instruments like commission demand letters or commission release authorizations.
How does a TC use software to manage CDAs?
Modern TC software like DocJacket pulls payee and commission data directly from the contract and listing agreement, auto-generates the CDA from a template, routes it for e-signature, and tracks delivery to the settlement agent. The CDA becomes part of the transaction file with timestamps and audit trail — much faster than the old PDF-and-email workflow.
Stop hand-typing CDAs.
DocJacket auto-generates CDAs from your contract data, routes for broker e-signature, and tracks delivery to the title company. Audit trail included.