What Is a CDA in Real Estate? Commission Disbursement Authorization Explained

CDA stands for commission disbursement authorization. In real estate, a CDA is the brokerage's signed instruction to the closing agent (title, escrow or closing attorney) saying how the commission from a sale is paid out: the gross commission, each payee and amount, such as referral fees, franchise fees, the agent's split and a TC fee, and the payment instructions. It's sent before closing.

More on this topic: TC and brokerage operations, every guide in one place.

Without it, the closing agent may not know who to pay or may send the whole commission to the brokerage. Here's what goes on a CDA, who handles it, and how to avoid the mistakes that hold up commission. Closingbird generates the CDA from the file; see Closingbird for brokerages.

Key takeaways

• The CDA is written by the brokerage and signed by the broker or an authorized signer.
• It goes to the closing agent before closing, so they can pay commission when the deal funds.
• It must match the final price and every agreed split, referral and fee. Amendments are the usual trap.
• Only pay who the law allows. Paying an unlicensed person for an act that needs a license is prohibited in states such as California.
• California regulators warned in 2025 about CDAs used to pay brokers' own expenses or unlicensed parties.

What does CDA stand for in real estate?

CDA stands for commission disbursement authorization. You'll also see it called a disbursement authorization (DA) or, at brokerages that renamed it after the 2024 NAR settlement, a compensation disbursement authorization; they mean the same document. It authorizes the title company, escrow company or closing attorney to disburse the commission from the sale proceeds to the people listed, in the amounts listed, so the CDA is how a real estate commission actually gets paid at closing.

It isn't a contract between buyer and seller, and it doesn't set the commission. The commission comes from the listing or buyer agreement; the CDA tells the closing agent how to split and pay it.

What's on a CDA

Who prepares, signs and sends it

• Prepares: usually the brokerage's office or accounting staff, the agent, or a transaction coordinator working from the broker's split information.
• Signs: the broker or another signer the brokerage authorizes.
• Receives: the escrow officer, title officer or closing attorney handling the closing.
• When: before closing, ideally once the price and closing date are final, so the closing agent can include it in their figures.

How to create a CDA, step by step

1. Confirm the final sale price, including any price change in an amendment.
2. Confirm your side's commission from the agreement: a percentage of price or a flat amount.
3. List every payee in the order they're paid: referral, franchise, agent and team splits, TC fee, transaction fee, other.
4. Check each payee may lawfully be paid under your state's rules, and that referral agreements are on file.
5. Calculate each amount and the brokerage's remainder; check that the lines add up to the gross commission.
6. Add the closing agent's details and any payment instructions.
7. Have the broker or authorized signer sign it.
8. Send it to the closing agent, and confirm they received it.
9. When the money arrives, record the date and amount received and reconcile it against the CDA.

Before the broker signs, check the math: the free real estate commission calculator works out the side's commission from the price, as a percentage or a flat fee, then takes off a referral fee, the broker's split and per-deal fees to show the agent's net.

Common CDA mistakes

• Using the original price after an amendment changed it.
• Forgetting a referral fee or franchise fee, so the agent's split is overpaid.
• Rounding errors, so the lines don't add up to the gross commission.
• Sending it too late for the closing agent to include.
• A payee who isn't allowed to receive commission under state rules.
• Using the CDA to pay things that aren't commission. California's DFPI and DRE issued a joint bulletin on June 30, 2025 about CDAs directing escrow to pay brokers' personal or business expenses or unlicensed parties.

Capped plans are where split errors hide, because the deal that crosses the cap is split at two rates. The free commission split calculator runs an agent's deals in order and shows which one crosses it.

Can a transaction coordinator fee go on the CDA?

Often, if the brokerage, the agent and the closing agent agree and your state allows it. It's a convenient way for an agent to pay their TC at closing, but it isn't universal: some closing agents and brokerages prefer the agent pays the TC directly. Agree how you'll be paid in your TC agreement, and see how much transaction coordinators charge.

Creating a CDA in Closingbird

In the transaction's Commission card, enter your side's commission as a percentage of price or a flat amount, name the brokerage, and add payees in order: referral fee, franchise fee, agent split, team split, TC fee, transaction fee or other, each as a percentage of gross or a flat amount. Add any instructions for escrow, then click Create CDA to generate the PDF on the file (the transaction needs a purchase price first) and email it to escrow. When the money arrives, mark it received with the date and amount. Only admins and coordinators can edit commission; agents see it read-only. Full steps are in Commission and the CDA, and an overview in Closingbird for brokerages.

Frequently asked questions

What is a CDA in real estate?

A commission disbursement authorization: the brokerage's signed instruction to the closing agent on how to pay the commission from a sale, listing each payee, amount and payment instruction.

What does CDA stand for in real estate?

Commission disbursement authorization. Some brokerages now say compensation disbursement authorization, and it's sometimes shortened to disbursement authorization (DA).

What is a disbursement authorization in real estate?

Another name for the CDA: the broker's written authorization for the title company, escrow company or closing attorney to pay the commission from closing to the listed payees.

Who signs the commission disbursement authorization?

The broker or another person the brokerage authorizes to sign. Agents and TCs may prepare it, but it carries the broker's authorization.

When is a CDA sent?

Before closing, once the price and commission are final, so the title or escrow company can pay commission when the deal funds.

Who prepares the CDA?

It varies by brokerage: office or accounting staff, the agent, or a transaction coordinator, working from the broker's split and fee information.

What happens if the CDA is wrong?

Commission can be paid to the wrong people or in the wrong amounts, and fixing it after funding is slow. Check the price, splits and fees against the final documents before signing.

Run it in Closingbird

Record the split and payouts on the file, generate the CDA as a PDF, email it to escrow and track what's received. Start a free trial (14-day free trial, no credit card required) or see pricing.

Related reading

• Broker compliance file review checklist
• How much do transaction coordinators charge?
• Transaction coordinator job description
• Closingbird vs BoldTrail BackOffice (Brokermint)
• Help: commission and the CDA

Sources

Checked in October 2026. Rules and prices change, and many vary by state, so confirm with the source, your state's real estate commission or your broker before you rely on them.

• Paperless Pipeline: how to create a commission disbursement authorization (2026, vendor-published)
• California Department of Real Estate: Broker Self-Evaluation Compliance Checklist (RE 540, rev. 5/26)
• California DFPI: Escrow Law archive (DFPI and DRE joint bulletin on commission disbursement authorizations, June 30, 2025)