Commission Disbursement Authorization (CDA) Explained

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As a real estate transaction moves closer to closing, buyers sometimes see a document with a name that sounds financial and final: the Commission Disbursement Authorization, often referred to as a CDA.

At Real Estate Two70, we believe buyers should understand what this document is — and just as importantly, what it is not. This page explains what a CDA does, who prepares it, who signs it, and how it fits into the Idaho closing process.

What Is a Commission Disbursement Authorization?

A Commission Disbursement Authorization is a document that instructs the title or escrow company how to distribute real estate commissions from the funds collected at closing.

In simple terms, it tells escrow:

Which brokerage(s) are being paid
How much each brokerage receives
How commissions are split, if applicable

The CDA ensures that commission payments match the agreements already in place.

What a CDA Is Not

CDAs are often misunderstood.

They do not change the purchase price
They do not affect buyer or seller closing costs beyond what was already agreed
They do not renegotiate commissions
They are not a surprise fee added at the end

A CDA simply documents how previously agreed commissions are paid out.

Why Commission Disbursement Authorizations Exist

Title and escrow companies do not guess how commissions should be paid. They require written authorization from the brokerages involved.

CDAs exist to:

Prevent payment errors
Ensure compliance with brokerage agreements
Create a clear paper trail
Protect buyers, sellers, and brokers

Without a CDA, escrow cannot legally disburse commissions.

Who Prepares the CDA?

The CDA is typically prepared by the brokerage(s) involved in the transaction — not by the buyer or seller.

In Idaho transactions, this usually means:

The listing brokerage prepares their CDA
The buyer’s brokerage prepares their CDA

At Real Estate Two70, this is handled internally as part of our closing coordination.

Who Signs the CDA?

A CDA is signed by the broker of record or an authorized representative of the brokerage.

Buyers and sellers typically:

Do not sign the CDA
Do not approve commission splits
Do not need to take action on this document

This often surprises buyers — but it’s normal.

How the CDA Fits Into the Closing Timeline

The CDA usually appears:

After contract acceptance
Once commission amounts are finalized
Before the ALTA Settlement Statement is completed

Escrow uses the CDA to correctly reflect commissions on the final closing statements.

How Commissions Are Actually Paid

At closing:

Funds are collected by the title/escrow company
Commissions are paid to brokerages, not individual agents
Brokerages then pay agents according to their internal agreements

This structure is required by real estate licensing laws.

Common Buyer Concerns About CDAs

“Is this an extra fee?” — No. It reflects what was already agreed.
“Does this reduce my proceeds or increase my costs?” — No. The financial impact was established in the contract.
“Why am I seeing this now?” — Because escrow must finalize disbursements before closing.

How Real Estate Two70 Approaches CDAs

At Real Estate Two70, CDAs are handled as part of a transparent closing process.

We focus on:

Ensuring commissions match the contract
Delivering documents to escrow on time
Preventing last-minute confusion
Answering buyer questions clearly

Our goal is for buyers to understand what they’re seeing — without feeling pressured or rushed.

Frequently Asked Questions

Do buyers pay commissions directly?

No. Commissions are paid from closing funds through escrow.

Can commissions change after the CDA?

Only if all required parties agree in writing through proper amendments.

Will the CDA appear on my closing statement?

Yes. The results of the CDA are reflected on the ALTA Settlement Statement.

Should I review the CDA?

You can review it for understanding, but it typically does not require buyer action.