Real estate commission in Ontario is negotiable. There is no standard rate, no regulated rate, and no rate anyone is allowed to set on the industry’s behalf. What exists instead is a range that gets quoted often enough that people mistake it for a rule.
Here is how the money actually works, what the commonly quoted numbers mean, and the questions worth asking before you sign anything.
Who pays
In a conventional Ontario resale transaction, the seller pays the commission out of the sale proceeds on closing. That total is then split between the brokerage that listed the property and the brokerage that brought the buyer.
Buyers frequently conclude from this that representation is free. It isn’t — it is priced into the transaction, and it is agreed in a buyer representation agreement that sets out what the buyer’s brokerage is owed and who is expected to pay it. Read that document. It is short and it is the one that determines your exposure if a deal is structured unusually.
What people actually pay
The figure quoted most often in Ontario is 5% of the sale price, typically split between the listing and cooperating brokerages. In practice most transactions land somewhere between roughly 3.5% and 5%, with the lower end more common at higher price points, and full-service, discount and flat-fee models all operate legally in this province.
It is also a live question nationally. The Competition Bureau has an open investigation into whether the commission rules of the Canadian Real Estate Association and a British Columbia board breach the Competition Act. Nothing has been decided, and nothing about it changes what you are free to negotiate today.
On top of the commission, HST applies to the fee. It is not charged on the sale price of a resale home, but it is charged on the commission, and it surprises people at the lawyer’s office more often than it should.
Nobody in Ontario is permitted to tell you what commission “should” be. Any agent who describes a rate as standard is describing their own rate.
Where the money goes
Worth understanding, because it explains why the number is what it is. The commission a seller pays is not what an agent takes home. Out of it come:
- The cooperating brokerage’s share — usually close to half, before anything else
- The listing brokerage’s split with its agent
- Photography, floor plans, video, staging, print, and paid promotion
- Board and association dues, insurance, licensing, and administration
The practical consequence is that a lower headline rate is often a lower marketing budget rather than a discount, and the difference tends to show up in the sale price. Sometimes that trade is worth making. It should at least be a conscious one.
The comparison people get wrong
Sellers routinely compare commission rates and stop there. The number that matters is what lands in your account on closing, which is the sale price minus the fee — and the two are not independent.
A one percent difference in commission on a $1,500,000 home is $15,000. A one percent difference in sale price is also $15,000. If cutting the fee costs you a week of preparation, a professional photographer, and a properly run offer process, the saving is easy to lose.
The right question is not “what do you charge.” It is “what will you do, and what has it achieved on homes like mine.”
What else comes out of a sale
Commission is the largest closing cost for most Ontario sellers, but it isn’t the only one:
- Legal fees and disbursements — typically a modest four-figure sum for a straightforward resale
- Mortgage discharge, and prepayment penalties if you’re breaking a term early. On a fixed mortgage this can be significant — get the number from your lender in writing before you list
- Adjustments for property taxes and utilities already paid
- Status certificate, if you’re selling a condominium — ten days to produce, and capped at $100 including HST
- Moving, storage, and any pre-list preparation you take on
Buyers have a separate and often larger surprise waiting: in Toronto you pay both the Ontario and the municipal land transfer tax. Two of them, on the same purchase. First-time buyers can claim rebates against both, which is the single most valuable thing a first-time buyer in this city can know.
What to ask before you sign a listing agreement
Five questions that will tell you more than any rate comparison:
- What exactly is included, and what would I be billed for separately? Get photography, staging, floor plans, and promotion named specifically.
- What is being offered to the cooperating brokerage? This affects how your listing is treated by the agents bringing buyers.
- How long is the term, and how do I get out of it? Length and cancellation terms are negotiable and frequently more important than the rate.
- What happens if I find the buyer myself? Ask now, in writing, not later.
- Show me the last five homes you sold like mine. List price, sale price, days on market. This is the answer that actually predicts your outcome.
Common questions
Is real estate commission negotiable in Ontario?
Yes. Commission has never been set by law or regulation in Ontario, and no organisation is permitted to set a rate on the industry’s behalf. Any rate described to you as standard is that brokerage’s own rate.
What is the typical commission rate in Toronto?
Five per cent is the figure quoted most often, usually split between the listing and cooperating brokerages. In practice transactions land roughly between 3.5% and 5%, with the lower end more common at higher price points.
Who pays the commission, the buyer or the seller?
In a conventional Ontario resale, the seller pays it out of the proceeds on closing, and it is then split between the two brokerages. Buyers should still read their buyer representation agreement, which sets out what their brokerage is owed and who is expected to pay it.
Is HST charged on real estate commission?
Yes. HST does not apply to the sale price of a resale home, but it does apply to the commission, which catches people out at the lawyer’s office.
Does a lower commission mean I net more?
Not necessarily. What matters is the sale price minus the fee, and the two are not independent. On a $1,500,000 home, one per cent of commission and one per cent of sale price are the same $15,000.
What should I ask before signing a listing agreement?
What is included and what is billed separately, what is being offered to the cooperating brokerage, the length of the term and how to get out of it, what happens if you find the buyer yourself, and the last five comparable homes that brokerage sold with list price, sale price and days on market.
Our position
We quote our fee openly at the listing appointment, we put what it buys in writing, and we are happy to be compared. What we won’t do is quietly fund a lower fee by cutting the marketing budget on your home. If the plan changes, you will see it change, because on the Bathurst corridor the difference between a well-run listing and an adequate one is measured in tens of thousands of dollars, not in fee percentage points.
If you want a straight conversation about what selling your home would actually net you — fee, closing costs, and a realistic price, with the arithmetic shown — book a home evaluation. No obligation and no pressure to list.
General information for Ontario homeowners, not legal or financial advice. Commissions are negotiable and vary by brokerage. Confirm all figures with your brokerage, lawyer, and lender for your own transaction.
