In Alberta, the typical combined real estate commission or fees of both the buyer and seller agents is 7% for the first $100K of home’s price and 3% of the remaining balance above $100K. It is usually split 50/50 between the buyer’s and seller’s agents.
There is no “standard” commission rate as the Canadian Real Estate Association (CREA) Pledge of Competition states that each real estate agent has the flexibility to set their commission rates based on the services they provide to their clients.
The above chart demonstrates the following: 7% for the first $100K of home’s price a 3% of the remaining balance above $100K. A 5% tax is applied to the total commission.
Buyers don’t usually pay any commission directly to their agents. Instead, the buyer’s agent’s commission comes from the total commission charged to the seller. Most of the time, this is 50% of the total commission. Some buyer’s agents are willing to give a portion of their commission back to their clients as a cashback rebate. On WOWA.ca, you can find agents who are willing to pay cashback. A buyer may have to pay a commission to their buyer agent if they agreed on a commission beforehand and none is provided by the seller, but this is rare and unlikely to happen.
The typical commission for the seller’s agent, or listing agent, is 50% of the total commission. This rate is negotiable, and some agents offer alternative fixed-rate or lower commissions. The real estate agent commissions are usually reflective of the range and level of services your agent will provide you. Before you start working with an agent, check with your agent to ensure that they offer the level of service you require. If you are looking to save money during the selling process, you can search for agents with lower real estate commission.
The seller of the home will usually pay the real estate agent commission. When a home is listed, the seller will decide on the gross commission they are willing to pay and how it will be split between the buyer and seller agents. This commission will then be paid out by lawyers after the transaction has been completed.
Typically, the seller will cover both the commission for both agents. In rare cases, if the seller lists the property by themselves or chooses not to give a buyer agent commission, the buyer may have to pay their agent the difference. However, such cases are rare and real estate agents will generally let you know beforehand if it is the case.
Real estate agent commissions are high because the commission is split between many different parties and the real estate agent has to cover any marketing expenses even if the home doesn’t sell. The agent may have to pay upfront for professional photography, mail marketing materials, supplies, and much more. Your agent works very hard behind the scenes to ensure that you are getting the best price for your property and in some cases, a higher commission can mean better marketing for your home.
There is no formal rule or regulation that sets the commission rate. According to the CREA Pledge of Competition, each agent can set their commission rate/fee. Although the commission will vary from agent to agent, it will be close to the average commission for the area. Real estate commissions are negotiable. Details about your agent’s commission will be outlined in the contract you sign when hiring an agent.
Yes! Like most other service fees, you can negotiate the commission with your agent. The commission makes up the largest portion of your selling costs, so it always makes sense to check and negotiate the commission of different real estate agents when selling a property. On WOWA.ca, you can check real estate agent commissions.
Flat-fee commissions can seem like a great way to save money, especially since they are usually cheaper than equivalent percentage-based commissions. However, the quality and quantity of services offered with flat-fee packages are often much lower. You may have to stage and market the home yourself, and you will still have to pay a buyer’s agent commission.
Yes. Real estate agent commission is paid only when the property is sold, even if the property has been listed for a long time. Also, some sellers may choose to self-list their properties and not offer a commission to buyer agents. We do not recommend this as doing so could reduce the likelihood of your property being sold.
A double-ended deal is when one agent represents both the seller and the buyer. In this case, the agent will get the full amount of the commission. This can happen if the buyer directly contacts and works with the seller’s agent after finding the listing without consulting an agent of their own. However, this is not recommended due to potential conflicts of interest. Agents are required to tell you in advance if they are double-ending a commission.
There are many additional closing costs involved in selling a home including lawyer fees, penalties from closing out a mortgage too early, as well as legal fees.
No. Alberta’s real estate commissions are average when compared to other provinces in Canada.
Real estate commissions follow different structures in each province. In Ontario and Manitoba, the real estate commission is typically charged as a percentage of the selling price of the home. For instance, Ontario real estate commission is typically 5% with a 2.5% fixed commission for the buyer agent.
In comparison, the real estate commissions in Alberta, British Columbia, and Saskatchewan are calculated based on a graduated scale. This means that a specific percentage is charged for the first $100K and a different percentage is used to calculate the commission for the remainder of the transaction value. For example, Saskatchewan real estate commission is typically 6% for the first $100K, 4% for the second $100K, and 2% on the remaining sale price of the home.
The average total real estate commission for different provinces is compared in the table below. The average selling prices of homes varies from province to province and is an important factor that determines the total commission you will pay in a dollar amount. The total commission is the commission rate multiplied by the selling price of the home.
|Province||Typical Real Estate Commmission Rate||Average Sold Prices of Homes in September 2020||Average Total commission Paid to Both Agents|
|Alberta||7% for 1st $100K and 3% for the remaining balance||$403,163||$16,095|
|Ontario||5% of total price||$741,395||$37,070|
|B.C. (Greater Vancouver Area)||7% for 1st $100K and 2.5% for the remaining balance||$801,039||$24,526|
|Saskatchewan||6% for 1st $100K, 4% for the 2nd $100K, and 2% for the remaining balance||$403,163||$16,095|
|Manitoba||5% of the total price||$308,689||$15,434|
|Quebec||5% of the total price||$477,609||$23,880|
|Nova Scotia||$1,500 flat fee for properties under $25,000, and 5% of the total price for other properties||$319,726||$15,986|
|New Brunswick||5% of the total price||$203,907||$10,195|
|Prince Edward Island||5% of the total price||$300,538||$15,778|
|Newfoundland and Labrador||5% of the total price||$249,368||$13,091|
Ontario and British Columbia have some of the highest housing prices, which results in higher average total real estate commissions. Although British Columbia’s real estate commission rates are one of the lowest in the country, homeowners ultimately end up paying a comparatively higher real estate commission due to the higher average selling price of homes.