Ontario Real Estate Commission Calculator 2020

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What Are Real Estate Commissions?

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Real estate commissions are the fees you pay to your real estate agent for their services. It is usually calculated as a percentage of the selling price of the property. In Ontario, the standard real estate agent commission is 5% of the property price plus HST, but in practice, the commission can range anywhere from 3.5% to 5%. The total commission will be divided between the buyer and seller agents, where the buyer's portion is typically fixed at 2.5%.

Ontario Real Estate Commission

%
attach_money
You will pay around...
$14,12514k
5%
total commission
Buying Agent Commission
$12,50013k
Selling Agent Commission
$00
13% HST
$1,6251.63k
The seller of the property will pay for both buying and selling agents' commission. For example, if the seller agent commission is 2.5% and the buyer agent commission is 2.5%, you will pay a total commission of 5%.

Ontario Real Estate Commission FAQ

What is the average real estate agent commission in Ontario?

The average combined real estate agent commission is 3.5% to 5% of the total selling price, which is then split between the buyer’s and seller’s agents. Higher commissions are possible, but the typical rate is 5%. The buyer's portion is usually fixed at 2.5% (+HST) and the seller's portion is variable depending on the rate negotiated. For example, if the total combined rate is set at 4%, then the buyer agent gets 2.5% and the seller will get 1.5%.

$750,000 Property Selling Price Example

~$707,625
~$37,500
~$4,875
You Receive
Buyer+Seller Agent Commission
HST on Commission
Check the Real Estate Commissions of Ontario Agents
Check the Real Estate Commissions of Ontario Agents

As a seller can I negotiate the real estate agent fees?

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.

As a buyer, can I negotiate the real estate agent fees?

Typically no, since you are not paying your agent directly and they are paid by the seller. However, some agents are willing to give a portion of their commission back to buyers as a cashback rebate after closing. For example, some agents will pay you up to 50% of their commission. If you purchased a house for $1,000,000 and your agents commission is 2.5%, they will earn $25,000. After closing, they will give you $12,500, which is 50% of their $25,000 commission, as a cashback rebate. Find out more about cashback rebate agents

What is the average real estate agent commission in Toronto?

The commission rates in Toronto are similar to the rates all accross Ontario, typically 3.5% to 5% of selling price. However, the real estate market in Toronto is highly competitive which could provide you with some incentives as a customer. Due to the high competition and the higher property prices, many Toronto real estate agents are providing incentives to their clients for both buyers and sellers.

For sellers, you may be able to negotiate a 1% commission rate bringing the combined real estate commission down to 3.5% (2.5% for the buyer agent and 1% for your seller agent). On WOWA, you can find experienced agents who are willing to list your property at lower than normal commission rates. Find a low commission agent here.

For buyers, you can now find cashback agents. What is a cashback real estate agent? Some agents offer up to 50% cashback on their 2.5% commission as a rebate when you use them to purchase a home. For example, if you purchase a $800,000 home your agent will earn 2.5% as commission, which is equal to $20,000. If the agent offers 30% cashback on their $20,000 commission, they will then give you $6,000 as a rebate after closing.

Top 1% Commission Agents in

Top 1% Commission Agents in

What is a one percent real estate agent?

Sometimes seller (listing) agents offer a discount to their client by reducing their commission fee. A one percent real estate agent or one percent REALTOR® is someone who charges only 1% commission to sell your home. The seller agent will get 1% (+HST), as promised, and the buyer agent will typically receive their standard 2.5% (+HST) commission rate, equalling a combined real estate commission rate of 3.5% (+HST).

What are the different types of commissions?

Depending on your real estate agent, the commission can be paid as one of the below two different forms:

  1. A percentage of the selling price
  2. A fixed or flat fee, also called a flat-fee substitute

Who pays the 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.

Do I have to pay taxes on the real estate agent commission?

Yes, the seller has the pay HST in Ontario on the real estate agent commission.

Why are commissions so high?

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. Although, like any service, you can negotiate. Many real estate agents are willing to lower their commission or even offer a cashback rebate.

Comparison of Real Estate Commission Across Provinces

ProvinceTypical Real Estate Commmission RateAverage Sold Prices of Homes in September 2020Average Total commission Paid to Both Agents
Alberta7% for 1st $100K and 3% for the remaining balance$403,163$16,095
Ontario5% 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
Housing market data was retrieved from the Canadian Real Estate Association.

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.

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How do you negotiate commissions?

negotiation-tips

Some simple tips:

  • Research: Know the market! What do other agents charge? What services does your agent provide? What's the value of your house? How easily will your home sell? A quick google search will provide you with plenty of information to make an informed decision. In fact, check low commission agents on WOWA.ca to see what other agents are charging.
  • Talk to more than one real estate agent: Like researching any product or service you should know your options, even if you have a real estate agent in mind. It is always a good idea to compare an agents experience and commission rates. You can do this by visiting WOWA's seller page.
  • Ask: After you have done your research, don't be afraid to strike up a conversation about commission. Use the research you've accumulated as leverage to show the agent you know what you're talking about. If they don't offer a low commission, see if they can provide cashback.
  • Don't get hung up on commission: Though it's nice to save some money, commission is only one of the many important factors to take into account when selecting an agent. Interview agents to get a sense of them as a whole package.

Who sets the commission rate?

There is no formal rule or regulation that sets the commission rate. Each agent can choose their own commission type and rate or 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.

Can I save with a flat-fee commission?

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.

Are there cases where the seller does not have to pay a real estate 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. In addition, some sellers may choose to self-list their properties and not offer a commission to buyer agents. Although, if you decided to list your property by yourself, we strongly recommend to pay the normal 2.5% commission to a buyer agent. This will help ensure that your property is being shown to potential buyers by their agents. As well, we only recommend listing a property yourself if you have experience in real estate (i.e. you have a done few real estate transactions yourself).

Ideally, instead of listing a home yourself to avoid commission fees, we would recommend hiring an experienced agent and negotiating. Offer to do most of the work like marketing, staging, etc. and the agent may be willing to lower the commission to 1%.

What is the commission on a pre-construction home?

The typical pre-construction commission rate is about 3% to 4% in the GTA but in some cases the rate could be lower than 3% or higher 4%. Many agents are offering cashback incentives on their earned commissions when selling pre-constructions. See above for information on cashback agents.

What does it mean to double-end a real estate commission?

A double-ended deal is when one real estate 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. The conflict being that the buyer and seller have different interests within the real estate transaction. For example, the seller of the home will want to sell a home for the maximum possible value. On the other side, the people buying a home will want to get the cheapest price possible. How can one agent protect both these conflicting interest? Agents are required to tell you in advance if they are double-ending a commission. In many parts of North America, this practice of dual agency real estate is illegal.

What are some restrictions on commission types in Ontario?

The Real Estate Council of Ontario (RECO) does not allow a commission type to vary based on the final selling price of a home. For example, you are not allowed to be charged a rate for a base amount and then an additional rate for the remainder. The rate has to remain the same for the full sale price.

It is also not permitted to have a different rate for the listing price and the final sale price.

Agents are allowed to base their commissions on how much they think the home will sell for. For example, a $400K home will have less commission than a $1M home if charged at the same rate. Agents can choose to charge a lower commission rate for the $1M home or a higher commission rate for a $400K home.

Other real estate fees

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.

For Sale by Owner (FSBO)

FSBO, or For Sale by Owner, is when a seller of a home lists and sells their property by themselves, without the services of a real estate agent. There are many tasks involved, such as listing, marketing, staging, and negotiating with the seller, so we recommend you pursue the FSBO option only if you have previous experience with real estate transactions.

How do I sell FSBO?

To maximize the number of potential buyers that view your home when you sell FSBO, we recommend that you:

  • Offer the buyer agent the standard commission of 2.5% so buyer agents will be willing to show your home to potential buyers
  • List your home online through FSBO sites such as For Sale by Owner Inc, Free2List, The Realty Commission, Prelist, PropertySold, and more
  • Get your home listed on the MLSⓇ (Multiple Listing Service) system

Flat Fee MLSⓇ Listing

MLSⓇ, also known as REALTOR.ca, is a property listing platform owned and operated by the Canadian Real Estate Association (CREA). It is the most widely used listing platform that real estate buyer agents use to find potential properties for buyers. Some FSBO websites are partnered with brokerages and allow you to list on MLSⓇ for a flat fee.

  • For Sale by Owner Inc. (FSBO Real Estate Inc.) allows you to list your property on their website for $325. For an additional $274 (total $599), your property will also be listed on MLSⓇ.
  • Times Realty Group Inc. (Times Realty) allows home sellers to list their property on MLSⓇ for up to 6 months for a flat fee of $350 plus HST. Real estate agents and buyers will be able to contact you through your listing on Times Realty.
  • FlatPrice is a real estate brokerage that offers flat fee listings in Ontario and British Columbia. FlatPrice has two options for the real estate sellers. The difference between the two options is that for Option 2 you don’t pay the listing fee until your house is sold. FlatPrice charges an initial set-up fee of $299 and an additional fee of $99 per month that your house is listed on MLSⓇ for Option 1 and $149 per month for Option 2.

Housing Markets Across Canada

Ontario Real Estate Agent FAQ

What are the different titles of real estate agents?

The most common titles for real estate agents are Sales Representative, Broker, and Broker of Record.

  • Sales representatives are anyone who has obtained a real estate licence from their respective regional governing body. They usually have to pass a set of courses and exams. In Ontario, the Real Estate Council of Ontario (RECO) oversees and administers real estate licenses.
  • Brokers are real estate specialists with additional qualifications that have passed a broker’s license exam. In Ontario, brokers are required to have at least two years of experience as a sales representative.
  • Brokers of record, also known as managing brokers, are brokers that manage and supervise a brokerage. They are responsible for making sure that the brokerage complies with all relevant regulations. While there can be many brokers working in the same brokerage, there can only be one broker of record.

Are there any differences in the skills of a sales representative compared to a broker?

Not necessarily. Many experienced real estate agents who specialize in buying and selling homes and dealing with clients do not apply to become brokers. While brokers usually have a minimum level of experience and take additional courses and exams to obtain a broker’s license, the broker’s license is only required for those who want to own or manage a real estate brokerage.

What is the difference between a real estate agent and a realtor?

Practically speaking, there is very little difference between a real estate agent and a realtor. The term REALTOR® is a trademark that is often used to refer to a real estate agent and almost all practicing real estate agents are also realtors. Legally, realtors are real estate agents that are either direct members of their provincial real estate association or have registered with the Canadian Real Estate Association (CREA). Realtors have to comply with the REALTOR® Code. All active real estate agents are licensed and have to comply with the rules and regulations of their provincial governing body.

How many real estate agents are there in Ontario?

Ontario has the most real estate agents in Canada with more than 79,000 real estate salespersons and brokers and 38 local real estate boards in Ontario. Of those 79,000 agents, over 56,000 are part of the Toronto Regional Real Estate Board (TREB). In Canada, there are over 130,000 real estate agents represented by the Canadian Real Estate Association (CREA).

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Ontario Real Estate Brokerage FAQ

What are the largest real estate brokerages in Ontario?

The largest real estate brokerages and franchises in Ontario are:

  • RE/MAX or Real Estate Maximums is an international real estate franchise headquartered in the US. They franchise their brand to over 120,000 agents in more than 100 countries and territories. RE/MAX first arrived in Canada in 1977 and is now the largest real estate franchise in Canada. In Ontario, some of the largest brokerages operating under the RE/MAX brand include RE/MAX Hallmark Realty Ltd., RE/MAX Realtron Realty Inc., RE/MAX Real Estate Centre Inc, RE/MAX West Realty Inc. and RE/MAX Realty Specialists Inc.
  • Royal LePage is a Canadian real estate franchise with over 600 locations and almost 18,000 agents. In Ontario, some of the largest brokerages operating under the Royal LePage brand include Royal LePage Signature Realty, Royal LePage Real Estate Services Ltd. and Royal LePage Your Community Realty.
  • HomeLife is a trademark of HomeLife Realty Services Limited, a Canadian real estate franchise with brokerages throughout Canada. In Ontario, some of the largest brokerages operating under the HomeLife brand include HomeLife/Miracle Realty Ltd, HomeLife Landmark Realty Inc. and HomeLife New World Realty Inc.
  • Century 21 is a global real estate franchise based in the US with over 122,000 real estate agents in 81 countries and territories worldwide. Century 21 opened its first Canadian office in B.C. in 1976 and now has over 400 offices throughout Canada. In Ontario, some of the largest brokerages operating under the Century 21 brand include Century 21 Leading Edge Realty Inc. and Century 21 People's Choice Realty Inc.
  • Keller Williams is a global real estate franchise with more than 180,000 agents worldwide. It is considered to be the largest real estate franchise in the world as well as the leader in the US by sales volume. Some of the largest brokerages in Ontario under the Keller Williams brand are Keller Williams Energy Real Estate and Keller Williams Realty Centres.
  • Right at Home Realty Inc. is Canada’s largest independent brokerage with 12 offices and over 5,000 members. Based in Toronto, it operates primarily in Ontario and is considered to be the largest brokerage in the province by both the number of agents and sales volume.
  • Sutton is a Canadian real estate franchise with over 7,500 real estate agents and 200 offices across Canada. Some of the largest brokerages in Ontario under the Sutton brand are Sutton Group-Admiral Realty Inc and Sutton Group-Heritage Realty Inc.
  • Ipro Realty is a Canadian real estate brokerage based in Brampton, Ontario with over 1,000 real estate agents.
  • PurpleBricks is a UK-based real estate company with brokerages in the UK, Canada, and Germany. They offer a fixed fee selling commission for their real estate services.
  • Coldwell Banker is an American real estate franchise owned by Realogy (NYSE: RLGY) with over 3,000 offices in 49 countries and territories. They were founded in 1906 and came to Canada in 1989.

What is a brokerage franchise?

Franchised real estate brokerages are brokerages that license and work under real estate brands like Century 21, Royal LePage, and RE/MAX. Many of the largest brokerages in Canada are franchised brokerages. Even though they may share the same brand name, franchised brokerages operate independently and may compete with other brokerages with the same brand.

Are there any differences between real estate agents from a brokerage like Century 21 and a smaller less-known brokerage?

The brokerage alone will not tell you how much value a particular agent can bring you. Brokerages can provide a brand name, but ultimately it’s your real estate agent that will do the work to help you buy or sell a property. You can find poorly-rated agents in brokerages of some of the largest real estate franchises and you can find highly experienced agents in less well-known brokerages.

Are real estate commissions the same between real estate brokerages?

Most brokerages in Ontario charge the standard commission of 2.5% for seller agents and 2.5% for buyer agents. However, many agents advertise lower commission packages for sellers and some give cashback rebates for buyers as an incentive to work with them. Some brokerages also offer similar lower commission packages for sellers. For example, One Percent Realty charges only 1% of the sale price plus a $950 fixed fee for sellers. You are more likely to find these agents in the GTA, where property prices are high enough so that a lower commission can still be in the tens of thousands, than other regions in Ontario.

Some brokerages also offer alternative commission types. PurpleBricks is a UK-based real estate company that charges a fixed fee of $2,999 in Ontario for listing homes. Due to their low cost, these brokerages may not offer the same services as a full-commission agent.

Compare agents with low commission on WOWA.ca

What is PropertyGuys.com?

PropertyGuys.com is a real estate marketing services company that sells listing and marketing packages for home sellers. They are not a real estate brokerage and do not provide real estate agent services but instead offer an alternative model where sellers are responsible for many of the tasks that real estate agents provide. They allow home sellers to self-list their homes on their website but do not provide any home preparation, staging, showing, or open house services. Sellers will also still be responsible for any buyer’s agent commissions, which are usually 2.5% of the home price in Ontario.

Real Estate License Ontario

To obtain a real estate license in Ontario, the Real Estate Council of Ontario (RECO) requires individuals to complete the Ontario Real Estate Salesperson Program. This program is currently being offered by Humber College and includes 3 steps to becoming a licensed real estate salesperson in Ontario. The cost for the Real Estate Salesperson Program at Humber College is approximately $5,025 + taxes and the registration with RECO for a new salesperson real estate license in Ontario costs $590 + taxes.

How to Get a Real Estate License in Ontario

There are 3 steps in the Real Estate Salesperson Program that will allow you to obtain a real estate license in Ontario:

  1. Pre-Registration Phase
  2. Registration with RECO
  3. Post-Registration Phase

Step 1: Pre-Registration Phase

The pre-registration phase of the Real Estate Salesperson Program includes 5 courses, 2 simulations, and 4 exams. The courses are self-directed and you have 24 months to complete the pre-registration phase. The maximum allotted duration is 21 months for the 5 courses, which gives you a maximum of 3 months to complete the exams and simulations.

Courses include:

  • Real Estate Essentials
  • Residential Real Estate Transactions
  • Additional Residential Real Estate Transactions
  • Commercial Real Estate
  • Getting Started

Step 2: Registration with RECO

After you complete the pre-registration phase, you will be able to register for a real estate salesperson license with RECO. This must be done within 1 year of completing the pre-registration phase.

Step 3: Post-Registration Phase

Within 2 years of registering your license with RECO, you will need to complete the post-registration phase to renew your real estate license. The post-registration phase requires you to complete a mandatory compliance course and two (2) out of five elective courses.

The elective courses available for you to choose from include:

  • Working in Real Estate: Rural, Recreational, Waterfront Properties
  • Working in Real Estate: Ownership Alternatives and Complexities
  • Real Estate as an Investment Strategy: Residential Properties
  • Real Estate as an Investment Strategy: Commercial Properties (Fundamentals)
  • Real Estate as an Investment Strategy: Commercial Properties (Advanced)

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This calculator is provided for general information purposes only. WOWA does not guarantee the accuracy of information shown and is not responsible for any consequences of the use of the calculator.