What Do Real Estate Agents Do in Canada?

WOWA Simply Know Your Options

All real estate agents will need to work in the best interests of their client if they operate exclusively as your listing agent or buyer's agent, but might not in a dual agency transaction. Your real estate agent will represent only your interests, and they will work to make sure your real estate transaction goes smoothly. Their roles and responsibilities will differ if they are working for the home seller or for the home buyer.

Reviews from previous clients are important when you're trying to find a reliable real estate agent. When looking at reviews to try to judge an agent's quality of service, you should focus less on their numerical ratings and more on their individual client reviews. Some websites that provide customer ratings and allow people to leave reviews include Facebook, Google, and Yelp.

Google Reviews allow anyone searching for the real estate agent to see reviews and leave their own reviews. Customers can also leave Facebook reviews on the real estate agent's business Facebook page. However, agents will often solicit their clients to leave reviews on these platforms, and some platforms allow customers to leave a numerical rating without any written review.

This makes it especially important for you to consider reviews from more than one source. One way to quickly see customer reviews from multiple sources is by using WOWA.ca, which shows real estate agents near you with ratings and reviews from Google and past clients. Having a list of local real estate agents and their customer reviews allow you to easily compare agents and brokers in your local area.

Real estate agents get paid a commission whenever they sell a home or help a buyer purchase a home. In Canada, real estate commissions are usually paid by the seller of the home. When a home is sold, the commission is taken off of the final sale price, which means that the proceeds to the seller from the sale of the home is reduced by the commission amount. For buyers, your buyer’s agent will receive a share of the commissions, which is called a cooperating commission. While buyers won’t have to directly pay their buyer’s agent, they will indirectly be paying for their services through the commission being built into the home price. This also means that if you choose to not purchase a home or sell your home, then your real estate agent will not be paid anything.

For most transactions, the real estate commissions will be a percentage of the selling price of the home, with this being shared between the buyer agent and listing agent at an agreed-upon commission split. Some listing agents may reduce their own share of the commission and give buyer’s agents a higher commission in order to attract them to your listing. Dual agents that represent both the buyer and seller will be able to keep the entire commission for themselves. Real estate agents will also need to split their commission with their broker. Once the buyer has paid for the home on the closing date, the listing brokerage will distribute commissions to the real estate agents that were part of the transaction.

Real estate commissions can be a percentage, a flat fee, or a combination of a percentage and flat fee. Some provinces also have tiered rates based on the price of the home. For example, real estate commissions in Ontario are usually 5% for the entire amount, while British Columbia real estate commissions are usually 7% on the first $100,000 and 2.5% on the remainder. Naturally, housing markets with higher home prices will lead to higher commissions for real estate agents.

The average selling price of a home in Toronto was $1,089,536 in June 2021, while the average price in Ottawa was $659,929. Given a 5% commission rate, the average commission for a home sold in Toronto would be $54,476 and the average commission in Ottawa would be $32,996.

However, larger markets with more lucrative commissions also attract more real estate agents that you will be competing with for clients. The Ottawa Real Estate Board (OREB) has 3,400 real estate agents and brokers in the Ottawa area. In June 2021, there were 2,132 home transactions in Ottawa. This is equivalent to 0.63 transactions per Ottawa real estate agent per month.

In comparison, the Toronto Regional Real Estate Board (TRREB) has 62,000 real estate agents and brokers in the Greater Toronto Area, with 11,106 transactions in the GTA in June 2021. This works out to be 0.18 transactions per Toronto real estate agent per month. Toronto real estate agents are fighting over almost double the average commission compared to Ottawa, but they have to contend with almost triple the competition with fewer transactions per agent when spread out evenly.

Tiered real estate commissions, commonly found in British Columbia, Alberta, and Saskatchewan, will have a higher rate on the first $100,000 and a lower rate on the remaining amount. In British Columbia, it’s usually 7% on the first $100,000 and 2.5% on the remainder. In Alberta and Saskatchewan, it’s usually 7% on the first $100,000 and 3.0% on the remainder. For a home that was sold for $500,000, your BC commission would be $7,000 on the first $100,000 and $10,000 on the remainder, for a total commission paid of $17,000.

Saskatchewan also has another method of calculating commissions, with 6% in the first $100,000, 4% on the next $100,000, and 2% on the remaining amount. For example, if a home is sold for $500,000, you will pay $6,000 for the first tier, $4,000 for the second tier, and $6,000 on the remainder. This gives a total commission of $16,000.

Commission Splits

Real estate agents work for a real estate brokerage, which will collect a portion of the agent’s commission. This split is usually 20% to 30% to the brokerage and 80% to 70% to the agent, but the brokerage’s share can be higher, such as for newer agents with less experience. This split is after the buyer’s agent has received their share as well.

If you’re a listing agent, you will pay both the buyer’s agent and your brokerage. For a $500,000 home with a 5% commission, the total commission would be $25,000. If you share 50% with the buyer’s agent, you will be left with $12,500. 20% of this will go to your brokerage, leaving you with $10,000. For listing agents, the costs of marketing your property will be paid for with part of their commission. This includes home staging, photography, advertising, and cleaning, and may add up to a few thousand dollars, reducing the amount that listing agents will make.

Are Real Estate Commissions Negotiable?

Real estate commissions are negotiable, but it can be difficult to lower them significantly. Real estate agents can be more likely to accept a lower commission if it's easy to sell your property, if the home has high price and will likely result in a large commission, or if they will be less involved in the sale of the home, such as by not marketing or advertising your listing as extensively or by using lower-cost options.

How can I save money on real estate commission?

• Discount Brokers

  Discount real estate brokers can offer low commissions or a flat fee for home sellers. For example, One Percent Realty offers commissions as low as 1% plus $950 for homes over $700,000, or a flat fee of $7,950 for homes under $700,000. About half of the flat fee goes to the buyer's agent, which means that the buyer's agent will also be receiving a much lower commission. This can affect how visible your home is to buyers, as agents can be less likely to prioritize your home over other listings.

  Some discount brokerages, such as Purplebricks, charge a flat fee and allow you to choose to pay zero commission to buyer agents, or you can set the commission to as much as you'd like. When working with an ordinary real estate agent, you’ll still have a say in how much commission you want to offer to buyer agents.

• Drop some services

  If you want to make it more likely for a full-service real estate agent to lower their commission, one way would be to agree to drop some of their services. This can include paying for your own services or dropping open houses. This can backfire as agents want a smooth transaction, and skimping out on some services can potentially affect the marketability or attractiveness of your home listing. That's why even some discount brokerages still recommend that you pay the full cooperating commission to buyer's agents.

• More ways to save on commission

  Real estate agents may also be likely to lower their commissions if they are a new agent looking for experience and transactions, if you're looking to both buy and sell your home with the same agent, or by using a dual agent and sharing the same agent as your home buyer.

If you want to skip paying commissions entirely, you can sell your home by yourself. Homes that are for sale by owner (FSBO) will mean that you'll have to handle everything that a listing agent usually does, but you'll save 2.5% of your home's price and significantly lower the cost of selling your house.

Some real estate agent marketplace platforms that allow you to find real estate agents, such as WOWA.ca, have built-in savings with some agents. You can list with low commission agents for as low as a 1% listing fee.

Can I message more than one agent?

Yes, you can! With WOWA.ca, you can message as many agents as you need to for a free, no-obligation consultation. We recommend messaging at least three agents to make sure you find one that works best for your unique situation.

Are you showing real estate brokers near me?

Yes, we show the real estate transactions of all licensed WOWA.ca real estate agents including sales representatives, brokers, and brokers of record.

Are the real estate transactions verified?

Yes, WOWA.ca validates the transactions of our licensed real estate agents. We are one of the first platforms in Canada to show the transactions of real estate agents and empower home buyers and sellers with this level of authenticity and transparency.

Are there any differences in the skills of sales representatives and real estate brokers?

Not necessarily. Many experienced real estate agents do not apply to become brokers. While brokers 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 are the largest real estate brokerages in Canada?

The largest real estate brokerages and franchises in Canada 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.

Are there any differences between real estate agents from famous brokerages like RE/MAX and smaller less-known brokerages?

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.

How many real estate agents are there in Canada?

In Canada, there are over 130,000 real estate agents represented by the Canadian Real Estate Association (CREA). 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). B.C. is second with more than 23,000 real estate agents and 11 real estate boards.

How do I check if my real estate agent is licensed?

Real estate agents, brokers, and brokerages are provincially licensed in Canada. To check to see if your real estate agent is registered and licensed, your provincial regulator’s website will have a database that allows you to search by name, brokerage, and city. For example, if you’re looking to buy a house in Ontario, you would check RECO’s database of licensees.

What is a buyer representation agreement?

A Buyer Representation Agreement (BRA) is a contract that can lock you into using your real estate agent for a certain period of time, which is usually three to six months. This can help prevent buyers from using an agent's services and switching to another agent to complete the transaction, which will cause the first agent to not be compensated for their time. Exclusive BRAs mean that you can only have one agent when searching for a home, but you may be able to use another agent if the search criteria is different.

BRAs can protect buyers and sellers by having the terms of your relationship in writing. This can include the commission rate that you have agreed to pay, and any disclosures that your agent might have, such as if they are dual agents. Even though BRAs can force you to work with a specific agent or brokerage, it still doesn't force you to buy or sell a home with them.

What is a real estate purchase and sales agreement?

An agreement of purchase and sale or a contract of purchase and sale is a real estate contract that spells out the terms of sale. The purchase and sale agreement is usually written by the buyer's agent based on a standardized form. Real estate purchase agreements can't usually be cancelled with penalties, unless there was a contingency or condition that was met, such as a financing contingency or appraisal contingency.