Commission

Learn how real estate commissions work in Canada, who pays them, how they’re calculated, and how they impact buyers and sellers during a home sale.

Commission



What is Commission?

Commission is the fee paid to a real estate agent or brokerage for facilitating the sale, purchase, or lease of a property.

Why Commission Matters in Real Estate

In Canadian real estate, commission is most often paid by the seller and is typically calculated as a percentage of the property’s final sale price—commonly 4% to 6% split between the listing (seller's) agent and the buyer's agent.

Commission structures vary and may include:
- Fixed percentage of the sale price
- Tiered rates (e.g., higher rate for the first $100,000)
- Flat fees in some discount brokerage models

**Key details buyers and sellers should understand:**
- Commission is negotiable
- It is paid upon closing, from the seller’s proceeds
- It incentivizes agents to market the property and close the deal

Commission is usually outlined in the listing agreement and included in the transaction's closing documents. Buyers generally do not pay commission directly, though it may be indirectly factored into the purchase price.

Understanding commission ensures transparency and allows both buyers and sellers to make informed choices about representation and service levels.

In dual agency situations—where one agent represents both the buyer and seller—commission agreements must be clearly disclosed to avoid conflicts of interest. Some discount brokerages offer lower commission rates or flat fees, appealing to sellers looking to reduce costs, though this may come with reduced services. It’s important to understand exactly what services are included in the commission, such as marketing, staging, open houses, or negotiation strategy. Buyers may also benefit from working with commission-based agents, as their fees are generally paid by the seller, allowing buyers to access expert guidance without out-of-pocket cost.

Example of Commission in Action

A seller lists a home for $800,000 and agrees to pay 5% commission. Upon closing, $40,000 is paid to the brokerages, split between the buyer’s and seller’s agents.

Key Takeaways

  • Commission compensates real estate agents.
  • Typically a percentage of the sale price.
  • Paid by the seller at closing.
  • Can be negotiated or structured differently.
  • Influences marketing, service, and agent motivation.

Related Terms

  • Listing Agreement
  • Buyer’s Agent
  • Seller’s Agent
  • Dual Agency
  • Real Estate Agent

Additional Terms

Blight

Blight refers to the deterioration, neglect, and disrepair of properties or neighborhoods that cause economic decline and reduce livability. Blighted. more

Community Land Trust (CLT)

A community land trust (CLT) is a non-profit organization that owns land to preserve long-term housing affordability. Homes are sold or rented at. more

Co-Housing Community

A co-housing community is a residential model where individuals or families live in private homes but share common facilities such as kitchens,. more

Chain of Title

Chain of title is the chronological record of property ownership transfers, from the original owner to the current owner. It documents deeds,. more

Carbon Offset Credits

Carbon offset credits in real estate are tradable credits earned by properties or developments that reduce greenhouse gas emissions through. more

Build-to-Rent

Build-to-rent refers to residential developments specifically constructed for the rental market rather than for sale. These projects are typically. more

More For You

The new Vancouver Art Gallery will be designed by Formline and KPMB.
Shutterstock

It’s full speed ahead for the new Vancouver Art Gallery building slated for 181 West Georgia Street, at the intersection of Cambie and W Georgia streets. On Monday morning, Formline Architecture + Urbanism and KPMB Architects were unveiled as the team that will lead the design of the new purpose-built building, which will replace a parking lot and former sports field known as Larwill Park.

“Selected from proposals submitted by 14 leading Canadian firms, this decision marks an important milestone in the Gallery’s renewed vision to create a destination for art and culture that reflects the diversity of its audiences,” a press release from the Gallery said. This is the beginning of a collaborative process toward a new conceptual design in 2026, one shaped by listening, dialogue and the perspectives of the communities the Gallery serves.”

Keep ReadingShow less
BC Real Estate And Development Industry Hires And Promotions: September 2025
Clockwise from top left: Erin Elliott, Kaitlynn Given, Darren Tangen, Richard Hylands, James Blair, and Jenny Siman.

Fall is now in swing, and with the new season, some in real and estate and development across BC are settling into new roles. In fact, September brought a host of new hirings and promotions, including some high-level executive moves, such as Darren Tangen starting as the President of Westbank and Erin Elliott joining Conwest Developments as Chief Financial Officer.

The month also brought moves in government, across brokerages, and in finance.

Keep ReadingShow less
When The Luxury Market Is Cool (And The Neighbours Aren’t), Your Agent Makes All the Difference

REMAX

In luxury real estate, it’s easy to assume that prestige sells itself. But even the most sought-after properties aren’t immune to the unpredictable. Market conditions cool. Stock portfolios dip. A next-door lawn grows wild. And just like that, a multimillion-dollar listing becomes harder to move.

This is why working with a highly experienced luxury REMAX® agent — one who understands how to navigate nuance, set a strategic tone, and overcome hurdles outside a seller’s control — is invaluable.

Keep ReadingShow less
Is It Time To 'Buy The Dip' On Investment Condos?
Shutterstock

This article was written and submitted by Cameron Levitt, a Toronto-based real estate agent with RE/MAX Hallmark who writes about housing dynamics, market trends, and the Canadian economy.

A recent CMHC report titled "Is Toronto's condo market downturn a repeat of the 1990s?" points to a possible future rebound as new supply has essentially stopped. The argument is straightforward: With no new projects breaking ground today, the eventual shortage could drive another wave of appreciation tomorrow. That thesis is the foundation for many to ask and question whether or not it's time to buy investment condos.

Keep ReadingShow less
Ontario Real Estate And Development Industry Hires And Promotions: September 2025
Clockwise from top left: Eric Plesman, Eric Lombardi, Kiran Marok, Jacob Cohen, Ana Bailão, and Ariel Rososhansky

Like our ever-changing cities and towns, Ontario's real estate and development landscape (and the people who make it run) are also ever-changing. From new hires and retirements to promotions and partnerships, here are all the notable moves you should know about from September.

Notable moves from last month include Ana Bailão being appointed inaugural CEO of Build Canada Homes, Jacob Cohen being promoted to President of The Daniels Corporation, Eric Lombardi joining Build Toronto as Chair, and Eric Plesman rejoining Oxford Properties Group as President and CEO.

Keep ReadingShow less
Op-Ed: Building The Future On A Foundation Of Truth
Releasing the Truth and Reconciliation Guide at an event at Northcrest Development’s YZD Experience Centre. From left to right: Warren Sault, president and CEO of Mississaugas of the Credit Business Corporation; Carolyn King, Shared Path board chair and former chief of the Mississaugas of the Credit First Nation; Richard Joy, ULI Toronto’s executive director; Bob Goulais, president & senior principal at Nbisiing Consulting Inc/Garcia Creative

This piece was written and submitted by Carolyn King, President & Board Chair of the Shared Path Consultation Initiative, and Richard Joy, Executive Director of ULI Toronto.

The places we design, build, and live within are more than bricks and mortar — they are expressions of our values. For too long in Canada, our communities and their built environment have been shaped without fully recognizing and meaningfully engaging the rights, histories, and voices of Indigenous Peoples. That must change.

Keep ReadingShow less
Stefany Marin, Century 21 Signature Service

Welcome to Meet the Agent, an ongoing series profiling real estate agents from across Canada. With more than 150,000 agents, brokers, and salespeople working in 75 different boards and associations across the country, we thought it was about time they had a place to properly introduce themselves.

If you or someone you know deserves the same chance, email agents@storeys.com to apply.

Keep ReadingShow less
How Innovation Districts Keep Universities Resilient Amid Funding Woes
Rendering from York University's 'Keele Campus Vision and Strategy'/yorku.ca

Ontario universities have long faced funding challenges, and public underfunding and domestic tuition freezes tend to lead to a reliance on pricier international student tuitions. But as international student numbers dwindle due to the implementation of lower immigration targets, universities must find innovative ways to boost revenue — while continuing to deliver world-class services to their students and communities.

One asset institutions are increasingly using to provide an avenue for long-term resilience and revenue is land. More specifically, developing institutionally owned lands in a transit-oriented, mixed-use fashion that promotes investment from a diverse array of industries. Enter: innovation districts.

Keep ReadingShow less