Commission, Explained Honestly — Who Pays, What For, and What It Should Get You
How Does Real Estate Commission Work in Ontario?
The short answer: In Ontario, the seller usually pays total real estate commission of 4–5% plus HST, split between the listing brokerage and the buyer’s brokerage. On a $1.2M sale at 5%, that’s about $67,800 total. Commission is negotiable, but what matters most is whether the service and outcome justify what you pay.
Commission is one of the most misunderstood parts of selling a home in Ontario.
Most people know it exists, but fewer understand who actually pays it, how it is split, what it should cover, and what changed under the newer TRESA rules.
This is where a lot of bad decisions start. Sellers fixate on the percentage without understanding the structure. Buyers assume they never have exposure. Both sides often walk into agreements without enough clarity.
How Does Real Estate Commission Work in Ontario?
Real estate commission is usually a percentage of the final sale price, paid by the seller at closing from the sale proceeds.
The most common structure is 4% to 5% plus 13% HST, split between the listing brokerage and the buyer’s brokerage.
The exact rate is negotiated before the property goes to market and documented in the listing agreement.
Reality check: Commission is not fixed by law. It is negotiated. The real question is whether the fee matches the execution and outcome.
Who Pays Real Estate Commission in Ontario?
In most Ontario transactions, the seller pays the total commission at closing.
The listing brokerage then pays the buyer’s brokerage their share from that amount.
Buyers usually do not pay directly, but they are still affected by how commission is structured.
What Changed Under the 2024 TRESA Rules?
The newer TRESA framework made buyer representation more explicit.
Buyers now sign written agreements that clearly define commission expectations. If a listing offers less than what was agreed, the buyer may need to cover the difference.
Reality check: Buyers are not suddenly paying in every deal — but expectations are now clearly documented upfront.
What Should a 5% Commission Actually Buy?
A 5% commission should deliver a full strategy — not just an MLS listing.
- Strategic pricing analysis
- Professional photography and floor plans
- Video where appropriate
- Paid marketing beyond MLS
- Buyer-agent outreach
- Open house strategy
- Weekly communication
- Negotiation expertise
- Closing coordination
Reality check: If you are paying full service, you should be getting full service.
Is Real Estate Commission Negotiable in Ontario?
Yes — completely.
No law sets the rate. It is negotiated before signing the listing agreement.
But focusing only on commission is usually the wrong move. Deliverables and results matter more.
Reality check: A lower fee with weaker execution often costs more in the final sale price.
How Much Commission Is Typical in Hamilton and Burlington?
Most full-service listings land between 4% and 5% plus HST.
This often splits roughly between listing and buyer sides depending on strategy.
Luxury and alternative models may differ, but service level usually changes with price.
How Is the Commission Split Between Agents?
The split is defined in the listing agreement.
A common structure is roughly even between listing and buyer sides.
Agents may then split their portion internally with their brokerage.
Why Do Some Sellers Pay Less?
Some negotiate lower rates. Others choose limited-service models.
But lower cost usually means reduced service or execution.
The better question is not the lowest fee — it is the best net result.
FAQ
Q: How much is commission on a $1M home?
A: Around $45,000–$56,500 depending on rate and HST.
Q: Can buyers pay their agent?
A: Yes, depending on agreements under TRESA.
Q: Is HST applied?
A: Yes, 13% HST applies to commission.
Q: Is there a minimum commission?
A: No — but lower rates often reduce service.
Q: Do agents keep all commission?
A: No, they usually split it with their brokerage.
Moving Forward
Commission matters — but structure and execution matter more.
The smartest sellers focus on what the fee actually delivers and the net result it produces.
Disclaimer: This content is for informational purposes only and should not be considered legal, financial, or real estate advice.
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