Real estate agent commissions are the fees paid to realtors that assist in buying or selling a real estate property. They’re paid only when transactions are completed, so no upfront payments are necessary to cover these fees.
In Ontario, the average real estate commission rate is 5% of the property’s final selling price. This fee is divided between the buyer’s and seller’s agents, either in equal portions or based on a ratio agreed upon by both parties.
Key Takeaways
- Most realtors in Ontario, including those from RE/MAX and Royal LePage, charge a 5% commission based on the property’s selling price.
- Often, realtor commissions are paid by the property seller directly from the proceeds of selling the property.
- In Canada, realtors typically charge 3% to 7% of the real estate’s value as commission.
What Are Realtor Commissions?
Realtor commissions are the amount you pay for all the services provided by buyer and seller real estate agents. These fees are often calculated as a percentage of a real estate’s final selling value and are paid from the property sale proceeds.
It’s important to note that in Canada, there are no “standardized rates” for realtor commissions. Hence, realtors may have varying commission rates, even in the same city.
How Much Commission Does A Realtor Make In Ontario?
In Ontario, the combined realtor commission for a property sale is typically 5% of the selling price. However, it’s not uncommon to come across realtors who offer commission rates as low as 3.5% to remain competitive.
In instances where the commission is less than 5%, the buyer’s agent typically retains their 2.5% commission, while the selling realtor takes home the smaller cut.
Remax Realtor Commission Rates
RE/MAX, formally known as Real Estate Maximums, is a prominent real estate firm that offers services throughout North America and specific regions of other countries. With thousands of agents across Canada, it’s currently one of the top providers of real estate services for Canadians.
This firm does not actually provide a universal rate for its agents to follow. Every realtor under this franchise can set the price for their services at their own discretion. Hence, a RE/MAX agent will generally follow your province’s average realtor commission rate.
That said, if you’re in Ontario, you’ll likely pay RE/MAX realtors a combined commission of 5% of your property’s selling price.
Royal Lepage Commission Split
Royal LePage is a century-long real estate company with over 20,000 realtors in Canada. It was founded in Toronto in 1913 and has since expanded to over 650 locations nationwide.
Like RE/MAX, the realtors from this company are free to quote how much they want as compensation for their real estate services. However, the average Royal LePage commission split is also equivalent to 5% of the real estate selling price, which is the typical realtor fee in Ontario.
How Much Commission Does A Realtor Make In Canada?
Realtors’ commissions in Canada typically range from 3% to 7% of the real estate’s selling price. However, not every agent charges a fixed percentage of the property’s total value for their commission.
In some provinces, a “graduated” commission system is used instead. If you’re in British Columbia, for example, realtors often charge a 6% to 7% commission on the first $100,000 of a property’s price and only charge 2% to 3% on the remaining amount.
Some agents may also prefer receiving a flat fee rate regardless of your property’s value, while others, although uncommon, may agree to be paid on an hourly basis.
In comparison to other provinces in Canada, it’s safe to say that the realtor fees in Ontario are neither too expensive nor too cheap. After all, the average real estate commission in this province falls within the median range of typical commission rates in Canada.
How Much Commission Does A Realtor Make In Toronto?
In Toronto, realtors typically earn commissions equivalent to around 5% of the real estate value. The buying and selling realtors commonly split this fee equally, but there are instances where the buyer’s agent takes home a bigger cut.
Who Pays Realtor Fees In Ontario?
Property sellers in Ontario are often responsible for paying realtor fees. This commission is one of the several closing costs a seller must fulfill before the home sale can be fully completed.
No upfront fees are necessary to pay for the realtor fees. Real estate commissions are deducted directly from the seller’s proceeds from the property sale.
Are Realtor Fees In Ontario Negotiable?
Yes, realtor fees in Ontario are negotiable, as they are throughout Canada.
The Canadian Real Estate Association (CREA), which governs every realtor in the country, allows its members to charge for their services without standardized rules or limitations. Hence, every realtor can increase or decrease their price regardless of the provincial real estate commission average.
Many realtors are willing to negotiate and reduce their asking commission. However, know that some realtors aren’t as open to the idea. So, you should communicate with multiple real estate agents before deciding which realtor to work with.
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FAQs
1% is not considered a good real estate agent fee in Canada. The average realtor commission rate throughout the country usually ranges from 3% to 7% of the property’s selling price, so most realtors won’t agree to a 1% real estate fee.
Most realtors in Ontario typically charge 5% of the property value. This payment already covers all the services provided by both the buying and selling realtors involved in the transaction.
Both property sellers and buyers have to pay closing costs in Ontario. Most of these fees are paid by the real estate buyer. However, some expenses, including the realtor commissions and capital gains tax, are the seller’s responsibilities.
In Canada, realtors typically earn commissions ranging from 3% to 7% of the property’s price. This significant variation is primarily due to the lack of standardized pricing for realtor fees nationwide.
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