Real Estate Commission in Ontario

Written by Firas Swaida, RE/MAX Realty Services Inc., Brokerage. Updated July 2026.

In Ontario, there is no fixed, official, or government-set real estate commission. The province does not publish a rate, and no law tells a brokerage what to charge. Commission is negotiated between you and the brokerage you hire, and it is agreed in writing before your home goes on the market. Most often it is written as a percentage of the final sale price, though flat-fee and blended arrangements are also used.

In a typical residential resale, the seller pays the total commission, and it comes out of the sale proceeds on closing rather than up front. That total is usually divided between two brokerages: the listing brokerage that represents the seller, and the cooperating brokerage that brings the buyer. Ontario charges 13% HST, and that tax is added on top of the commission, not baked into it.

Because the number is never set for you, what you actually pay depends on the property, the level of service, the market, and the deal you strike with your brokerage. Firas Swaida works through those numbers with sellers and buyers across Mississauga and the wider GTA in plain language, so the figure on the page matches what you agreed to out loud. The sections below explain how the money is structured, who pays which part, and what to ask before you sign.

How real estate commission is structured in Ontario

Commission is the fee a brokerage earns for marketing a property, representing a client, and carrying a transaction through to closing. In Ontario it is not one number, and it is not one format. The structure is set by agreement, and a few different shapes are common. None of them is a rule. Each is a starting point for a conversation.

A percentage of the sale price

The most familiar structure is a percentage of the final sale price. Because the fee is tied to the price, the dollar amount is not known until the property actually sells. Two homes on the same street can carry the same percentage and still produce very different fees, since the sale prices differ. The percentage itself is negotiated. It is not standardized across the province, across a city, or even within a single brokerage.

A flat fee

A flat fee is a set dollar amount agreed in advance, regardless of what the home eventually sells for. Some sellers prefer the predictability of knowing the figure from day one. A flat fee can be paired with full service or with a limited menu of services, so the number on its own does not tell you what is included. Two flat fees that look similar can represent very different amounts of work.

A blended or tiered arrangement

Some agreements mix formats, for example a base amount plus a percentage, or a percentage with a stated minimum fee. Ontario does place limits on how a percentage can move. A brokerage cannot build a scale where the percentage climbs as the sale price rises. A rate can stay level or step down at higher prices, but it cannot ratchet upward. A fee calculated only on the amount a home sells for above its asking price is also not permitted. These limits come from the Code of Ethics under the Trust in Real Estate Services Act, and a straightforward brokerage will keep your agreement clear and consistent on this point.

Common structures you may be offered include:

• A percentage of the final sale price
• A flat dollar fee set in advance
• A base fee plus a percentage on top
• A percentage with a stated minimum fee
• A reduced fee tied to a limited service package

Firas can lay out which structure fits your property and your goals, and put real numbers beside each one so you can compare like with like rather than guess.

Who pays the commission, and how it comes out of closing

In the standard residential resale, the seller pays the commission. The buyer does not typically write a separate commission cheque, because the buyer-side fee is built into the arrangement the seller already agreed to. This catches a lot of people off guard, so it is worth slowing down on.

The seller pays from the sale proceeds

When you sell, you do not pay commission out of pocket at the moment you sign the listing. The fee is paid on closing, out of the money the buyer pays for the home. Your real estate lawyer handles the mechanics. The sale proceeds first cover what is owed against the property, including any remaining mortgage, the commission plus HST, your legal fees, and closing adjustments, and you receive the balance. Because the fee comes off the proceeds, it directly affects your net figure, which is why estimating it early matters.

The role of the deposit and the trust account

When a buyer makes an offer, they usually provide a deposit, which is held in the listing brokerage’s real estate trust account. On a completed sale, that deposit is generally credited toward the commission owing, with the balance of the fee paid from the closing funds. If the deposit happens to be larger than the commission, the difference is returned to the seller’s side through the lawyers. The deposit is not an extra cost. It is part of the purchase price that ends up applied to the fee.

Why the buyer indirectly funds it too

Although the seller signs off on the fee, the money originates with the buyer’s purchase price. Many people on both sides think of commission as a cost folded into the price of the home, and that is a fair way to see it. It is one reason the fee is worth understanding whichever side of the deal you are on. Firas can show you exactly where the commission sits in the overall numbers for your specific transaction, so it is a known figure and not a vague one.

How the split between brokerages works

Two brokerages are usually involved in a sale, and the commission is shared between them. Understanding the split explains why listings set aside a portion of the fee for the buyer’s side, and why that portion is a strategic decision rather than a fixed formula.

Listing side and cooperating side

The listing brokerage represents the seller and holds the listing agreement. The cooperating brokerage represents the buyer. When the seller agrees to a total commission, the listing brokerage typically agrees to share part of it with whatever cooperating brokerage brings the successful buyer. The division between the two sides is itself negotiable, and it is not automatically an even split. The amount offered to the cooperating side is decided when the property is listed, and it forms part of the strategy for attracting buyers’ agents to show the home.

The brokerage is paid, not the individual agent

In Ontario, commission is legally earned by and paid to the brokerage, not to the individual agent. Firas, like every registered salesperson, is paid by his brokerage under his own arrangement with it. When you sign a listing agreement, you are contracting with the brokerage, which in his case is RE/MAX Realty Services Inc., Brokerage, and the agent is your representative and point of contact. This is not a technicality. It is why the paperwork names the brokerage, and it is worth knowing when you read your agreement.

What happens with the cooperating amount

If a buyer comes to the table without their own representation, the total commission does not automatically shrink, and the saving does not automatically flow to you. What happens depends entirely on the listing agreement you signed. Some agreements address this directly, and some do not. Sellers often assume the fee drops if there is only one brokerage involved, and that assumption can be wrong. Ask Firas how your agreement treats an unrepresented buyer before you count on any change to the number.

Commission is negotiable and not regulated

This is the single most important point to understand. No statute, regulator, or real estate board sets commission in Ontario. The Real Estate Council of Ontario, known as RECO, administers the rules for the sector, and it does not fix or publish rates. What you pay is a matter of agreement, full stop.

What negotiable actually means

Every part of the fee is open to discussion: the structure, the percentage or flat amount, the split offered to the buyer’s side, and the length of the listing. A brokerage is free to propose a number, and you are free to propose a different one. The figure that ends up governing your sale is the one both sides sign, nothing more and nothing less. If someone tells you a rate is simply “the rate,” that is a claim worth questioning.

Why fixing rates is illegal

Competing brokerages are not permitted to agree among themselves on what to charge. Under Canada’s Competition Act, an agreement between competitors to fix, maintain, or control prices is a serious criminal offence. That is a large part of why honest agents will tell you there is no standard rate. Quoting a rate as though it were mandatory, or coordinating pricing with competitors, is close to the exact conduct the law prohibits. The federal Competition Bureau has been actively examining commission practices in Canadian real estate, including a court-ordered investigation into the Canadian Real Estate Association’s commission rules and cooperation policy. That review is ongoing and has reached no conclusion of wrongdoing, but it shows how closely this area is watched.

What the rules do require

The amount is free to negotiate, yet the process around it is regulated. Under the Trust in Real Estate Services Act, the consumer protection law that governs the sector, commission must be set out clearly in a written agreement. A brokerage cannot collect a fee without a valid written representation agreement that carries a definite expiry date and has been signed and delivered to you. If the fee is reduced later, that change also has to be documented in writing. So the number is yours to negotiate, and once agreed, it has to be on paper and it has to be clear.

Things you can negotiate include:

• The overall structure, whether a percentage, a flat fee, or a blend
• The size of the fee itself
• The portion offered to a cooperating brokerage
• The length and expiry date of the listing agreement
• Which marketing and services are included for the fee
• How a reduction is handled if the brokerage finds the buyer directly

Firas expects these conversations and would rather have them openly at the start than leave you wondering. Bringing your questions to him early tends to produce a cleaner agreement and fewer surprises down the line.

What the commission actually pays for

A fee is far easier to weigh once you can see what sits behind it. Commission pays for much more than the hours around an offer. It covers the full arc of getting a property sold, and a good deal of the work happens before a sign goes up and after a deal is firm.

Marketing and exposure

Getting a property in front of the right buyers is a large part of the value. That can include professional photography, preparing the listing, exposure on the MLS system, syndication to the major real estate websites, signage, advertising, and open houses. Much of this is paid for by the brokerage, and in most agreements it is spent whether or not the home ends up selling.

Pricing, strategy, and representation

Behind the marketing sits a pricing strategy based on recent comparable sales, advice on preparing the home so it shows well, and representation through offers and negotiation. On the buyer’s side, the fee supports the search, the showings, and honest guidance on what to offer and what to walk away from. Skilled negotiation at the offer table can move the final price by an amount that dwarfs small differences in the fee.

Paperwork, compliance, and coordination

Every transaction runs on contracts, disclosures required under TRESA, deadlines, conditions, and coordination with lawyers, lenders, inspectors, and the other brokerage. Mistakes in this part of the process are expensive and sometimes legal, and part of what you pay for is that they are handled correctly and on time.

Risk, overhead, and the no-sale scenario

In most listing agreements, if the property does not sell, no commission is paid, and the brokerage absorbs the marketing costs it already spent. That risk is part of what the fee reflects on the sales that do close. A percentage-based fee is, in effect, a bet by the brokerage that its work will produce a sale.

A typical full-service fee can cover:

• Photography, staging advice, and listing preparation
• MLS listing and broad exposure across major websites
• Signage, advertising, and open houses
• Pricing analysis using recent comparable sales
• Negotiation of offers and conditions
• Management of contracts, disclosures, and deadlines
• Coordination with lawyers, lenders, and inspectors through to closing

What is and is not included varies by brokerage and by agreement, which is exactly why the fee and the service list should be read together. Ask Firas to itemize what his service includes so you can judge the number against the actual work for your property.

HST on real estate commission

Commission is a service, and in Ontario that service is subject to HST at 13%. The tax is added on top of the agreed fee. It is a real cost, and it belongs in any estimate of what you will net from a sale.

The tax sits on top, not inside

When you see a percentage or a flat fee quoted, assume the 13% HST is extra unless the agreement clearly states that the figure already includes it. On closing, the commission and the HST are paid together out of the sale proceeds. Skipping the tax in your mental math is a common way that sellers end up with a smaller net figure than they expected at the lawyer’s office.

Estimating your net figure

To estimate what leaves your side of the table, take the agreed commission, add 13% for HST, and treat that combined amount as the cost of the brokerage services. From your sale price, you would subtract that combined figure along with any remaining mortgage, your legal fees, and closing adjustments to arrive at your approximate net proceeds. Firas can prepare a net-proceeds estimate for your specific property, with the commission and HST shown as clear line items, so nothing about the tax comes as a surprise.

HST is set by tax law, not by the brokerage

The 13% is a fixed rate set by government, so it is not something a brokerage can waive or discount. A brokerage can negotiate its fee, but not the tax charged on that fee. If anyone offers to make the HST disappear, treat that as a warning sign rather than a saving.

How buyer agency is paid

Buyers often assume representation is free, because they do not hand over a cheque. The reality is a little more layered, and recent rule changes have made it more important for buyers to read their agreement before they act.

The traditional flow

In most Ontario resales, the seller’s listing agreement sets aside an amount for the cooperating brokerage. When your agent brings you to a home and you buy it, that set-aside amount is what pays your side, and it comes from the seller’s proceeds on closing. In that common case, the buyer does not pay their agent separately, and the fee is effectively part of the price of the home.

Buyer representation agreements are now in writing

Since the December 2023 changes under TRESA, a brokerage must have a written representation agreement in place with a buyer before that buyer makes an offer. This document, often called a buyer representation agreement, states the compensation the buyer’s brokerage is entitled to, and it carries a firm expiry date. Reading it closely matters, because it defines what you could owe if the amount offered on a given listing does not match what your agreement specifies.

The possible shortfall

If the amount a seller’s side offers to the cooperating brokerage is less than what your buyer agreement calls for, the difference could become your responsibility, depending on how your agreement is written. Many buyers never run into this. Some do, particularly on listings that offer a smaller cooperating amount, or on private sales that offer nothing at all. The way to avoid a surprise is simple: understand your agreement before you make an offer. Firas explains this clearly up front and structures the arrangement so you know, in advance, whether any out-of-pocket amount could ever apply to you.

Buyers on new construction and private sales

New builds and private sales, sometimes advertised as for sale by owner, can treat buyer-agent compensation differently. On a private sale, the seller may not have offered anything to a cooperating brokerage, so your buyer agreement governs what happens next. On new construction, the builder sets its own terms for cooperating agents. Both are worth a specific conversation before you tour, rather than after you have fallen for a home. A short talk with Firas ahead of time can keep your options open and your costs clear.

Flat-fee and discount brokerage models, and their trade-offs

Not every brokerage charges the same way, and lower-cost models are a genuine option. They are neither a trick nor a guaranteed saving. Each one is a different bundle of service at a different price, and the right choice depends on your property, your timeline, and how much of the work you want to take on yourself.

What these models offer

Discount and flat-fee brokerages typically charge less than a full-service percentage. Some charge a set fee to place a listing on the MLS system. Some offer a reduced percentage with a lighter level of service. Some let you pay only for specific pieces, such as listing entry, photography, or paperwork, and handle the rest yourself. The common thread is that you pay less and, in exchange, usually receive less hands-on service.

The trade-offs to weigh

Before choosing a lower-cost model, weigh a few things honestly:

• Level of service: full marketing and hands-on negotiation, or a lighter package where more falls to you
• The cooperating amount: a thin total fee can leave less to offer the buyer’s side, which may affect how widely your listing is shown
• Negotiation: consider who will represent you at the offer table, and how experienced they are
• Upfront versus contingent cost: some flat fees are payable whether or not the home sells, unlike a typical full-service fee that is earned only on a completed sale
• Your own time and comfort: a lighter model asks more hours and more decisions of you

Full service is negotiable too

It helps to remember that a full-service brokerage fee is negotiable as well, so the real comparison is rarely cheap against expensive. It is what each option costs against what each one delivers. A somewhat different full-service number, backed by strong marketing and experienced negotiation, can net you more than a bare-bones listing that saves on the fee but sells for less or sits on the market longer. The only way to judge it is with real figures for your property. Firas is glad to compare approaches honestly, and he will tell you when a lighter model might genuinely suit your situation rather than talk you out of it.

Questions to ask before you sign a listing agreement

A listing agreement is a binding contract. Before you sign, get clear answers, in writing, on the points that decide what you pay and what you receive. These are the ones that matter most.

About the fee itself

• What is the total commission, and is it a percentage, a flat fee, or a blend?
• How much of that total is offered to the cooperating brokerage?
• Is HST included in the figures you are showing me, or added on top?
• Does the fee change if you bring the buyer directly, or if the buyer has no agent?

About the term and your options

• How long does the listing agreement run, and when exactly does it expire?
• Can I cancel, and on what terms?
• What happens to the fee if I take the home off the market, or if it does not sell?
• Is there a holdover period after the agreement ends, and how does it work?

About the service behind the fee

• Exactly what marketing is included, and who pays for it?
• Who handles showings, offers, and negotiation, and what is their experience?
• What is your pricing strategy for my property, and which recent sales support it?
• How, and how often, will you keep me updated?

If any answer is vague, ask for it in writing. A straightforward brokerage will welcome the questions rather than dodge them. Firas would far rather you ask all of these now than wonder later, and he will put the answers in plain terms next to real numbers for your home.

Frequently asked questions

Is there a standard real estate commission in Ontario?

No. There is no standard, official, or legally set rate. Commission is negotiated on every transaction, and quoting a single mandatory rate would run against the law. Any figure you have heard described as normal is, at most, a commonly seen range, not a rule. The right number for you depends on your property, the service you want, and the agreement you reach with your brokerage.

Who pays the real estate commission, the buyer or the seller?

In a typical resale, the seller pays the total commission out of the sale proceeds on closing. That total usually covers both the listing side and the buyer’s side. Buyers do not normally pay their agent separately, though a buyer representation agreement can create exceptions, which is one more reason to read it before you make an offer.

Is real estate commission really negotiable?

Yes. The structure, the amount, the split offered to the buyer’s brokerage, and the length of the agreement are all open to discussion. The figure that governs your sale is the one written into the agreement you sign. Firas expects this conversation and will have it openly, with numbers you can actually compare.

Do I pay HST on top of the commission?

Yes. Ontario applies 13% HST to the commission, and it is added on top of the agreed fee. The tax is set by government, so a brokerage cannot waive it, although the fee it applies to is negotiable. Always include the HST when you estimate your net proceeds from a sale.

How is the commission divided between the two brokerages?

The seller’s total fee is usually shared between the listing brokerage and the cooperating brokerage that brings the buyer. The division is negotiable and is not automatically an even split. The portion offered to the buyer’s side is decided when the property is listed, and it is part of the strategy for attracting showings.

When is the commission actually paid?

On closing, out of the sale proceeds, handled through the lawyers. You do not pay it up front when you list. The buyer’s deposit, held in the listing brokerage’s trust account, is generally credited toward the fee, with the balance paid from the closing funds.

What happens to the commission if my home does not sell?

In most listing agreements, no sale means no commission, and the brokerage absorbs the marketing costs it already spent. Confirm this in your own agreement, and check whether any flat-fee or upfront charges would apply regardless of a sale, since some lower-cost models are structured differently.

Can I sell without offering anything to a buyer’s agent?

You can decide how your listing treats a cooperating brokerage, but offering little or nothing can reduce how many buyers’ agents bring clients to see your home. It is a strategic choice with a real trade-off, not a simple saving. Talk it through with Firas against your timeline and your local market before you decide.

As a buyer, will I ever have to pay my agent directly?

Sometimes, yes. If a listing offers the cooperating side less than your buyer agreement specifies, or offers nothing, as can happen on a private sale, the difference may fall to you depending on how your agreement is written. Understanding that agreement before you make an offer is the way to avoid a surprise.

Are flat-fee or discount brokerages worth it?

They can be, for the right seller. You pay less and generally receive a lighter service level, so the real question is what you are giving up and whether it costs you more at the sale price than you save on the fee. Since full service is negotiable too, compare real numbers and real service rather than labels.

Can a brokerage charge a higher percentage as my price goes up?

No. Ontario rules do not allow a commission structure where the percentage rises as the sale price climbs. A rate can stay level or step down at higher prices, and a fee cannot be based only on the amount a home sells for above its asking price. Your agreement should be clear and consistent on this.

How do I know what I am actually paying for?

Ask for the fee and the service list together, in writing. The number means little without knowing the marketing, the representation, and the coordination that stand behind it. Firas will itemize what his service includes so you can judge the fee against the work for your specific property.

Talk to Firas Swaida about your numbers

Commission in Ontario is not a fixed rate you have to accept. It is a negotiated fee, paid by the seller from the sale proceeds on closing, usually shared between two brokerages, with 13% HST on top. What you pay, and what you receive for it, comes down to the agreement you sign and the market your property sits in. A general guide can explain the mechanics, but only real figures for your home and your goals can tell you what makes sense.

Firas Swaida is a real estate agent with RE/MAX Realty Services Inc., Brokerage, serving sellers and buyers across Mississauga and the GTA in English and Arabic. He will sit down with you, look closely at your property or your search, and lay out the commission structures that fit, with honest numbers beside each one and no pressure to sign. If anything here raised a question about your own situation, the next step is a straight conversation.

Call or text Firas Swaida at (647) 402-4727 to talk through your specific numbers and get a clear, written picture before you commit to anything.