1. What is Real Estate Commission?

Real estate commission is the fee paid to real estate agents for their services in facilitating the sale or purchase of a property. In Ontario, this is typically a percentage of the final sale price, split between the buyer's and seller's agents.

2. How Commission is Calculated

The standard commission calculation formula is:

Where:

• \( Sale\ Price \) — Final selling price of the property in CAD
• \( Commission\ Rate \) — Agreed percentage rate (typically 3-5% in Ontario)

Note: The total commission is often split between listing and buying brokerages, and then further divided between brokers and agents.

3. Typical Commission Rates in Ontario

Details: While commission rates are negotiable, the typical total commission in Ontario ranges from 3% to 5% of the sale price, usually split as:

• 2-2.5% to the listing brokerage
• 1-2.5% to the cooperating (buyer's) brokerage

4. Using the Calculator

Tips: Enter the property sale price in Canadian dollars and the agreed commission rate percentage. The calculator will compute the total commission amount.

5. Frequently Asked Questions (FAQ)

Q1: Are commission rates fixed in Ontario?
A: No, commission rates are negotiable between the seller and their real estate agent/brokerage.

Q2: Who pays the commission in a real estate transaction?
A: Typically the seller pays the commission, which is deducted from the sale proceeds at closing.

Q3: Is HST included in the commission?
A: No, HST (13% in Ontario) is added to the commission amount and paid separately.

Q4: Can I negotiate a lower commission rate?
A: Yes, commission rates are always negotiable. Discount brokerages may offer lower rates with fewer services.

Q5: What's the average commission on a $500,000 home?
A: At 5% commission, it would be $25,000 (typically split between both agents' brokerages).