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Commission Formula:
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Real estate commission is the fee paid to agents for their services in buying or selling property. In Canada, this is typically a percentage of the final sale price, split between the buyer's and seller's agents.
The standard commission calculation is:
Where:
Example: For a $500,000 home at 5% commission, the total fee would be $25,000, typically split between listing and buying agents.
Current Rates: While negotiable, standard commission rates in Canada typically range between 3-7% of the sale price, with most transactions around 5%.
Breakdown: The total commission is usually split 50/50 between the listing brokerage and buying brokerage, with each agent then receiving a portion of their brokerage's share.
Instructions: Enter the property sale price in Canadian dollars and the commission rate percentage (typically between 3-7). The calculator will show the total commission amount.
Q1: Are real estate commissions negotiable in Canada?
A: Yes, commission rates are always negotiable between the seller and their agent. Rates may vary based on market conditions and services provided.
Q2: Who pays the real estate commission?
A: Typically the seller pays the commission, which is deducted from the sale proceeds at closing. The cost is then shared between both agents' brokerages.
Q3: Are commissions subject to taxes?
A: Yes, commissions are subject to GST/HST in Canada. This tax is in addition to the calculated commission amount.
Q4: Do commission rates vary by province?
A: While the basic structure is similar nationwide, average rates may vary slightly by region and local market conditions.
Q5: What's included in a typical commission?
A: Commission typically covers marketing costs, professional photography, open houses, negotiations, paperwork, and the agent's time and expertise throughout the process.