1. What is Real Estate Commission?

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

2. How Commission is Calculated

The standard commission calculation formula is:

Where:

• Sale Price — The final selling price of the property
• Commission Rate — The agreed percentage rate (typically 5% in Ontario)

Note: The total commission is often split between the buyer's and seller's agents, and may include HST in Ontario.

3. Typical Commission Rates in Ontario

Standard Rates: While commission rates are negotiable, the typical total commission in Ontario ranges from 4-6% of the sale price, with 5% being most common.

Breakdown: The total commission is usually split between the listing brokerage (representing the seller) and the cooperating brokerage (representing the buyer).

4. Using the Calculator

Instructions: Enter the sale price of the property in Canadian dollars and the commission rate (typically 5%). The calculator will compute the estimated 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.

Q3: Is HST included in the commission?
A: 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 services are included in the commission?
A: Commission typically covers marketing, showings, negotiations, paperwork, and professional advice throughout the selling process.