How Real Estate Commissions Work in Ontario (2026 Update)

A real estate commission is the fee paid to the brokerages involved in a home sale. In Ontario, commissions are not set by law, not regulated by a governing body, and not standardized across the industry. They are negotiable between the seller and their listing brokerage, and they are always expressed as a percentage of the sale price or as a flat fee.

Historically, the total commission was split between the listing brokerage (the seller's side) and the cooperating brokerage (the buyer's side). As of 2024, regulatory changes require more transparency around how and whether the seller offers compensation to the buyer's agent. This is an important shift, and it is worth understanding.

When you sign a listing agreement with a brokerage, you agree to a total commission rate. A common structure in Durham Region is 5 percent of the sale price, split as 2.5 percent to the listing brokerage and 2.5 percent to the buyer's brokerage. On an $800,000 sale, that is $40,000 total, or $20,000 per side, plus HST.

From each brokerage's share, the individual agent receives a portion based on their split arrangement with their brokerage. Splits vary widely, from 50/50 for newer agents to 90/10 or higher for experienced agents at independent brokerages. The brokerage retains its share to cover office costs, errors and omissions insurance, technology, and support staff.

The agent's portion then covers their own business expenses: marketing, staging, photography, vehicle costs, continuing education, and the administrative support that keeps transactions running smoothly. After expenses, the agent's net income on a single transaction is typically far less than clients assume.

TRREB and CREA updated their rules to require that buyer representation agreements be signed before a buyer's agent shows homes. This means buyers now formally engage their agent before touring properties, not after finding a home they like.

Additionally, the way seller compensation to buyer agents is communicated has become more transparent. Sellers can still offer compensation to the buyer's brokerage, and in practice most still do, because not offering it shrinks the pool of buyers whose agents will show the home. But the offer must be clear, documented, and disclosed to all parties.

None of this changes the fundamental economics. It does mean that both buyers and sellers should understand exactly what they are paying, to whom, and what services they are receiving in return.

Discount brokerages offering 1 percent or flat-fee listings exist in every market. Some sellers save money using them. Many do not. The question is not whether you can pay less in commission. You absolutely can. The question is whether the net proceeds after commission savings are higher or lower than what a full-service agent delivers.

A discount listing that sells for $780,000 after 60 days on market costs you more than a full-service listing that sells for $830,000 in 15 days, even if the commission rate is double. We have seen this play out repeatedly in Durham Region, particularly with homes that need strategic pricing, staging, or renovation guidance.

The math matters more than the rate. Always compare net proceeds, not commission percentages.

A fair commission buys you a defined scope of work. At minimum, you should expect: a detailed comparative market analysis, professional photography and videography, staging consultation or full staging, MLS listing with syndication to major portals, a targeted digital marketing campaign, open house management, offer negotiation, and transaction coordination through to closing.

If your agent cannot articulate exactly what their commission covers, that is a red flag. Ask for it in writing. Ask what happens if the home does not sell. Ask how their marketing budget compares to other agents in your area. The best agents welcome these questions because they have clear answers.

We are transparent about our fees from the first conversation. We explain what every dollar covers, we put it in writing, and we tie our value to measurable outcomes: days on market, sale-to-list ratio, and net proceeds compared to neighbourhood benchmarks. If you are interviewing agents and want a clear comparison, we are happy to walk through the numbers side by side.

Commissions are a significant expense. You deserve to know exactly what you are paying for and exactly what you are getting in return.