How Do Realtor Fees Work?

How Do Realtor Fees Work in Ontario?

One of the most common questions I get as a realtor is, “How do realtor fees work in Ontario?” Whether you’re buying or selling a home, understanding how these fees are structured can help you make informed decisions. Let’s break it down simply.

Realtor Fees for Buyers: No Out-of-Pocket Cost

If you’re a homebuyer in Ontario, the good news is that you don’t pay anything to hire a realtor! The commission for both the buyer’s agent and the seller’s agent is typically covered by the seller. This means you get expert representation, guidance, and negotiation support at no direct cost to you.

Your realtor helps you navigate the home-buying process, from searching for properties to making offers, negotiating terms, and closing the deal—all without you having to pay their commission. This makes hiring a realtor a no-brainer for buyers, as you get professional assistance without any financial obligation.

Realtor Fees for Sellers: The Standard 5% Commission

For sellers, the standard real estate commission in Ontario is typically 5% of the final sale price of the home. This commission is then split between the two realtors involved in the transaction:

• 2.5% goes to the listing agent – This is the realtor who helps you prepare your home to sell, markets your home, negotiates offers, and ensures your home sells for the best possible price.

• 2.5% goes to the buyer’s agent – This commission is paid to the agent who brings the buyer and helps them navigate the purchase process.

What Does This Fee Cover?

Many sellers wonder what they’re paying for when they agree to a 5% commission. Here’s what’s typically included:

• Marketing & Advertising – Professional photography, virtual tours, online listings, and targeted marketing campaigns to attract buyers.

• Home Staging & Preparation Advice – Ensuring your home is presented in the best light to maximize value.

• Showings & Open Houses – Managing appointments and showcasing your home to potential buyers.

• Negotiation & Paperwork – Ensuring you get the best price and favorable terms while handling all legal documentation.

• Expert Guidance – Navigating potential issues, working with home inspectors, and coordinating with lawyers to ensure a smooth closing.

Can Commission Be Negotiated?

Yes, realtor commissions are not fixed by law and can sometimes be negotiated. However, it’s important to remember that lower commission rates may result in reduced services or less incentive for buyer’s agents to show your home. A competitive commission structure ensures your home is marketed effectively and attracts the right buyers. Some brokerages do limit their agents on negotiating their commissions, but with eXp I am free to offer any commission structure to my clients that makes sense. 

Final Thoughts

Understanding realtor fees in Ontario helps both buyers and sellers make confident decisions. If you’re buying, your agent’s expertise comes at no cost to you. If you’re selling, the standard 5% commission is an investment in maximizing your home’s value and ensuring a smooth transaction.

Have questions about buying or selling a home? Let’s connect—I’d be happy to guide you through the process!