A buyer's agent in Ontario is typically paid through a cooperating commission — an amount the seller sets aside when listing their property, specifically to compensate the buyer's agent who brings a successful offer. In most GTA transactions, the buyer pays nothing directly to their agent; the commission comes from the seller's sale proceeds at closing. Since January 2024, how a buyer's agent gets paid is formalized through a Buyer Representation Agreement (BRA) signed before any properties are shown. Understanding this structure means no surprises at closing.
For context on who pays what in a real estate transaction, read who pays real estate commission when buying a home. For context on what you get in return, see do buyers need a real estate agent.
How the Commission Flow Works
When a seller lists their property, they sign a listing agreement with their agent. That agreement specifies the total commission — typically 3.5–5% of the sale price — and within it, the amount the seller is offering as cooperating commission to any buyer's agent who brings a successful offer.
At closing, the buyer's purchase funds flow to the seller's lawyer, who deducts the total commission and remits it to both brokerages. The buyer's agent's portion — the cooperating commission — goes from the seller's proceeds through the listing brokerage to the buyer's brokerage, and then to the buyer's agent. The buyer never sees this money change hands; it happens as part of the closing disbursements.
| Party | Pays or receives | Amount (example: $900K, 4% total commission) |
|---|---|---|
| Seller | Pays total commission | $36,000 + HST from sale proceeds |
| Listing agent's brokerage | Receives listing side | ~$18,000 + HST |
| Buyer's agent's brokerage | Receives cooperating side | ~$18,000 + HST |
| Buyer | Pays nothing directly (in standard deal) | $0 |
What the Buyer Representation Agreement Means for Payment
Since January 1, 2024, Ontario real estate agents must have a signed BRA before showing a buyer any properties. The BRA includes a compensation clause stating what rate the buyer's agent expects. If the cooperating commission offered by the seller equals or exceeds that rate, the buyer pays nothing. If the seller offers less, the buyer may be contractually obligated to cover the gap.
Example: Your BRA specifies a 2.5% buyer's agent fee. You submit an offer on a home where the seller is offering a 1.5% cooperating commission. In that scenario, you'd owe your agent the 1.0% difference — $9,000 on a $900,000 purchase — at closing.
What buyers often miss is that this gap scenario is relatively uncommon in standard GTA resale transactions, where sellers typically offer cooperating commissions aligned with market norms. But it's worth clarifying with your agent before signing the BRA: ask what cooperating commission rate they expect, and what happens if a seller offers less.
Can the BRA Compensation Be Negotiated?
Yes. The compensation terms in a BRA are negotiable. What your agent agrees to accept, and what happens if the seller's cooperating commission falls short, is a matter between you and your agent before the agreement is signed. In practice, many agents will agree that they will not seek additional compensation from the buyer beyond what the seller offers — but this needs to be stated clearly in the BRA, not assumed.
Buyer's Agent Compensation on New Construction
New construction and pre-construction condo purchases have different commission structures. Builders typically pay buyer's agents directly through their own programs, separate from the OREA Agreement of Purchase and Sale. Some builders offer full cooperating commissions; others offer reduced amounts or nothing at all on certain developments.
If you're purchasing a pre-construction condo with a buyer's agent, confirm before signing the builder's purchase agreement whether the builder is paying your agent's commission and what amount. If the builder pays less than the BRA rate, you may owe the difference — or your agent and you may agree to proceed at whatever the builder offers.
Flat-Fee and Alternative Compensation Arrangements
Some buyers and agents agree to alternative compensation structures — a flat fee for specific services, a retainer, or an hourly rate. These arrangements are entirely legal in Ontario and may suit buyers who want limited representation (e.g., just offer preparation, not full search assistance). Any alternative arrangement should be clearly documented in the BRA's compensation clause.
Flat-fee buyer agents are less common in the GTA than in some other markets. The traditional cooperating commission model remains the dominant structure, and for most buyers, the standard arrangement — where the seller covers the buyer's agent fee — makes representation effectively free.
Ready to find your next home? Browse GTA listings on Condohill and connect with a buyer's agent who knows your target market.
FAQ
Does the buyer pay the buyer's agent commission at closing?
In most Ontario transactions, no. The seller pays total commission from the sale proceeds, including the cooperating commission for the buyer's agent. Since the BRA requirement came into effect in January 2024, if the seller's cooperating commission is lower than the BRA rate, the buyer may need to pay the difference. Ask your agent about this before signing the BRA.
What happens if the seller offers no cooperating commission?
If a seller offers zero cooperating commission and your BRA specifies a buyer's agent fee, you would be responsible for paying your agent directly at closing. This is relatively rare in standard resale transactions but can occur, particularly in private sales or with some new construction builders. Always check what cooperating commission a seller is offering before making an offer.
How much does a buyer's agent earn on a $900,000 GTA purchase?
A buyer's agent's cooperating commission on a $900,000 GTA purchase typically ranges from $9,000 to $22,500, depending on the commission rate offered (1.0–2.5%). After the brokerage split and HST, the agent's take-home is typically 60–80% of that amount, less brokerage fees. Actual agent income varies significantly by brokerage structure.
Can I ask my buyer's agent to rebate part of their commission to me?
Commission rebates from agents to buyers are permitted in Ontario and are legal. Some agents and discount brokerages offer to rebate a portion of their cooperating commission to buyers as an incentive. These arrangements should be disclosed in the BRA and to the seller's agent. Not all agents offer rebates, and lower-cost representation sometimes comes with fewer services.