When you sell a home in Ontario, real estate commission is paid by the seller and split between two brokerages: the listing brokerage (your agent's firm) and the buyer's brokerage (the buyer's agent's firm). Understanding how commission is structured, who receives what, and what you actually pay helps you negotiate intelligently and plan your net proceeds accurately.
Who Pays Commission in Ontario?
The seller pays all commission — both the listing side and the buyer's side. This is how it works in Ontario and across Canada. Even though the buyer's agent works for the buyer, their commission comes from the seller's proceeds at closing. The seller agrees to the total commission rate when signing the listing agreement, and that rate is split between the two brokerages as specified.
This model exists because sellers receive the purchase proceeds and are in a position to pay commission from them. Buyers typically don't have additional cash beyond the purchase price and closing costs. The arrangement means buyers can use professional representation without paying out of pocket — though they do bear the cost indirectly through the purchase price.
How Commission Is Split
The total commission is divided between the listing brokerage and the co-operating (buyer's) brokerage. The split is specified in the listing agreement and is offered publicly to buyer's brokerages as the "co-operating commission" — the amount buyer's agents can expect to receive if they bring a buyer who completes a purchase.
Typical GTA commission structure in 2025:
| Side | Rate | On $900,000 sale |
|---|---|---|
| Listing brokerage | 1.5–2.5% | $13,500–$22,500 |
| Buyer's brokerage | 2–2.5% | $18,000–$22,500 |
| Total (before HST) | 3.5–5% | $31,500–$45,000 |
| HST (13%) | — | $4,095–$5,850 |
| Total with HST | — | $35,595–$50,850 |
When Is Commission Paid?
Commission is not paid upfront or during the listing period. It's paid at closing, deducted from your sale proceeds. Your real estate lawyer receives the gross sale proceeds from the buyer's lawyer, deducts the mortgage discharge, commission, legal fees, and adjustments, and remits the net amount to you. You never write a separate cheque for commission — it flows through the closing statement.
If a deal falls through — the buyer walks before the deal goes firm, or a condition isn't waived — no commission is earned. Commission is only payable on a completed transaction. If the deal goes firm and then the buyer defaults, the commission situation becomes more complex and is addressed in the listing agreement's terms.
What the Listing Agreement Says About Commission
When you sign an OREA listing agreement (Form 200 — Authority to Offer for Sale), you specify the total commission rate and the co-operating commission offered to buyer's brokerages. The listing agreement is a binding contract between you and the listing brokerage. If your home sells during the listing period (including a holdover period after expiry), commission is owed.
The holdover clause means that if a buyer who was introduced to your property during the listing period buys it within a specified time after the listing expires (typically 60–90 days), commission is still owed to the listing brokerage. This prevents sellers from waiting for the listing to expire to do a private deal with a buyer the agent found.
Does the Agent Keep the Full Commission?
No. The commission goes to the brokerage first, and the brokerage pays the agent their share based on a split agreement between the agent and their brokerage. New agents may receive 50–60% of the commission; experienced top-producing agents may be on splits of 80–90% or more, or flat desk fee arrangements. The specific agent/brokerage split is an internal matter — you pay the brokerage and they pay the agent.
If the listing agent also brings the buyer (double-ending), they may receive both sides of the commission — though they must then represent both parties and navigate potential conflicts of interest. Discuss this scenario with your agent and understand the implications before proceeding.
Commission is negotiable — see our guide on whether you can negotiate real estate commission. Also understand the full cost of selling a home in Ontario before calculating your net proceeds.
FAQ
Can I avoid paying the buyer's agent commission if the buyer is unrepresented?
If the buyer has no agent, the co-operating commission you offered isn't owed to another brokerage. What happens to that portion depends on your listing agreement — it may reduce your total commission, or the listing brokerage may retain it. Clarify this with your listing agent before signing. Some listing brokerages retain the full commission regardless; others credit you the buyer's side when no buyer's agent is involved.
Is commission the same as "finder's fees" or referral fees?
No. Commission under an OREA listing agreement is a contractual payment for services rendered in completing the sale. Referral fees are separate payments between agents (e.g., when one agent refers a client to another). Referral fees are regulated under REBBA (Real Estate and Business Brokers Act) and must flow through the brokerage, not directly between agents.
What happens to commission if the sale price is lower than expected?
Commission is calculated as a percentage of the actual sale price — whatever the home sells for. If you list at $1,000,000 and accept $920,000, commission is calculated on $920,000. There's no minimum commission floor unless one is specified in your listing agreement (uncommon in residential sales).
Is commission the same across all agents and brokerages in the GTA?
No. Commission is individually negotiated between each seller and their listing agent. There is no industry-set standard rate — that would be price-fixing and is illegal under Canadian competition law. Rates vary by agent, brokerage, market conditions, and property type. Higher-priced properties sometimes command lower percentage rates due to the absolute dollar amounts involved.
What is a "flat fee" or "discount" brokerage?
Flat-fee brokerages charge a fixed amount (e.g., $5,000–$10,000) for listing services rather than a percentage. You still typically offer the buyer's agent co-operating commission. The tradeoff: lower listing cost but often reduced service — limited marketing, no staging consultation, minimal negotiation support. Compare the service offering carefully, not just the fee.