When buying a home in Ontario, buyers often assume they'll face a direct fee from their agent — but real estate commission works differently here. Traditionally, the seller pays the total commission out of the sale proceeds, and that amount is split between the listing agent and the buyer's agent. In most GTA transactions, buyers pay nothing directly to their agent at closing. Understanding how commission is structured — and what changed with Ontario's Buyer Representation Agreement rules — helps you know what to expect before you sign anything.
This matters especially for first-time buyers who are just beginning to understand the costs of buying a home in the GTA. Commission isn't listed in your closing cost statement the way land transfer tax is, but it affects the deal structure in ways buyers should understand.
How Real Estate Commission Works in Ontario
When a seller lists a property, they sign a listing agreement with their agent that specifies the total commission rate. That total commission is typically 3.5–5% of the sale price, and it covers both the listing agent's fee and the cooperating commission offered to the buyer's agent.
For example, on a $900,000 sale with a 4% total commission:
- Listing agent: 2% = $18,000
- Buyer's agent (cooperating commission): 2% = $18,000
- Total from seller: $36,000 + HST
This means the buyer's agent is compensated by the seller — not the buyer — in most standard Ontario transactions. From the buyer's perspective, representation has historically been free.
What Changed: Buyer Representation Agreements
As of January 1, 2024, Ontario real estate registrants are required to have a signed Buyer Representation Agreement (BRA) in place before showing a buyer any properties. The BRA is a contract between you and your buyer's agent that specifies:
- The properties the agreement covers (geographic area and property type)
- The duration of the agreement
- The buyer's agent's agreed compensation rate
The BRA's compensation clause is now explicit where it was previously informal. If a seller offers a cooperating commission that's lower than the rate in your BRA, you may be required to make up the difference out of pocket. What buyers often miss is that this gap has always existed in theory — the BRA rules just made it more visible and legally binding.
In practice, most sellers continue to offer cooperating commissions that align with standard market rates, so most buyers don't pay their agent anything at closing. But it's worth asking your agent to explain the BRA's compensation terms clearly before signing.
Typical Commission Rates in the GTA
Commission rates are not regulated in Ontario and are fully negotiable. That said, common ranges in the GTA are:
| Component | Typical rate | On a $900,000 sale |
|---|---|---|
| Listing agent commission | 1.5–2.5% | $13,500–$22,500 |
| Cooperating (buyer's agent) commission | 1.0–2.5% | $9,000–$22,500 |
| Total commission | 3.0–5.0% | $27,000–$45,000 |
HST (13%) is charged on top of commission. On a $900,000 sale with 4% total commission ($36,000), the seller pays $40,680 including HST. Commission is paid from the sale proceeds at closing — the seller's lawyer deducts it before remitting the net to the seller.
Does the Buyer Ever Pay Commission Directly?
In most standard GTA resale transactions, no — the seller covers it. However, there are situations where a buyer might pay their agent directly:
- A seller offering zero cooperating commission (increasingly rare but possible)
- A buyer's BRA compensation rate higher than what the seller offers
- A private sale where no commission structure exists
- A buyer who chooses to pay their agent a flat fee or retainer for specific services
Before signing a BRA, ask: "If a seller offers less cooperating commission than your BRA rate, what happens?" A good agent will explain this clearly so you're not surprised.
Commission on New Construction
For new construction and pre-construction condos, commission structures vary by builder. Many builders pay buyer's agents directly through their own commission programs; some offer lower or no cooperating commissions on certain projects. If you're buying a new build with a buyer's agent, confirm before signing the purchase agreement that your agent's compensation is covered by the builder — or clarify who is responsible for it.
Going Unrepresented: What Buyers Give Up
Some buyers consider going unrepresented to force the seller to "keep" the buyer's agent commission as a price reduction. In Ontario, this rarely works the way buyers expect. The seller's agent typically keeps the full commission unless they've explicitly agreed to a reduction. And an unrepresented buyer loses access to market knowledge, negotiating experience, and the legal protections that come from proper representation in the Agreement of Purchase and Sale.
For more on what a buyer's agent actually does and whether you need one, see do buyers need a real estate agent and how a buyer's agent gets paid.
Looking for your next home? Browse GTA listings on Condohill and connect with an agent who can walk you through the process from offer to keys.
FAQ
Does the buyer pay real estate commission in Ontario?
In most Ontario transactions, no — the seller pays total commission from the sale proceeds, and that amount is split between the listing agent and the buyer's agent. Since January 2024, buyers must sign a Buyer Representation Agreement (BRA) specifying their agent's fee. If the seller's cooperating commission is less than the BRA rate, the buyer may need to make up the difference, but this is uncommon in most standard GTA resale deals.
What is a typical buyer's agent commission in the GTA?
Cooperating commissions offered to buyer's agents in the GTA typically range from 1.0% to 2.5% of the sale price. On a $900,000 home, this is $9,000–$22,500. The amount is set by the seller and their listing agent, not by the buyer. All commission rates in Ontario are negotiable.
What is a Buyer Representation Agreement (BRA) in Ontario?
A BRA is a legal contract between a buyer and a real estate agent that confirms the agent will represent the buyer's interests. Since January 1, 2024, Ontario agents must have a signed BRA before showing any properties. The BRA specifies the agreement's duration, coverage area, and the buyer's agent's compensation terms. Read the compensation clause carefully before signing.
Can I negotiate the commission with my buyer's agent?
Yes, commission rates in Ontario are fully negotiable. The BRA's compensation clause reflects what you and your agent have agreed to. That said, keep in mind that your agent's compensation ultimately comes from the cooperating commission the seller offers — you benefit from your agent's local market knowledge and negotiating experience regardless of where the money comes from.
Does the seller pay HST on commission?
Yes. Real estate commissions in Ontario are subject to HST at 13%. The seller pays both the commission rate and the HST on top. On a $36,000 total commission, HST adds $4,680, so the seller's total commission cost is $40,680. As a buyer, this doesn't directly affect you — it comes from the seller's proceeds.