How To Calculate Real Estate Commissions in Toronto

Fivewalls: How Do You Calculate Real Estate Commission In Toronto?

Sellers, Buyers, Commission
Last Updated: Sep 13, 2019

When you want to professionally buy or sell property, use a REALTOR®. Despite having to pay their commission, they know how to market your home and connect you with other industry experts, as well as negotiate prices on your behalf to make sure you get the home of your dreams.

How exactly does commission work? Fivewalls has created a breakdown for you.

What Is Commission In Real Estate?>>

Commission is what you’re paying your REALTOR® for their services and the amount can vary per agent. But, typically, in Toronto 5% of the sale price of your home is split evenly between the listing agent and the buying agent, so they will each receive 2.5%. A portion of that 2.5% (depending on their agreement with their brokerage), will be split again between their brokerage and themselves.

How To Calculate What You Owe Your Real Estate Agent In Commission

Once you’ve received an offer that is set in stone on your home, it is very easy to calculate the amount your agent will make.

For example:

If your home sells for $875,000 and your agent was charging you the typical 2.5%, it would be calculated as such:

$875,000 * 2.5%



Therefore, of the $875,000, your agent will be receiving $21,875. This means the buyer's agent will also be receiving the same amount (if their commission wasn't negotiated otherwise).

What Does Real Estate Commission Cover?

what is the real estate commission in Toronto?, average real estate commission in Toronto, how to calculate what you owe your realtor in Toronto, top realtors in Toronto, real estate agents in Toronto, what am I paying my realtor for?, what does real estate commission cover?, Toronto real estate market, Toronto, real estate, how real estate agents are paid, is it free to use a realtor as a buyer?This is an important question that should be discussed as you’re interviewing different agents. When you’re buying, that commission is covering the listings your agent is showing you, as well as organizing the showings. They’re also your local expert who can match you with the right neighbourhood, and they’re most likely going to negotiate a great deal on your behalf.

When you're selling>>that commission is covering the marketing of your home. From advertising on social media platforms to the newspaper and magazines, or even on the side of buses. They're also in charge of organizing open houses and getting your home to look it's absolute best with the help of stagers and photographers.

Who Is Paying Their Commission?

Technically, the seller is paying the commission since it will be included in the sale price of the home. When sellers do not use an agent, the asking price will be lower.

Can You Negotiate Real Estate Commission?

Of course, you can negotiate the commission, and if you're working with a trusted, professional agent, they'll explain why they may or may not lower their commission. The saying "you get what you pay for" may ring true in this case. Full-service agents>> are able to utilize all their tools to market your home or search for homes that suit your criteria, including homes that haven't hit the market yet. 1% commission agents, though they still work very hard, may not be able to deliver on promises like having a stager come in, or being able to advertise on various platforms. Remember that the more money you spend, the more exposure your home will have, which may lead to very promising results.

Once you’ve hired a REATOR® and they’ve been able to successfully either sell your home or help you purchase a new one, the final sale price can be multiplied by the typical commission of 2.5% to determine what you will owe them once the deal has closed. An honest agent who has your best interests at heart will explain why they will or will not negotiate their commission, the main reason being they want to provide you with as many of their high-quality services as they can.

Disclaimer: rates subject to change.


Check for top Fivewalls agents in Toronto here:

Laddi D. Realtor Profile Photo

Agent Name: Laddi D. |  View Agent Profile>>

Serving Area: Brampton, Caledon, Mississauga

"I want to make the experience pleasant and stress-free for my clients. I treat each and every one as though they were my own family."

Eily L. Realtor Profile Photo

Agent Name: Eily L. | View Agent Profile>>

Serving Area: North York, Toronto, York

Eily has lived in Toronto for over 43 years now and know its neighbourhoods very well. No matter your price range, she can successfully assist you in buying or selling new construction, investment properties, detached or semi-detached homes, condos, and more.

Barry L. Realtor Profile Photo

Agent Name: Barry L. | View Agent Profile>>

Serving Area: Toronto

"I've been actively involved in real estate since 1968 and I couldn't be more honoured to be considered one of Canada's most recognized real estate professionals."