In most residential real estate transactions in Ontario, the seller pays the real estate commission.
When a homeowner lists a property for sale, they sign a listing agreement with their brokerage. This agreement outlines the total commission that will be paid when the property sells.
That commission is typically split between two sides of the transaction:
The listing brokerage, which represents the seller.
The buyer’s brokerage, which represents the buyer.
When a buyer purchases a property with the help of a real estate agent, the buyer’s agent is usually paid through this shared commission that the seller agreed to in the listing agreement.
Because of this structure, buyers typically do not pay their agent directly in most residential transactions.
Commission rates are not fixed by law in Ontario. They are negotiated between the seller and the listing brokerage before the property is listed for sale.
Once the sale closes, the commission is paid out of the sale proceeds and then divided between the brokerages involved in the transaction.
