Commission is often the biggest closing cost a seller faces — yet most Ontario homeowners have never had a straightforward conversation about how it actually works, what's changed, or whether they can push back on the number. This guide breaks it all down in plain language, including what the 2024 TRESA reforms mean for buyers and sellers right now in 2026.

How Real Estate Commission Works in Ontario (The Basics)

Real estate commission in Ontario is a fee paid to licensed agents for their services in facilitating a home sale. It is calculated as a percentage of the final sale price and has traditionally been split between two agents: the listing agent (who represents the seller) and the buyer's agent (who represents the buyer).

Here is the key point most people miss: there is no fixed or "standard" commission rate in Ontario. RECO (the Real Estate Council of Ontario) has confirmed that commission is entirely negotiable. Any agent who quotes you a flat "5% is the standard" is either misinformed or not being straight with you.

Historically, total commission across both sides ranged from 3.5% to 5% of the sale price. On a $900,000 home, that's $31,500 to $45,000 before HST — a significant sum. Understanding what drives that number, and how the rules have recently changed, is essential before you list.

Important: Commission is paid at closing, not upfront. Your real estate lawyer deducts it from the sale proceeds before transferring the balance to you. You never write a cheque — it comes off the top.

HST on Real Estate Commission

Real estate commission is a taxable service. Ontario's HST of 13% applies to the commission amount. This is a meaningful additional cost that many sellers overlook when budgeting. On a $34,000 commission, HST adds $4,420 — bringing the total out of pocket to $38,420. Always factor HST into your commission math.

What Sellers Pay: Listing Agent Commission in 2026

As the seller, you sign a listing agreement with your agent that sets out the commission rate for their services. In 2026, a typical listing agent fee in Ontario falls between 2% and 2.5% of the final sale price.

What does the listing side of the commission cover? In short, everything required to market, show, and close the sale of your home. A good listing agent earns their fee through:

Seller tip: Before signing, ask your agent for a written marketing plan. The plan tells you exactly what you're paying for. If they can't produce one, that's a red flag.

Commission is outlined in your listing agreement, which is a legally binding contract. Once signed, you are committed to that rate for the duration of the agreement — typically 60 to 90 days. Make sure you're comfortable with the number before you sign.

The Big Change: How Buyer Agent Fees Work After TRESA 2024

This is the most important shift in Ontario real estate in years. Under reforms to the Trust in Real Estate Services Act (TRESA), which took full effect in December 2023, the way buyer agent fees are handled changed fundamentally.

What changed under TRESA

Before TRESA: The seller's listing commission included a portion explicitly earmarked for the buyer's agent — typically 1.5% to 2.5%. Sellers offered this "co-op commission" to attract buyer agents. Buyers assumed they were getting representation for free, but the cost was always embedded in the sale price.

After TRESA: Buyer agents must now have buyers sign a Buyer Representation Agreement (BRA) before showing any home. This agreement sets out — in writing — exactly what the buyer's agent will be paid, and who is responsible for paying it. The buyer now directly negotiates and is contractually responsible for their agent's fee.

What this means in practice: Sellers are no longer automatically required to offer buyer agent compensation as part of their listing. The buyer's agent fee is a separate negotiation between buyer and agent — completely independent of the seller's commission. This is a major transparency shift, similar to the 2024 NAR settlement in the United States.

What buyers are paying in 2026

Buyer agent fees are now quoted in a few different ways:

The BRA spells out the fee structure and duration. If a seller does offer buyer agent compensation in their listing, it can be applied to offset what the buyer owes their agent — but this must be transparent and documented.

For sellers, this change means your listed commission now only needs to account for your own agent's services. Whether and how much you offer toward buyer agent compensation is a strategic decision you make with your listing agent.

Real Commission Examples on Ontario Home Sales

Let's make this concrete. The table below shows the estimated commission (listing agent side only) and total cost including HST across a range of Ontario home prices and commission rates. These figures do not include any buyer agent compensation offered by the seller.

Sale Price 3% Commission + HST (13%) 3.5% Commission + HST (13%) 4% Commission + HST (13%)
$600,000 $18,000 $20,340 $21,000 $23,730 $24,000 $27,120
$700,000 $21,000 $23,730 $24,500 $27,685 $28,000 $31,640
$800,000 $24,000 $27,120 $28,000 $31,640 $32,000 $36,160
$850,000 $25,500 $28,815 $29,750 $33,618 $34,000 $38,420
$1,000,000 $30,000 $33,900 $35,000 $39,550 $40,000 $45,200
$1,200,000 $36,000 $40,680 $42,000 $47,460 $48,000 $54,240
$1,500,000 $45,000 $50,850 $52,500 $59,325 $60,000 $67,800

If the seller also offers buyer agent compensation — say, 1.5% on an $850,000 sale — that adds another $12,750 + HST ($14,408) to the total seller cost, bringing the full commission outlay to roughly $52,828 at 4% total (both sides) including HST.

Quick calculation on a typical $850K sale at 4% total commission: $34,000 commission + $4,420 HST = $38,420 in total commission costs to the seller (listing side only).

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Is Real Estate Commission Negotiable in Ontario?

Yes — and this point cannot be overstated. Real estate commission in Ontario is 100% negotiable. There is no law, no RECO rule, and no industry body that sets a minimum or standard commission. If an agent tells you their rate is non-negotiable, you are free to walk away and interview other agents.

How to negotiate commission without costing yourself money

Here is the nuance: going with the cheapest agent is not the same as negotiating a good deal. A lower commission is meaningless if the agent underprices your home, markets it poorly, or folds in negotiations. The goal is value for the fee you pay, not the lowest possible percentage.

Smart commission negotiation looks like this:

The bottom line: A skilled agent who charges 2.5% and sells your home for $30,000 over asking puts more money in your pocket than a discounted agent at 1.5% who sells it at or below list.

What Do You Actually Get for the Commission?

It's fair to ask. On a million-dollar home, a 2.5% listing commission is $25,000. Here is a breakdown of what a full-service listing agent should deliver for that fee:

Pre-listing preparation

Active marketing

Negotiation and transaction management

A good listing agent is also your negotiator, your advisor, and often the person who keeps a deal together when something unexpected comes up. That experience — knowing when to hold firm on price, when to accept a condition, when to walk away from a toxic buyer — is where the fee earns itself back.

Want to see what I bring to every listing? Explore my seller tools and resources here.

Private Sales (FSBO) in Ontario: Do You Save Money?

A For Sale By Owner (FSBO) sale is fully legal in Ontario. You market your own property, handle your own showings, negotiate directly with buyers, and coordinate closing with a real estate lawyer. The appeal is obvious: no listing commission.

But the actual savings are less clear-cut than they appear.

What you give up with a private sale

The FSBO numbers

Multiple studies on FSBO sales consistently show that privately listed homes sell for 5–15% less than agent-represented homes, even after accounting for the commission savings. On an $850,000 home, a 7% underperformance equals $59,500 — far more than the $21,250 listing commission at 2.5%.

The math is usually not in your favour. FSBO makes the most sense in a red-hot seller's market where almost any listing generates multiple offers. In a balanced or buyer's market — where professional pricing, marketing, and negotiation matter most — the cost of going it alone typically exceeds the savings.

If cost is the primary concern, a better alternative is a full-service agent who offers a competitive commission, rather than a DIY approach that leaves money on the table.

Thinking about timing your sale? Read: The Best Time to Sell a Home in Ontario — and understand how market timing can affect your net proceeds just as much as commission rate.

Questions About Commission? Let's Talk.

I offer transparent, competitive fees and a full-service marketing plan for every listing. Call or text Jerold directly — no pressure, no obligation.

Call Jerold: (647) 291-3755

Frequently Asked Questions

Is real estate commission taxable in Ontario?
Yes. Real estate commission is subject to HST at 13%. The commission itself is the agent's fee — HST is charged on top of that amount. If your total commission is $34,000, you will also owe $4,420 in HST, bringing your total cost to $38,420. This applies to both listing agent and buyer agent fees.
Can I negotiate realtor fees in Ontario?
Absolutely. There is no fixed commission rate in Ontario — it is 100% negotiable. RECO explicitly confirms this. Interview multiple agents, ask what they charge and what services are included, and compare the full value proposition — not just the percentage. A lower fee with weaker service often costs more in the end.
Do buyers pay real estate commission in Ontario?
Under the TRESA 2024 reforms, buyers now directly negotiate and sign a Buyer Representation Agreement (BRA) with their agent before any showings. This agreement sets out the buyer's agent fee and who pays it. Previously, the buyer agent fee was embedded in the seller's total commission. The change makes the fee structure fully transparent — buyers know exactly what their agent earns and on what terms. If a seller offers buyer agent compensation in their listing, it can offset what the buyer owes their agent.
What is a typical real estate commission in Ontario?
There is no mandated "standard" commission. Historically, total commission (both sides) ranged from 3.5% to 5%. Under the current TRESA framework, listing agent fees typically run 2–2.5%, while buyer agent fees are now negotiated separately — commonly $15,000–$20,000 flat or 1.5–2% of the purchase price. Always verify what services are included before comparing rates.
Can I sell my house without a realtor in Ontario?
Yes, private sales (FSBO) are legal in Ontario. You keep the listing commission but lose MLS/Realtor.ca exposure, professional negotiation, and transaction guidance. Research consistently shows FSBO homes sell for 5–15% less than agent-listed homes, which often wipes out the commission savings. In most market conditions, working with a full-service agent produces a better net outcome for the seller.
What happens if I sell my house before my listing agreement expires?
You are typically still obligated to pay the agreed commission if the sale occurs within the agreement period. Most listing agreements also include a holdover clause — usually 30–60 days after the agreement expires — during which commission may still be owed if you sell to a buyer who was introduced to the property during the active listing period. Read your listing agreement carefully, and ask your agent to explain the holdover terms before signing.

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