In Ontario, real estate agents are typically paid by commission. This means that they earn a % of the sale price of a property as their fee for their services. The commission rate is negotiated between the seller and the real estate agent/brokerage at the time of listing the property.
There is no “standard” rate charged. The commission rate can vary depending on factors such as the location of the property, the price of the property, and the complexity of the sale. Not to mention each agent can charge their own rate and this may also be relate to the amount of services provided.
Commissions are typically split between the listing agent and the selling agent. Historically it was evenly split however we now see a variety of combinations. Technically , the commission is split between the two agents' brokerages, with each brokerage receiving a portion of the commission and then disbursing the commission owed to the sales agents.
It's worth noting that in some cases, buyers may also be charged a commission by their agent, but this practice is less common. In addition, some home sellers opt to use a flat-fee or a limited service real estate agent, which will charge a flat fee rather than a commission.
Do you have more questions about how real estate agents get paid? Reach out to me today!