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A breakdown of Toronto real estate fees

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Looking to buy a new home in Toronto but need to sell your old place first?

One of the fees you’ll be expected to pay is your real estate agent’s commission — plus the commission for the buyer’s agent. These commissions are calculated as a percentage of your home’s final sale price, which can have a significant impact on how much you actually earn from the transaction.

Below we’re breaking down how REALTOR® fees work in Toronto and what buyers and sellers need to know to get the most value for their dollar.

How much are typical Toronto agent fees?

REALTORS® are service providers. Whether you’re a buyer or seller, they assist you with every aspect of the real estate process, from navigating legal paperwork to handling negotiations and more. And like most things in life, you truly do get what you pay for. 

In Toronto and other cities in Ontario, the standard real estate commission is 5%, which is usually split equally between the buyer’s agent and the seller’s agent. For example, if a home in Toronto sold for $1,000,000, the total real estate commission paid would be $50,000—or $25,000 to each agent.

However, the commission split can vary depending on the terms arranged by the seller. For example, the seller may want to give the buyer’s agent 3%, and their own agent will keep 2% to encourage more showings of the home. This split is entirely negotiable and is often used as a strategic tool to help sell homes faster.

The good news for home sellers is that you only pay commissions if and when your home sells. These fees are paid at the time of closing, so if your home doesn’t sell (or if a transaction falls through) you’re not obligated to pay either agent.

Why Toronto real estate agent fees matter

As a seller, knowing how much you’ll have to pay when you sell your home can make a huge difference when it comes to choosing a listing price and accepting an offer. It’s not enough to look at the base amount — you also need to understand how much of the sale price will actually end up in your pocket. 

On top of that, not all real estate agent services are created equal, regardless of price. Agents should be able to justify their fees and what’s included, along with how they’ll achieve results for you. It’s a good idea to have this conversation with the agent before hiring them to ensure an optimal outcome for both sides.

Seller’s agent commission

Since you’re paying as much as 5% of your home’s selling price to REALTORS®, you deserve to know exactly what you’re paying for. Ask your REALTOR® about what’s included in their fees. Will they take professional photos or offer video tours? Do they help with home staging? Will they be readily available for showings and proactively market your home? 

Sometimes, it’s worth it to pay a little more if it means getting more value from the service.

Buyer’s agent commission

The seller typically pays commissions for the buyer’s agent and seller’s agent. However, there are no laws stating how much of the sale the buyer’s agent is entitled to. If a seller is offering the buyer’s agent less than half of the commission split, then the buyer’s agent may be less inclined to show the home to their clients. 

As a buyer, this means you may not be seeing every available home that fits your criteria. This could draw out the home search process or lead to you missing out on a place that would have been perfect for you, so it's a good idea to speak with your real estate agent upfront to avoid these potential circumstances.

How to negotiate on real estate fees in Toronto

If you’re not eager to pay 5% in real estate commission fees, you may be able to negotiate a lower rate with your agent and/or the buyer’s agent. 

When hiring an agent, you can always ask them if they’re able to lower their fees. Many of them will do it to secure the listing. However, keep in mind that agents who accept lower fees may be unable or unwilling to offer more than the bare minimum services. If you need to sell quickly or get top dollar for your home, it may be worthwhile to work with a full-service agent at a higher cost.

An alternative: Working with Properly

One way to maximize the value for your dollar in Toronto is to work with Properly. With Properly’s Sale Assurance, you can buy a new home right when you find the one you love, and move in while our expert agents stage and sell your old place for the best possible price. Here’s how it works:

Step 1: Buy using your current home’s equity

Properly’s Sale Assurance allows you to access your equity and secure financing when you need it, so you never miss a chance at the right home.

Step 2: Move on your terms 

With our Sale Assurance commitment, you can buy and sell on your timeline – there’s no financial pressure to line up dates. 

Step 3: Sell from the comfort of your new home

While you settle into your new place, Properly will prep, list, and show your old home to get you the best price on the market.

Get the details >

Properly is a Canadian tech-enabled real estate brokerage transforming the home buying and selling experience as the only service in Canada that helps homeowners to buy before they sell.

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