As of 2024, the real estate market in Ontario, Canada continues to thrive and evolve, despite all the obvious challenges that came with the recent global pandemic. This remarkably resilient and adaptable real estate market continues to punch above its weight, and with it, real estate commission rates hold steady as ever. Real estate agents who are just entering the field can benefit greatly from an understanding of the current commission rates in the province, which are crucial when factoring in budgeting and planning for this most significant financial transaction.
WHAT TO KNOW
In Ontario, real estate commission rates aren’t actually regulated, meaning that they are negotiable between the seller and the real estate agent, or brokerage. However, that doesn’t mean sellers can simply lowball their agents in order to maximize their profits. Commission rates are tied directly to the performance of the agent in question. To start off, it’s important to remember that the total commission rate is typically split between the listing agent, and the buyer’s agent, which signifies the complex relationship between the two.
As of 2024, the average real estate commission rate in Ontario is around 4-5% of the final sale price of a home, and this rate is often divided equally between the listing agent and the buyer’s agent, with each party receiving 2-2.5% of the total commission. These commission rates can fluctuate slightly, depending on several factors, such as the location and type of property, as well as the level of service provided by the agent, or brokerage. To put things into perspective, a luxury property, or one located in a highly competitive market may command a higher commission rate due to the increased level of expertise and resources required to sell the property.
NEGOTIATIONS
Negotiating commission rates is largely a matter of balancing out the value of services provided by the agent or brokerage, along with the property in question. A lower commission rate may seem appealing to a seller looking for the highest payout, but it often comes at the expense of a qualified and seasoned agent or brokerage with the necessary experience, resources, and networking capabilities to effectively market and sell the property.
There is some flexibility, however. Certain agents and brokerages may offer alternative commission structures, including flat-fee or performance-based commission models which are more attractive to sellers looking for some reassurance and predictability when it comes to the final selling price. Since commission fees are paid out by the seller of a property, this only stands to reason. Similarly, there are instances where the buyer’s fee may not be paid by the seller, such as when a home is put up for sale independent of an agent.
CONCLUSION
Real estate commission rates in Ontario remain negotiable, but make sure to take into account all the information listed above in order to gain an accurate understanding. When buying or selling a property, it’s essential to understand the current commission rates, so that you can better negotiate with your clients, and provide the best level of service so that both sides close the deal happily. It will also allow you as a real estate agent or brokerage to effectively budget and plan your strategy, so you can sell a home faster, and receive your commission.
As always, Rocket Advance is on standby to assist with that last part. We realize that sometimes it takes a while for commission payments to arrive, and if you’re just starting out as an agent, we know how tough this can be. Even experienced agents may want to receive their commission payouts quicker than usual, and our process makes this easy. Contact us today, so you can worry less about your incoming commissions, and more on closing the next deal!
