If you’re planning to buy or sell a home, it’s natural to want clarity around costs — particularly when it comes to realtor fees. One of the most common questions we hear is who pays realtor fees in Ontario, often followed closely by questions about how Realtors get paid, how Realtor commission works, and how these fees relate to overall closing costs.

While the answers are relatively straightforward, they are often explained without enough context. Understanding how real estate fees in Ontario are structured can help both buyers and sellers plan more confidently and avoid unnecessary uncertainty as they move through the process.

Understanding Realtor Fees in Ontario

In Ontario, Realtors are compensated through commission, which is agreed upon in advance and outlined in a written agreement. Commission is most often paid once a transaction has successfully closed and is typically calculated as a percentage of the final sale price. In some situations — such as new construction or builder agreements — compensation may be structured differently, with payments made in instalments or at earlier stages of the transaction, depending on the terms agreed upon.

While both buyers and sellers benefit from professional representation, realtor fees in Ontario are most commonly paid by the seller. This structure is widely seen across residential transactions, though the implications are often misunderstood.

Rather than being a separate, unexpected cost, commission forms part of the overall financial framework of a sale and is factored into pricing strategy from the outset.

Who Pays the Real Estate Agent?

In most Ontario real estate transactions, the seller pays the real estate agent. More specifically, the seller agrees to a total commission, which is then shared between the listing agent and the buyer’s agent.

This can be confusing for buyers, particularly first-time buyers, who may wonder whether they are responsible for paying their agent directly. In most cases, buyers do not write a cheque for realtor fees. Instead, the buyer’s agent is compensated through the commission paid by the seller as part of the transaction.

While the seller pays the commission from the sale proceeds, it’s important to understand that commission is a negotiated term and part of the broader financial picture for both parties.

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How Do Realtors Get Paid?

Realtors in Ontario are compensated through commission, with payment structures defined in advance through written agreements. In many resale transactions, commission is paid upon successful completion of a sale, aligning compensation with outcomes rather than individual tasks such as listing a property or hosting showings. In other scenarios — including some builder or development sales — commission may be paid in stages or prior to final closing, depending on the agreement in place.

From that commission, Realtors cover a wide range of professional expenses, including brokerage fees, marketing costs, professional insurance, licensing, and ongoing education.

Commission is also typically shared. A portion is paid to the brokerage, with the remainder going to the individual agent, which is why commission terms are discussed upfront and clearly documented before any work begins.

How Does Realtor Commission Work?

Commission is generally expressed as a percentage of the final sale price, with rates set by individual agents or teams and agreed upon in advance through a written agreement. Commission structures may vary based on the services selected, the scope of work involved, and the nature of the transaction.

Once a home sells, commission is distributed according to the terms of the listing agreement and any cooperating brokerage arrangements.

For sellers, commission reflects far more than exposure on a listing platform. It encompasses pricing strategy, market positioning, negotiation, professional marketing, transaction coordination, and guidance through what is often a complex legal and financial process.

What This Means for Buyers

From a buyer’s perspective, it’s helpful to understand that while buyers typically do not pay realtor fees directly, those fees still form part of the overall transaction. In most cases, the buyer’s agent is compensated through the commission offered by the seller.

However, in certain situations — such as private sales or transactions where the seller is not offering commission — a buyer representation agreement may require the buyer to pay their agent directly. In these cases, a knowledgeable buyer’s agent plays a critical role in negotiating the purchase price with the buyer’s total budget in mind, factoring in commission so the buyer is not overpaying relative to market value.

Buyers should also be aware that realtor fees are separate from closing costs, which are expenses buyers are responsible for paying out of pocket and should be planned for early in the process.

What Are Closing Costs?

Closing costs are distinct from realtor fees and affect both buyers and sellers.

For buyers, closing costs in Ontario often include land transfer tax, legal fees, title insurance, lender-related charges, and adjustments for property taxes or utilities. These costs are paid in addition to the purchase price and are not covered by realtor commission.

For sellers, closing costs may include legal fees, mortgage discharge fees, and adjustments. While realtor commission is typically the largest expense associated with selling, it is not the only cost to consider.

Understanding the difference between realtor fees and closing costs helps both sides plan more accurately and avoid surprises at the end of the transaction.

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Looking Beyond the Percentage

When evaluating realtor fees, it’s worth considering not just the percentage, but what’s behind it. Commission rates are not fixed by law, allowing fees to reflect the specific property, prevailing market conditions, and — most importantly — the scope of services being provided.

At the Wright Team, commission is tied to a comprehensive approach that extends well beyond placing a listing online. From pricing strategy and market analysis to professional marketing, negotiation, and transaction management, the services included are designed to protect value and guide the process from start to finish. For many sellers, these elements have a far greater impact on the final outcome than a marginal difference in commission.

Thoughtful preparation, targeted exposure, strong negotiation, and experienced oversight can materially influence both the sale price and the experience itself — a distinction outlined in more detail throughout our selling process at ottawahomes.ca.

Bringing Cost Clarity Into Focus

Understanding who pays realtor fees in Ontario, how Realtors are compensated, and how commission works allows both buyers and sellers to move forward with greater confidence and fewer assumptions. When the financial structure of a transaction is clearly understood, the process itself tends to feel more straightforward and far less stressful.

At the Wright Team, we believe real estate decisions are strongest when they’re made with clarity and context, not assumptions. Whether you’re buying, selling, or simply gathering information, understanding how realtor fees work plays an important role in planning well. When the financial structure is clear, the rest of the process tends to unfold with greater ease and confidence.

Heading to the market? We’d be honoured to help. Call 613-692-0606 to get in touch, or reach us by email at info@ottawahomes.ca.