A Breakdown of Toronto Real Estate Fees

Here’s a closer look at what you can expect to pay in Toronto real estate fees.

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 Realtor’s commission and the commission for the buyer’s agent. These fees are calculated as a percentage of the home’s final selling price, which can have a significant impact on how much you actually earn from the transaction.

This guide provides a breakdown of 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 Toronto Real Estate Fees?

Realtors are service providers. They assist you or the buyer with every aspect of the sale, 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 seller’s agent. For example, if a home in Toronto sold for $250,000, then the total real estate commission paid would be $12,500—or $6,250 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 when and if 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 commissions to either agent.

Why Toronto Realtor Fees Matter

As a seller, knowing how much you will pay to 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 must also understand how much of the sale will actually end up in your pocket. 

Additionally, 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 their fees include. Will they take professional photos or offer a video tour? 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 that you may not be seeing all of the available homes on the market that fit your criteria. This could draw out the home-finding process or make you miss out on buying a home that would have been perfect for you. 

It’s a good idea to talk 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 could ask them if they can 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 could be worthwhile to pay your agent what they’re worth.

An Alternative: Buy Before You Sell

One way to maximize your value for your money in Toronto is to consider Properly’s Buy Before You Sell service.

Properly has designed a new take on a ‘guaranteed offer’ service that unlocks the capital you need to buy your next home. Never miss out on a great home, or lose out in a bidding war, because you haven’t sold your current one.

Here’s how it works:

1. Properly will provide a guaranteed offer for your existing home, so you can act fast and bid on a new home you love.
2. Powered by your Properly guarantee, you can unlock the financing required to close on your new home. Our top local agents will help you tour homes and navigate the bidding process.
3. After you move, we’ll handle cleaning, listing, and selling your old home for top dollar while you relax and enjoy your new one.

There’s no catch. You pay the same commission any other real estate agent would charge, and we’ll pay for the mortgage on your old home until it sells. If it doesn’t sell for more than our guaranteed sale price within 90 days, we’ll buy it! If we buy your old place and sell it later for a profit we’ll refund the upside back to you. 

Properly makes home buying stress-free. Never miss out on a great home because you haven’t sold your current one. Get started here.