Thursday, September 28, 2023     Erin      Real Estate Market

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How Do Realtor Fees Work? 

When it comes to purchasing a home there are a lot of things to consider and there's a lot to learn about, such as realtor fees. Have you ever wondered what these fees are and how they’re calculated? This might be something that you haven’t given much thought about, or maybe you have questions – now is the time to learn. 

It can be a complex process when it comes to buying and selling a property, there are all sorts of things to consider. The realtor fees are an important part of that process and it’s how your realtor is compensated. Some might wonder if they have to pay the realtor out of their own pocket, but that’s not exactly how this all works. 

“In Canada, most homebuyers employ a real estate agent to help them find their next home. A realtor can help purchasers find the right home for the right price and guide homebuyers through the process. However, buyers never pay realtors directly. Instead, real estate agents are compensated by a commission on the property’s final sale price.” – RE/MAX Canada

Commission and Real Estate 

The commission that a realtor receives at the end of a sale is how they are paid. But how do we determine what the commission will be? Well, the seller, buyer and the brokerage real estate agents' fees come off of the final sale price of the property in the form of commissions. 

“Commissions for both the buyer’s and the seller’s real estate agents are taken off the proceeds of the sale. The commission is pre-determined by the seller, the seller’s agent, and their brokerage. This means that the buyer can not negotiate real estate commissions. However, the seller can sometimes negotiate real estate commissions with their own agent.” – RE/MAX Canada

So once the sale is closed, the buyer's “statement of adjustments” won’t show the commissions. The gross commission is always shown in the sellers’ statement and deducted from the sale price. 

Percentage of Commissions in Canada 

So how are these commissions determined? In Canada we use the percentage of the commission, now you might have some questions about how that works. How much and how is it all calculated? In Canada it’s usually between three and seven percent of the purchase price – this is also determined by the region and the real estate agent, this is done by using a contract.

“When a house is listed for sale, the listing agent and the seller agree to a gross commission split between the seller’s agent and the buyer’s agent. The agreement is outlined in the listing contract, signed by the seller, the seller’s agent, and the seller’s brokerage, if applicable. The buyer has no signing authority or disclosure on the listing contract or gross commission.” – RE/MAX Canada

It was explained by RE/MAX Canada, that commissions are determined by the sellers’ statement of adjustments. The lawyer or notary will then send those commissions to the agent or to the brokerage. 

Contact the VanDinther Team at We Sell Millcroft 

We hope that this made some sense and that will help you better understand when it comes time to sell or purchase a residential property. The VanDinther Team is a group of highly knowledgeable real estate professionals that work specifically in the Millcroft area. This is Burlington’s most sought after area and if you’re considering selling or buying in this area please contact the team today. 

The VanDinther Team can be reached by either phone or email at any time. To contact the team by phone, please call 905-330-2002 and email directly to When it comes to helping you find the right property, you can count on the VanDinther Team to deliver. 

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We Sell Millcroft Team