1. What is Real Estate Commission?

Real estate commission is the fee paid to real estate agents for their services in facilitating the sale or purchase of a property. In Ontario, commissions are typically calculated as a percentage of the final sale price.

2. How Does the Calculator Work?

The calculator uses the simple commission formula:

Where:

• \( Sale\ Price \) — Final selling price of the property (CAD)
• \( Rate \) — Commission rate as decimal (e.g., 0.05 for 5%)

Explanation: The calculation multiplies the sale price by the agreed-upon commission rate to determine the total commission amount.

3. Importance of Commission Calculation

Details: Understanding commission costs helps sellers budget for their sale and helps buyers understand potential costs when working with a buyer's agent.

4. Using the Calculator

Tips: Enter the sale price in CAD and the commission rate as a decimal (e.g., 0.05 for 5%). All values must be valid (price > 0, rate between 0-1).

5. Frequently Asked Questions (FAQ)

Q1: What is the typical commission rate in Ontario?
A: Rates typically range from 3.5% to 5% of the sale price, but are always negotiable between the seller and their agent.

Q2: Is commission split between buyer and seller agents?
A: Yes, the total commission is usually split between the listing agent and buyer's agent, with each typically receiving 2-2.5%.

Q3: Are commissions subject to HST in Ontario?
A: Yes, HST (13%) is added to the commission amount in Ontario.

Q4: Can commission rates vary?
A: Yes, rates can vary based on property type, location, market conditions, and individual agreements with agents.

Q5: Are there alternatives to percentage-based commissions?
A: Some agents offer flat-fee or tiered commission structures, especially for higher-value properties.