Kelly Koselek

Many clients have questions about how real estate agents get paid, who pays the commission and how much they get. I am going to attempt to explain it, but please feel free to ask any questions about anything that I may not have adequately covered or have not covered.

Who pays the Real Estate Commission and how much is it?

The Seller pays the commission. Currently, it is typically 5% of the selling price. So, on an $800,000 house, the Seller would pay $40,000 (at 5%) + GST. When buying a house / condo, there are no real estate fees payable by the Buyer.

How is that $40,000 divided?

There are 2 sides to every real estate transaction – the listing broker (real estate company that has the house for sale) and the selling broker (real estate company that supplies the purchaser/buyer). Each side typically gets half or in our example, $20,000 each.

That half ($20,000) is then split between the broker (owner of the real estate company) and the sales rep. The splits vary from company to company and from sales rep to sales rep, but typically they would have a 60% / 40% (rep/broker) split or up.

When is the commission paid?

Once the house has closed. The Lawyer takes the commission amount out of the proceeds of the sale and distributes them to the Real Estate Office. The sales rep usually gets their share of the commission 4-12 business days after the house has closed.


KELLY KOSELEK, BSc, M.B.A. Bus. 416-489-2121 Cell:647-273-7597
Royal LePage Real Estate Services Ltd, JOHNSTON & DANIEL DIVISION, Brokerage