by Faiza Ahmed (Broker) Canadian homeowners today aren’t just asking what commission rates are—they’re asking what’s fair.
With options ranging from full-service brokerages charging 4–5% to newer discount and flat-fee models starting around 1%, the landscape has shifted.
As someone who’s worked with clients across all three models, I’ve seen firsthand the pros and cons.
Below is a quick, honest breakdown of what each approach offers—so you can decide what “fair” looks like for you.
Comparing Commission Models: Pros and Cons
| Commission Type | Pros | Cons |
|---|---|---|
| Traditional (4–5%) | ✔️ Comprehensive service ✔️ More personalized attention ✔️ High incentive for maximum price | ❌ Higher costs ❌ Not always justified by service differences |
| Discount (1-3.5%) | ✔️ Substantial cost savings ✔️ Predictable fees ✔️ Appealing transparency | ❌ Often excludes home staging |
| Flat-Fee Real Estate | ✔️ Lowest possible fees ✔️ Clarity upfront ✔️ Beneficial in hot seller markets | ❌ Often excludes home staging |
Evaluating What’s “Fair”
Fairness in commission isn’t merely about lower prices—it’s about value delivered versus cost incurred. A fair commission should reflect:
Traditional Commission Structures: Understanding the Norm
Historically, Canadian real estate commissions have hovered around 5% of the home’s final sale price, split between the buyer’s and seller’s real estate agents. For example, on a $800,000 home, sellers might expect to pay around $40,000 in total commissions, $20,000 each to the buyer’s and seller’s agents.
Yet critics argue that commission rates in Canada have not significantly decreased despite soaring property prices, causing growing skepticism about their fairness.
The Emergence of Lower Commission Alternatives
In recent years, Canadians have seen the rise of alternative real estate brokerages offering significantly reduced fees. Flat-fee, discount real estate services, and hybrid brokerages have emerged, disrupting traditional models.
While these options present clear financial advantages, some critics argue that lower commissions may result in reduced services—fewer open houses, less personalized attention, and diminished marketing. However, this isn’t always the case.
Although staging services may not be included in many low-commission packages, many agents operating under a reduced fee structure still offer full-scale service comparable to traditional agents. The key difference lies not in the commission rate, but in the competency of the agent.
Homeowners can protect themselves by taking a structured approach to selecting a representative:
- Reach out to multiple agents,
- Conduct thorough interviews, and
- Assess each candidate’s ability to price, market, and negotiate effectively.
This due diligence helps ensure sellers choose an agent who’s equipped to deliver results—regardless of whether they charge 1% or 5%.
The Impact of Regulation and Competition
Canadian real estate markets have increasingly drawn scrutiny from regulators such as the Competition Bureau of Canada, emphasizing the importance of transparency and competitive fairness. The Bureau encourages competition, believing it will naturally push commissions toward fairer levels for consumers.
Indeed, growing digital real estate tools and platforms fostering direct seller-buyer interactions—such as virtual tours, online listings, and digital transaction management—pressure traditional brokerages to justify their higher commission rates, further fueling the debate about fairness and value.
Making an Informed Decision
Ultimately, determining a “fair” commission comes down to consumer choice, informed by thorough research, personal comfort with involvement in the selling process, and a clear understanding of the trade-offs inherent to each brokerage model.
Consumers should actively:
- Compare services explicitly: Not all discount options are equal; understanding what each brokerage provides at their respective fees is critical.
- Interview multiple agents: Whether traditional or low-cost, agents should articulate clearly what services they offer and why their fees are justified.
- Evaluate recent performance: A fair commission aligns closely with an agent’s actual track record, market-specific expertise, and demonstrated negotiation success.
Conclusion: Redefining Fairness in Real Estate
In the end, fairness in real estate commissions isn’t a fixed number—it’s an ongoing conversation about value, transparency, consumer education, and market competitiveness. Whether a homeowner opts for traditional full-service brokerage or explores discount alternatives, clarity on expectations, realistic assessments of services provided, and transparent pricing structures are essential components of fairness.
As the market evolves, what is considered fair today may shift, driven by technology, consumer advocacy, and continued regulatory oversight, further shaping the future landscape of Canadian real estate commissions.