Real Estate Commissions Explained: What You Should Know When Selling with JFRE
What Are Real Estate Commissions in Toronto?
When selling your property, one of the first questions that come to mind is: “How much will it cost me in commissions?” At Jacobson Fernandez (JFRE), we believe in full transparency, ensuring our clients know exactly what they’re paying for and why. Real estate commissions in Ontario can vary significantly depending on the brokerage, the services offered, and the agreement you negotiate. Understanding these differences is crucial for making an informed decision when choosing an agent to represent your property.
The Basics of Real Estate Commissions in Toronto
In Toronto, it’s common for the commission rate to be around 5% of the property's final sale price. This fee is usually split between the listing agent and the buyer's agent, with each receiving 2.5%. The commission is deducted from the sale proceeds at closing, and the amount is subject to HST. However, unlike common belief, these rates aren’t fixed and are open to negotiation between the seller and the listing brokerage.
How Do Real Estate Commissions Work?
Real estate commissions can be structured in several ways, allowing sellers to find a model that best suits their needs:
Percentage of the Sale Price: The most traditional approach where the commission is a fixed percentage of the property’s sale price.
Fixed Dollar Amount: A flat fee agreed upon regardless of the final sale price.
Hybrid Structure: A combination of a percentage and a fixed fee, offering flexibility based on specific circumstances.
We emphasize value over cost alone. We believe that a good agent doesn’t just put up a sign and hope for the best; instead, they should actively market the property, negotiate effectively, and use every tool at their disposal to achieve the best outcome. This is why understanding what’s included in your agent’s commission—and what sets them apart—is crucial before committing to any agreement.
Our JFRE Commission Packages
We offer two distinct commission packages at JFRE, designed to cater to different client needs while ensuring top-tier service:
JFRE Full-Service Package | Full Commission
Our full-service package provides a comprehensive approach, ideal for sellers who want maximum exposure and a stress-free process. This package includes:
Expert property staging and styling to highlight the best features of your home.
Detailed professional floor plans to give buyers a clear layout of the property.
Extensive advertising campaigns targeting both local and international markets.
High-quality professional photography and videography to make your listing stand out.
A dedicated, custom-built property page to provide potential buyers with all the information they need.
Strategic social media marketing, including sponsored ads on popular platforms like Facebook and Instagram.
A full suite of digital and print marketing materials, tailored to reach the right audience.
What’s Not Included in the Full-Service Package:
Painting, minor repairs, or upgrades
Storage fees for personal items and furniture
Cost of movers for removal and return of personal items and furniture
Pre-listing home inspection (for freehold properties)
Status certificate (for condos)
JFRE Essential Services Package | Reduced Commission
For sellers who need core marketing support but don’t require the full spectrum of staging and styling, our essential services package offers:
Professional photography to showcase your property.
A custom property page to inform and attract buyers.
Social media syndication and targeted sponsored advertising.
Essential digital and print marketing materials.
This package excludes extensive services like staging and professional videography but is perfect for properties that are already market-ready or for those looking to minimize upfront costs.
Understanding the Costs: A Real-World Example
To give you a clearer picture, here’s how commissions typically work:
Property Sale Price: $900,000
Commission Rate: 5% (2.5% to listing agent, 2.5% to buyer’s agent)
Total Commission: $45,000 + HST
It’s a common misconception that the listing brokerage retains the entire commission. Instead, the fee is split between the listing and buyer’s agents, each covering their own marketing expenses, brokerage fees, and operational costs. At JFRE, a significant portion of our commission goes towards high-impact marketing efforts and providing exceptional client service, which ensures a smoother sale process and often results in a higher sale price.
Why Choose JFRE for Your Real Estate Needs?
Choosing JFRE means choosing a team committed to delivering exceptional value. Here’s why our clients trust us:
Personalized Approach: We tailor our services to meet your unique needs, whether that means handling everything from staging to closing, or focusing on strategic marketing support.
Market Expertise: With a deep understanding of Toronto’s diverse neighborhoods, we provide insights and strategies that maximize your property’s appeal and value.
Proven Results: Our track record speaks for itself. We consistently achieve top market prices for our clients through skilled negotiation, innovative marketing, and unwavering dedication.
Are Real Estate Commissions Negotiable?
Yes, they are! Real estate commissions are absolutely negotiable. We’re open to discussing commission structures that fit your specific circumstances. Whether you’re interested in full-service representation or prefer a more streamlined, cost-effective approach, we’re here to provide flexible options without compromising on quality.
What About Buyer’s Commissions?
For buyers, commissions are usually covered by the seller, so there’s typically no direct cost to the buyer when working with a buyer’s agent. However, it’s always good practice to discuss the commission terms with your agent upfront, especially if unique circumstances could affect the compensation structure.
Key Takeaways on Real Estate Commissions
Real estate commissions are typically paid by the seller and are negotiable.
They are shared between the listing and buyer’s agents.
The services included in your commission can vary widely—always know what you’re getting.
Carefully review the commission terms in your listing agreement before signing.
At JFRE, we aim to offer maximum value through customized service packages that cater to your needs.
Have Questions About Commissions? Let’s Talk!
Navigating real estate commissions can be confusing, but you don’t have to do it alone. We're here to guide you every step of the way, ensuring you understand your options and choose the path that best aligns with your goals. Whether you’re selling a luxury home in Rosedale or a cozy condo in Liberty Village, our team is ready to help you achieve the best possible results.
For more insights, check out our blog on The Advantages of Working with a Real Estate Team. Ready to get started? Contact us today – we’re here to make your selling experience as smooth and successful as possible!
