Houses for sale in Toronto in December, 2025.Sammy Kogan/The Globe and Mail
Should your landscaper get paid more because the price of your property went up? Of course not – and neither should your realtor. Changes to industry practices would result in greater competition, resulting in lower realtor fees and better home affordability.
In 2015, the average Toronto home sale resulted a commission of $31,176, split between the seller’s and buyer’s realtors. In 2025, the average sale gave the realtors $53,392 – a 71 per cent rise, far exceeding inflation.
The fact that realtor commissions are usually based on a percentage of the home sale price is a fundamental inequity baked into the real estate market that has contributed to affordability problems. While realtor commissions have dropped slightly in the last four years along with national home prices, they are substantially higher than a decade ago. The duties of a real estate agent, meanwhile, remain essentially the same.
The current slow real estate market should be giving home buyers an opportunity to negotiate lower fees with their realtors. There are a few signs that this is happening, with some “cash-back realtors,” who return a portion of their commissions to the buyer, reporting a rise in business.
But most people continue to use full-fee realtors rather than turning to discounted services or selling their homes without an agent. The traditional fee structure has largely stayed in place, in part due to anti-competitive practices that keep fees high.
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It’s true that realtor fees aren’t fixed, and the Canadian Real Estate Association (CREA), which represents realtors, says its policies are “pro-competitive and pro-consumer.” (And realtors will point out that their take home pay is substantially less than the commissions they receive, as they have to pay their brokerage, as well as fees for licensing, insurance, and other expenses.) However, it’s no coincidence that the vast majority of sales follow the customary fee structures, which vary by province.
One reason is that rules from CREA require the seller’s realtor to offer a commission to the buyer’s realtor for homes on the MLS system, the database where most properties are listed. Because the buyer doesn’t pay their realtor directly, they have less incentive and ability to push for lower fees. However, the high fees are effectively built into the price they pay for the home.
Sellers’ realtors generally don’t want to offer lower commissions to buyers’ realtors, as that can slow down a deal. Research shows that homes with lower buyers’ agent commissions take longer to sell – and are less likely to sell at all.
The practice of having the seller’s agent pay the buyer’s agent is currently being looked at by the Competition Bureau, and it’s also the subject of a class-action lawsuit. The Competition Bureau says that as of now, there is no conclusion of wrongdoing from CREA and local real estate boards, but if there is evidence of legal concerns, it could make an application to the Competition Tribunal to prohibit the conduct or seek remedies.
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Buyers would have more ability to negotiate if they paid their realtors directly. Local real estate boards, provincial governments and regulators should work together to make the commission structure more transparent and give more control to buyers. Consumer-friendly practices could make it easier for flat-fee realtors to expand, which would increase affordability.
Other industry practices also need further scrutiny. The Competition Bureau is also looking at a CREA policy that requires that residential real estate listings be placed on an MLS system within three days of public marketing unless an exemption applies. The bureau’s investigation is looking at if this practice gives large brokerages an advantage, as they can access more listings within their firm before smaller competitors.
Real estate agents bring important expertise to what are often the most important financial transactions in people’s lives. It’s likely that given more pricing options, many will still opt for traditional realtor services with high fees.
However, a broader rethink of commissions is overdue. Lower fee models and flat-fee services, which don’t rise and fall as home prices shift, deserve a fair shot at gaining consumer support. These changes would be another step in boosting affordability and helping young buyers get into the market.