I often get asked questions about commission, how it is allocated ? What does it pay for?  I can honestly say that the majority of the general public have no idea.  They are also not aware that we agents are independent contractors, and as such are responsible for our own expenses. 

It is a general misconception that these expense are paid by the brokerage.  NOT !!  Our expenses come directly out of the portion of commision we earn after the brokerage takes their portion and what remains becomes our net earnings.   Not as much as most people believe.

Here s a description and summary of how it all works.

  • Real Estate professionals are independent business people who must pay fees to their broker, to their boards, and must cover ALL of their business expenses before they acquire net earnings 
  • Most professionals receive an hourly fee for services as the work is done, but real estate agents are paid ONLY when have successfully completed a transaction.  All work leading up to that point, which might include consulting, fee appraisal evaluations, listing, marketing, showing properties, advertising, prospecting, etc. remains unpaid, until two parties are successfully brought together in a real estate transaction.

 How Is It Allocated?

 The commission paid to the Listing Broker upon completion of the sale is allocated as follows:

  • 50% is paid to the selling broker, of which the salesperson gets a portion, dependent on what level of “ split” they are on at a given time.  Each agent is under contract and the split varies with the amount of commission earned
  • 50% is paid to the listing broker, (or the amount offered on the listing) from which the salesperson who represented the Seller get his portion.  The amount will be dependent on what “split” they are currently on with their respective broker.  Again, this amount varies with the amount of commission earned.

 What Does Commission Pay For?

 1.    Licence Fees     The Ontario Real Estate Association decrees that a realtor mustbe licenced to sell real estate under their  jurisdiction and by-laws.

 2.    Board Fees       Toronto Real Estate Board, andMississauga Real Estate Board.

 3.    Broker Fees       We are under contract to our broker for holding our licence and being the broker under whom I can trade in real estate.

 4.   Advertising        All advertising, which includes newspapers, flyers, newsletters, mail-outs, web sites, feature sheets, personalized booklets, etc. are all expenses the  real estate agent is responsible for.

 5.    Office Fees        A fee is paid to the broker to whom we under contract for use of such items as:  office space, computer equipment, software, fax machines,  photocopiers, phones, pagers, stationery, secretarial services, listing sign, open house signs, business cards, and automobile.

 6.    Courses              Agents are responsible for all educational courses and real estate seminars.  It is mandated by RECO that agents must acquire a certain number of credits each 24 months to enable renewal of their licence.  Normally each course provide 3 credits.  One mandatory course is the RECO update which is a one day course providing 6 credits.  These courses are not free, and not paid for by the brokerage…  realtors must pay for these our of their own pocke

 7.    Insurance:        Because we are independent business professionals, we are responsible for our own medical/dental insurance and personal liability insurance.


One very important thing to keep in mind, is you always get what you pay for. I have found that to be the case in my own life… for whatever product you are buying or what service you are paying for. 

Buying or selling a home is one of the most important financial transactions you will make.  Leave it in the capabale hands of an experienced professional.  One word out of place or the insertion of another word strategically placed in one of the clauses or conditions in your offer, could change the entire meaning resulting in disastrous results for you. 

If you don’t have an agent, ask a friend and family member to refer one to you that they may know or who have had a great experience working with.  You can also call a few agents an interview them.  Choose the one you feel most comfortable with and who you trust will do the best job for you.


I live and work in STREETSVILLE and have a vested interest in property values here. Are you considering buying or selling or know anyone who is? Give me a call for a complimentary evaluation of your home in this changing market. (416) 717-6331

www.gloriavalvasori.com                          gvalvasori@rogers.com

Your STREETSVILLE Real Estate Agent

Experience, Service and Integrity in Every Real Estate Transaction

Gloria Valvasori, Sales Representative

BETTER HOMES and Gardens Real Estate Signature Service

5636 Glen Erin Parkway, Unit 10 (Longo’s Plaza)

Misssissauga, Ontario

Office: (905) 363-4622 Direct: (416) 717-6331