How Does a REALTOR Actually Get Paid, and Who Pays It?
Real estate commission is one of the biggest costs in a home sale, and one of the least transparent. Here's exactly how it works in BC, who's actually paying, and where the negotiation room is.
“• In the vast majority of BC transactions, the seller pays commission for both their own agent and the buyer’s agent
• There’s no standard or fixed commission rate in BC. By law, it’s entirely negotiable
• A common structure is roughly 7% on the first $100,000 of the sale price and a lower percentage on the balance, but your actual rate is whatever you negotiate and dependent on the services provided
• GST applies on top of whatever commission is agreed to”
I'll be straightforward about this one, because I think it's a fair question and most of the explanations out there are more confusing than they need to be.
When you sell your home in BC, you typically pay commission for two REALTORS, not one: your own listing agent, and the agent who brings the buyer. This is part of how the MLS cooperative system works. Your listing agent agrees to share a portion of the commission with whichever agent brings a successful buyer, which is the incentive that gets your home shown to as many buyer agents as possible rather than just sitting there waiting for a direct inquiry. As a buyer, this usually means you don't pay your own agent directly. Your agent's portion comes out of what the seller has already agreed to pay, and they're required to disclose that amount to you in writing before you start working together. There are rare exceptions, mostly around private or off-MLS sales, where a seller chooses not to offer a buyer's agent commission, but your agent should flag that to you upfront if it applies.
Now, the rate itself. There is no standard commission in BC, and there never has been. Under federal competition law, no real estate professional or association is allowed to set or imply a fixed rate. What you'll commonly come across is a tiered structure, something like 7% on the first $100,000 of the sale price and a lower percentage, often somewhere in the 2.5% to 3.5% range, on the remainder. Because that higher rate only applies to a small slice at the bottom, the effective overall rate actually drops as a home's price goes up, which is part of why BC commissions tend to look lower in percentage terms than in some other provinces, even though the dollar amounts here are often larger given local prices. On top of whatever total is agreed to, GST applies.
Here's the thing that's actually negotiable and worth understanding, not just the headline number: the split between the listing side and the buyer's side. A 50/50 split is common, but listing agents set this, and it can shift. Offer too little to the buyer's side and some buyer's agents may simply be less motivated to show your home, all else being equal. So the conversation with your listing agent isn't only "what's your rate," it's "how is this structured, and does it actually serve getting my home in front of the most buyers."
When you accept an offer, you'll receive a Disclosure to Seller of Expected Remuneration form, which turns the percentage you agreed to into an actual dollar figure tied to that specific offer, so there's no ambiguity about what you're paying before you sign anything.
What This Means for You
I'd rather you ask me this question directly than wonder about it quietly, so consider this an invitation to do exactly that before we ever talk about listing your home. My take: the lowest commission isn't automatically the best deal, because what you're really buying is marketing reach, negotiation, and the buyer agent incentive structure that gets the right people through the door, not just a percentage. But you're entitled to understand exactly what you're paying for and why, and I'd rather walk through that with you upfront than have it feel like a surprise line item later.
If you're thinking about selling and want a plain, no pressure conversation about what commission structure makes sense for your situation, send me a message. I'll walk you through the actual numbers before you sign anything.
604.317.4464
Matt@RossettiRealty.ca
About Matt Council
Matt Council is a top-performing North Vancouver Realtor and West Van specialist with a background in finance. He moves beyond the sales hype to offer clients a data-driven, pressure-free approach to buying and selling real estate on the North Shore. Whether you are evaluating a presale in Lower Lonsdale or a detached home in Lynn Valley, Matt helps you understand the numbers behind the move.
Thinking of making a move? Let’s run the numbers.