Real Estate Commissions – What are you really paying for?

Many buyers and sellers are unsure what they are actually paying for with real estate commissions and we want to clear this up. 

We’ve put together this list to review the main costs, covered by each realtor, to explain what your funds are going towards.

Brokerage fees

The majority of brokerages charge a 50% fee on all commissions, meaning half of the real estate commissions paid to your realtor are actually paid to the brokerage. 

This covers office fees, managing broker fees, administrative costs, access to company logos, and minimal marketing and advertising, ie:newspaper classifieds. 

As each brokerage is different, so will be the fees and services included, but for the most part, you can expect that your agent is paying the brokerage 50% of the commissions they’ve earned.

Photos and videos

Professional photos, video tours, and drone videos are at the sole cost of the agent. This often also includes additional costs associated with staging your home, if required. 

A professional photographer will ensure your home shows its best and is marketed first-rate, appealing to as many buyers as possible.

MLS, Real Estate Board, Licensing, etc.

Realtors using the MLS system are required to pay an annual fee. MLS is the most well-known home searching website and your agent will need access to this to ensure a quick sale.

Realtors are also required to pay licensing and insurance fees, which are renewed every 2 years.

Additionally, agents need to pay annual dues to their local real estate board and are required to complete numerous educational courses, at their own cost, each year to ensure their license remains in good standing.


Any additional advertising by your agent will be at their costs. If your agent offers to advertise on their social media pages, they are likely paying a social media manager or using plenty of their free time to ensure your listing is shared as widely as possible.


While some brokerages offer signage, not all of them do. If your agent has personalized signage with their name and direct contact info this has come at their sole cost. 

A simple sign costs upwards of $150 and would not include any additional text, logos, or photos. Personalized signage with names, contact info, and photos can cost nearly $500 per sign. 

Additional costs

Many realtors will create flyers or brochures to hand out at open houses or around the neighbourhood. The time spent to create, print, and distribute these types of materials are all at the sole cost of your agent. 

While it may seem that agents are making extremely large commissions, they also have extremely high expenses, and we haven’t even touched on paying taxes, employment insurance, etc.

There are countless costs that your agent will need to pay on a per listing, monthly or annual basis that you may not be aware of. We suggest having a conversation with your agent regarding the costs in advance so that you’re aware of everything upfront.