The role of a real estate broker is not limited to searching for a property or posting a listing online. It involves a professional who supports, advises, and negotiates throughout a real estate transaction, both for the purchase and the sale of a home. This support, however, comes at a cost. Real estate brokers are compensated through a commission generally calculated as a percentage of the selling price.
Even today, this method of compensation raises several legitimate questions: what is the usual commission rate in Quebec? Who is responsible for paying it? Is it possible to negotiate it? And what factors can cause the amount to vary?
This article reviews real estate broker commissions in Quebec by presenting commonly practised percentages, differences depending on the type of transaction, and key elements to consider before committing.
In brief
- A real estate broker’s commission in Quebec generally ranges between 4% and 7% of the sale price, with the most common rate being around 5%.
- The commission is usually paid by the seller and then shared between brokers when the buyer is also represented.
- Taxes (GST and QST) are added to the commission amount and must be included in calculating the total cost of the transaction.
- The commission does not correspond directly to the broker’s income, as it also covers costs related to marketing and practising the profession.
- The commission rate can be negotiated, but it varies depending on the type of transaction, the services offered, and market conditions.
The real estate broker: much more than just a cost
The commission amount can sometimes seem high. To reduce expenses, some people choose to sell their property without a broker. However, focusing solely on the savings achieved can be misleading, since a real estate broker’s role goes beyond the commission paid.
In Quebec, working with a real estate broker allows you to benefit from:
- Strong knowledge of the real estate market;
- Guidance aimed at positioning the property at the right price;
- Legal oversight throughout the transaction.
These services represent a cost, but they can also help prevent mistakes and facilitate the selling process.
What is the usual commission rate for a real estate broker in Quebec?
In Quebec, a real estate broker’s average commission generally ranges between 4% and 7% of a property’s sale price. In practice, because of competition among brokers and agencies, the rate most often observed is around 5%.
The exact percentage depends on several factors, including the value of the property, the local market, and the services included in the brokerage mandate. The table below illustrates the concrete impact of different commission structure.
| Property value | 4 % | 5 % | 6% |
| |
| $200 000 | $8,000 | $10,000 | $12,000 | $14,000 | |
| $400,000 | $16,000 | $20,000 | $24,000 | $28,000 | |
| $800,000 | $32,000 | $40,000 | $48,000 | $56,000 |
It is also important to take into account applicable taxes (GST and QST) on the commission amount. These taxes are added to the broker’s compensation and must be included in calculating the total cost related to selling the property.
Who pays the real estate broker’s commission?
In a real estate transaction, the broker’s commission is paid by the seller. When the buyer is also represented by a broker, the commission paid by the seller is usually shared between the two professionals, according to the terms set out in the brokerage contract.
Variation of commission by type of transaction
The commission rate can vary depending on the type of property and the nature of the transaction. In the case of luxury real estate, the commission generally ranges between 5% and 7%. This percentage may be higher than that charged for a standard residential property, particularly due to market specifics and the more personalized services offered. As with any transaction, the rate may nonetheless vary from one broker to another.
For a commercial real estate transaction, such as an income property or a commercial space, the logic remains similar. The commission requested is generally comparable to that of the residential sector, namely between 4% and 7%, and it can also be negotiated before signing the brokerage contract.
What expenses are paid by the real estate broker?
On a transaction worth several hundred thousand dollars, a 5% commission may seem high. However, it is important to understand that this amount does not correspond directly to the broker’s income.
The commission also helps cover various expenses related to marketing the property and practising the profession, including:
- Advertising;
- Photography and virtual tours;
- Professional insurance;
- Employees;
- Office rental costs;
- Contributions to the real estate brokerage, etc.
How to negotiate a real estate broker’s commission?
In general, the commission rate requested by a real estate broker can be negotiated. That said, it is preferable to approach this discussion with openness to establish a healthy working relationship.
Before negotiating, it is useful to consider all the costs assumed by the broker as well as the work required to sell the property. If some flexibility seems possible, a proposal can be made, provided it remains realistic and flexible.
Comparing offers from several brokers can also help better assess the services offered and the rates requested. This approach makes it possible to make an informed choice, taking into account both the cost and the level of support provided.
What is the average real estate agent salary?
A real estate broker’s salary can vary considerably from one person to another. Since this professional is paid on commission, their income depends in particular on their experience, the volume and value of transactions completed, and the market they serve.
According to data from the Government of Canada Job Bank, the compensation of real estate brokers in Quebec generally falls within the following ranges, based on full-time work:
Compensation levelEstimated hourly wageApproximate annual incomeLow end$37.63/hour$78,250/yearMedian salary$59.86/hour$124,509/yearHigh end$96.90/hour$205,712/year
FAQ — Real estate broker commission
Is the commission payable even if the house is not sold?
As a general rule, the real estate broker’s commission is payable only when the transaction is completed. If the real estate agent does not sell your home during the term of the brokerage contract, no commission is usually required.
Can a fixed amount be paid instead of a percentage?
In some cases, it is possible to agree on a fixed fee rather than a percentage of the sale price. However, this option is less common and depends on the services offered, the type of property, and the agreement reached with the broker. The compensation formula must always be clearly specified in the brokerage contract.
Is the commission the same everywhere in Quebec?
No. Real estate commissions can vary by region, type of market, property value, and services included in the mandate. There are no fixed rates imposed by the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ), which explains the differences observed from one broker to another.
Is the commission negotiable?
Yes, real estate commission rates are generally negotiable. However, it is recommended to evaluate all the services offered rather than focusing solely on the percentage. A lower commission may sometimes come with limited services.
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