Closing fees/costs are an inevitable part of real estate when buying or selling a home.  Understanding the costs involved is essential, and possibly detrimental if you don't know what they are.  One common question is whether realtor fees are included in closing costs. These fees, also called commissions, along with other expenses, play a crucial role in real estate transactions. Here, we’ll explore the topic in detail to help you navigate the process confidently.

Realtor fees are commissions paid to real estate agents for their services in helping you buy or sell a property. Recently, there has been a major shake up after a monumental legal settlement in the real estate industry regarding commissions so I wanted to go into details of the responsibility of who pays who when it comes to closing costs.  Realtor fees typically cover:

In Canada, realtor commissions average around 5% (plus applicable taxes) of the sale price, which is usually split between the buyer’s and seller’s agents. However, these fees can vary based on location, brokerage policies, and negotiations.  For example, if you sell your home for $765,000, the sellers would pay $38,250 + HST/GST(in Canada) and of which, half of that goes to co-operating/buyers brokerage.  The selling realtor you hire in this example would be paid $19,125, they then have to pay brokerage fees/splits, income tax, their expenses to market the home and whatever is left over is their "paycheck."

In most cases, realtor fees are NOT included in closing costs. Here’s why:​

Closing costs are additional fees and expenses paid at the end of a real estate transaction. These can include:

Closing costs typically range from 1% to 4% of the home’s sales price.  Typically, the only fee paid by the sellers outside of the realtor fees are legal expenses.  The buyer on the other hand, has much more to pay at closing.  For example, if you are buying a home for $765,000, you can expect to pay over and above the $765,000 price tag to buy the home, approximately $7,650-$30,600 depending on the city you live in and the other items described above.  If you want a quick calculator to work out the amount for your city, just click here for a calculator.​

Many realtors recommend staging and professional photography to make a home more appealing. These services are additional expenses, starting at $2,000 per month, and can go as high as $50,000/month depending on the size of the property.  For most average sized homes, and typical stager will cost approx. $9,500 for staging and $150-$1500 per photography session, and if you want to really stand out from the other homes, you will need video marketing, which starts at $500 and can go as high as $3500 depending on the length and production costs of the videos, or and don't forget about the print marketing, that will run you another $800-$1,000.  We believe at Young Realty  Inc. that our fees should include all marketing expenses, we are contrarian to most brokerages and if you want top notch all inclusive services, just contact us here.​

If you’re purchasing a new construction, or pre-built home or condo, you may encounter unique closing costs, such as HST/GST, development levies, city levies and occupancy fees, on top of your usual carrying costs of maintenance and taxes. Be sure to budget for these extra expenses as most would be new construction home buyers forget about the builder fees and end up having to scramble on closing day just to pay for the "hidden fees."​

Closing costs generally include land transfer taxes, legal fees, property tax adjustments, and administrative expenses like title insurance. These costs are paid at the end of the transaction and are separate from realtor fees.​

Yes, realtor fees can be negotiable.  A real estate professional will work with their clients within their sales budget and make sure they do a net income assessment of what the client will net from the sales proceeds.  That is something that all of our realtors at Young Realty Inc. do with all of our clients.   Some agents offer competitive rates, while others are open to discussions about lowering their commission.  In fact, there are dedicated brokerage houses that offer flat fee commissions, but keep in mind, you get what you pay for in real estate, so be careful, there are some scams out there targeting home owners trying to save money on fees.   Always clarify fees before signing a listing agreement.​

In Ontario, the seller typically pays the realtor fees for both the buyers agent and the sellers agent, which are deducted from the sale proceeds at closing from the sellers lawyer, or the listing brokerage.

While buyers cannot avoid closing costs entirely, they may negotiate for the seller to cover a portion of these costs as part of the purchase agreement.  In some cases, sellers provide financing (called Vendor Take Back Financing) and other closing costs to purchasers to incentivize the sale.  This is more typical in slower markets. ​

The quick answer is yes, just click here.  The long answer is, at Young Realty Inc., we offer comprehensive real estate services, including professional marketing, staging, and negotiation expertise to help you get the best value for your property.  Our ultimate goal is the generate our sellers the highest price possible for their homes at the time of the sale and to buy at the lowest possible price for our purchasers.  No matter what side of the coin we are on, we are always working in our clients best interest.

Yes, Young Realty Inc. prides itself on offering competitive rates and exceptional service. We’re transparent about fees and work with you to meet your needs.  I can honestly say, no one charges a lower amount of commission for the amount of services provided to our clients

While realtor fees are separate from closing costs, our team can guide you through understanding and negotiating all aspects of your real estate transaction, ensuring a smooth and stress-free experience.​

Realtor fees and closing costs are essential parts of any real estate transaction, but they serve different purposes. Realtor fees compensate agents for their expertise, while closing costs cover the administrative and legal expenses of transferring property ownership.

​By understanding these costs and working with knowledgeable professionals like Young Realty Inc., you can navigate the home-buying or selling process with confidence. Ready to get started? Contact us today to discuss your real estate goals!