Does a Buyer Pay REALTOR Commission?
Most agents tell their buyer clients that they don't need to worry about commission expenses, as the seller usually covers these. While in a sense this is accurate,
the money for the commission actually originates from the buyer's purchase funds in the real estate transaction.
More precisely, both the seller and buyer contribute to their agents' commissions through the purchase funds of the home, with the seller and listing agent proposing the commission
amount and its distribution.
In Ontario, the specifics of the buyer's commission obligations for their real estate purchase are outlined in the standard Buyer Representation Agreement (OREA Form 300), which
buyers commonly sign. This document includes a clause where the buyer consents to a specified commission amount for their agent if they’re successful in finding them a home.
In situations where the seller's co-operating commission is insufficient or if a transaction fails due to the buyer's fault, the buyer agrees to pay the shortfall or the entire commission.
However, in Ontario, it's unusual for agents to enforce this part of the agreement, typically not requiring buyers to pay any additional fees.