Encyclopedia
Commission
The fee paid to brokerages in a sale or lease. It's set by agreement, not by law, and BC rules require it to be disclosed in writing.
For example: A landlord's listing agreement says how commission is paid if a tenant brings their own agent. (Illustration only, not a real deal.)
Official source: Real Estate Services Rules (BC Laws)
Why it matters to you
Who pays it, and how much, shapes how the deal is put together. Ask how your agent is paid, so you understand any incentives on both sides.
How to use it in your deal
Owners should read the listing agreement for how commission is calculated, when it's earned, and whether it's owed if you deal directly with a buyer or tenant the brokerage introduced, even after the listing ends. Lease commissions are often based on the total rent over the term, and may include renewals or expansions.
Buyers and tenants should know who pays their licensee, and whether the payment depends on choosing a particular property. Licensees must disclose any remuneration that might affect their advice. Negotiate commission terms at the start, including holdover periods. Commissions are paid only to brokerages, not individual licensees directly.
If you're selling, ask for a marketing plan along with the fee, so you know what the commission buys. Read the definition of a completed sale or lease, since some agreements make the fee payable when an offer is accepted, not when the deal closes. Goods and Services Tax (GST) applies to commissions, so budget for it.
Mistakes I see
Not reading holdover clauses. Assuming a standard rate. Not asking who pays.
In BC and Vancouver
The Real Estate Services Act and BC Financial Services Authority (BCFSA) rules govern remuneration and disclosure.
Official sources: Real Estate Services Act (BC Laws) · Real Estate Services Rules (BC Laws) · BC Financial Services Authority
Questions to ask before you sign
- How is commission calculated?
- When is it earned?
- Who pays whom?
- Is there a holdover period?
Keep reading
Related terms: Listing agreement, Agency, Tenant rep
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.