Working with a Realtor

Buying a home is one of the largest financial decisions you will ever make, and having the right professional by your side can save you tens of thousands of dollars and countless hours of stress. But not all realtors are the same, and understanding how the industry works in Canada will help you make smarter choices from day one.

Buyer vs. Seller Representation

In Canada, the real estate industry distinguishes between buyer’s agents and seller’s agents (also called listing agents). A listing agent works for the seller — their job is to get the highest price possible. A buyer’s agent works for you — their job is to help you find the right property and negotiate the best deal.

Until recently, this distinction was sometimes blurry. In many transactions, the same brokerage (or even the same agent) represented both sides. That practice, known as dual agency or multiple representation, has come under increasing scrutiny and regulatory change across Canada.

When a single agent represents both the buyer and the seller, they have a conflict of interest. They cannot fully advocate for the best price on your behalf while simultaneously trying to maximize the seller’s return. This is why multiple provinces have moved to restrict or ban the practice altogether.

Buyer Agency Agreements and the 2024 TRESA Changes

In Ontario, the Trust in Real Estate Services Act (TRESA), which came into full effect in December 2023, introduced significant changes to how buyer-agent relationships work. Under the new rules, realtors must establish a written representation agreement with you before providing certain services, including showing you properties or preparing offers.

A buyer representation agreement (BRA) is a contract between you and your agent that outlines:

Duration — Typically 90 days to 6 months, though you can negotiate shorter terms
Geographic scope — The areas and property types covered by the agreement
Commission structure — How much the buyer’s agent expects to earn and how they will be paid
Services provided — What your agent will do for you, including property searches, showings, negotiations, and offer preparation
Termination terms — Under what circumstances you or the agent can end the relationship

Under TRESA, agents must also provide you with written information about the different types of representation available before you sign anything. This includes an explanation of buyer representation, seller representation, and self-representation (where no agent represents you).

How Realtors Get Paid — Commission Structure Changes

Traditionally in Canada, the seller paid the total real estate commission — typically 4% to 5% of the sale price — which was then split between the listing agent’s brokerage and the buyer’s agent’s brokerage. On a $600,000 home at 5%, that is $30,000 in total commission, often split $15,000 to each side (before the brokerage takes its share from each agent).

This model meant that as a buyer, you did not pay your agent directly out of pocket. The commission came from the sale proceeds.

That model is evolving. Following regulatory changes in Canada and landmark legal settlements in the United States that have influenced industry norms globally, buyers are now increasingly asked to discuss and agree to their agent’s compensation upfront. Key changes include:

Transparency requirements — Agents must clearly disclose how much they expect to earn and from whom
Negotiable commissions — Buyer’s agent commissions are not fixed and can be negotiated
Seller may not always offer buyer-side commission — In some cases, the seller may offer a reduced or zero commission to the buyer’s agent, meaning you may need to pay your agent directly or negotiate that into the purchase price

In practice, buyer’s agent commissions in Canada typically range from 2% to 2.5% of the purchase price. On a $500,000 home, that works out to $10,000 to $12,500. Understanding this before you start house hunting helps you budget accurately and avoid surprises. Getting pre-approved for a mortgage before engaging an agent ensures you know exactly what you can afford.

Do You Need a Realtor?

Technically, no. You can buy a home without agent representation. Some buyers choose to work directly with the listing agent (though this creates the dual agency problem discussed above), use discount brokerages, or purchase private sale properties (sometimes called “For Sale By Owner” or FSBO).

However, for most first-time buyers, having a dedicated buyer’s agent is strongly recommended because:

They have access to the MLS system and real-time listing data you cannot get on your own
They understand local market conditions and can advise on fair pricing
They handle the complex paperwork, timelines, and legal requirements — including drafting the purchase agreement
They negotiate on your behalf — a skilled negotiator can save you far more than their commission costs
They can identify structural and neighbourhood problems you might miss
They coordinate with your mortgage broker, home inspector, and lawyer
Their guidance can prevent expensive mistakes that first-time buyers commonly make

If you are buying in a competitive market like Toronto or Vancouver, where bidding wars are common and properties move within days, having an experienced agent is practically essential.

Questions to Ask Before Hiring a Realtor

Before signing a buyer representation agreement, interview at least two or three agents. This is a significant professional relationship, and you want someone who is a good fit for your needs, communication style, and market area.

Here are questions worth asking:

How many first-time buyers have you worked with in the past year? Look for agents with specific experience helping buyers in your situation.
What neighbourhoods do you specialize in? An agent who knows the area well can spot overpriced listings and flag upcoming developments.
How will you communicate with me — text, email, phone calls? Make sure your communication preferences align. In fast-moving markets, slow responses can cost you a home.
Can you explain your commission structure clearly? You should understand exactly what you are agreeing to pay and when.
What happens if I am not satisfied with your service — can I terminate the agreement? A good agent will have a reasonable exit clause.
Will you personally attend showings, or will an assistant or team member? Some high-volume agents delegate showings. Know who will actually be working with you.
How do you handle multiple-offer situations? Ask for specific examples of strategies they have used to help buyers win in competitive scenarios.
Can you recommend trusted mortgage brokers, home inspectors, and lawyers? A well-connected agent can streamline your entire buying process.
How long have you been licensed, and with which brokerage? Experience matters, but so does the reputation and support of their brokerage.
Can you provide references from recent buyers? Speaking with past clients gives you real insight into what working with this agent is like.

A strong relationship with a qualified buyer’s agent sets the foundation for a smoother, less stressful home buying experience. Take the time to choose wisely.

Next: How to Read MLS Listings

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