What is the co-operating brokerage commission and can I reduce it after listing?

The co-operating brokerage commission (sometimes called the co-op fee) is the portion of the total commission that the listing brokerage offers to the brokerage representing the buyer. In Ontario, when a property is listed on MLS, the co-op fee is disclosed to buyer's agents who review the listing.

Once you have signed a listing agreement specifying a co-op commission and the listing is live on MLS, reducing that amount mid-listing can be complicated. Changing the listed co-op fee requires amending the listing agreement and updating the MLS listing — the brokerage will need to agree to the change and the amended amount becomes visible to buyer's agents. A significant reduction mid-listing can deter buyer's agents who had already planned to show the property to their clients based on the original fee.

If you want flexibility in co-operating compensation, negotiate that into the listing agreement at the outset — before signing. Some listing agreements structure the co-op as a fixed dollar amount rather than a percentage, which gives slightly more certainty. Your real estate lawyer can advise you on what terms are achievable and what impact they might have on your sale.