The usual arrangement
Conventionally in Calgary, the seller agrees compensation with their listing brokerage, and a portion of that is offered to the brokerage representing the buyer. The money comes out of the sale proceeds at closing, which is why buyers often describe the service as "free".
It is more accurate to say it is paid indirectly. It comes from the transaction, which is funded by the price you pay.
Does using a buyer's REALTOR® cost you more?
Generally no, and this is where buyers most often reason themselves into a bad position.
On a typical resale, the seller has already agreed their brokerage's compensation before you appear. If you arrive unrepresented, that agreement does not usually shrink — the listing side simply retains more of it. You have not saved money; you have declined representation at the same price.
The same logic applies on new construction, where the builder ordinarily pays a buyer's agent from the sale and does not discount the home for turning up alone. The builder registration rule →
The choice is rarely "pay for an agent or save money". It is "have someone on your side, or not, at a similar price".
What your agreement should spell out
In Alberta you will sign a written service agreement with a brokerage, and it should be clear about compensation — including the scenario that trips people up: what happens if the compensation offered on a particular property is less than agreed, or none is offered at all.
That situation does occur, and the agreement determines whether any shortfall falls to you. Ask specifically:
- What is the agreed compensation, and who is expected to pay it?
- What happens if a listing offers less than that, or nothing?
- Is any shortfall payable by me, and can it be negotiated into the offer?
- How long does the agreement run, and which properties does it cover?
A good agent will answer all four without hesitation and put it in writing. Vagueness here is itself informative.
One Alberta point worth knowing
Representation here works through designated agency: the individual REALTOR® you hire represents you, not the brokerage as a whole. That matters when two agents from the same brokerage are on opposite sides of a deal — each represents their own client, with the brokerage managing the arrangement.
It is a different model from the one you may have read about in American coverage, so be careful applying US commentary to an Alberta transaction.
Still deciding who to work with? Start with choosing the right agent.
Commission is negotiable, and set by agreement
There is no fixed, standard or legally set commission rate in Alberta. Fees are agreed between you and a brokerage, and structures vary — percentages, flat fees and combinations. RECA has required a written service agreement for residential buyers since July 1, 2014, and that agreement is where your brokerage’s compensation, and what happens if a seller does not cover it, should be spelled out. Ask what is included for the fee, not just what the fee is.
When a buyer might pay directly
On most resale purchases through the MLS® System the buyer does not write a cheque to their REALTOR®. The exceptions tend to come up when a property is sold privately, or a seller offers less than your agreement provides for. Then the options are to ask the seller to cover the gap as a term of the offer, pay the difference yourself, or pass on the property. Knowing which your agreement says before you find the house avoids the conversation happening under pressure.
Keep this separate from closing costs. Legal fees, Land Titles registration and an inspection are yours to pay regardless of how compensation is handled. Calgary closing costs.