What Does the Acronym BAC Stand For in Real Estate?
BAC in Canadian real estate stands for Buyer Agency Compensation — the portion of total commission that a listing brokerage offers to the cooperating brokerage representing the buyer. When a seller signs a listing agreement, they negotiate a total commission (commonly 4–5% in the GTA) and decide how that’s split between the listing side and the buyer’s side. The buyer-side share is the BAC. It’s disclosed in the MLS® listing data, in offer documents, and in the listing brokerage’s commission schedule. BAC is a Canadian term; the U.S. equivalent (“buyer-side commission”) has been the subject of major legal change in 2024–2026, and parallel TRESA-driven changes in Ontario have made BAC more transparent than ever before.
How BAC is set
When a seller lists a property, they negotiate two things with their listing brokerage: total commission, and how it splits. A common GTA structure is 4% total — typically 1.5% to the listing brokerage and 2.5% to the cooperating (buyer’s) brokerage — but every line is negotiable. Higher-end listings may carry lower percentage commissions; condos and lower-priced freeholds often run higher to compensate for lower dollar amounts. The BAC is what attracts buyer agents to show the property.
Where BAC is disclosed
- MLS® data fields — the cooperating commission is a standard data point.
- Listing agreement (sellers) — explicit total commission and split.
- Buyer representation agreement (BRA) — buyers and their brokerage agree what BAC the buyer will receive credit for; if BAC is below that, the buyer is responsible for the shortfall.
- Offer/APS — commission acknowledgement clauses.
BAC under TRESA (Ontario)
Under the Trust in Real Estate Services Act and its 2023–2024 reforms, Ontario buyers must sign a written representation agreement with their brokerage that specifies the buyer’s commission — typically the percentage they expect from any cooperating brokerage offer. If a listing’s BAC is below what the buyer’s BRA stipulates, the buyer is on the hook for the difference unless renegotiated. This makes pre-offer review of the listing’s BAC essential for buyers.
Negotiating BAC
- Sellers: too low a BAC can dampen showings; market norm is your starting point.
- Buyers: a low-BAC listing may mean an out-of-pocket top-up; clarify with your agent before viewing.
- Buyer agents: the BRA is now the formal place to set buyer-side compensation, separate from what the listing offers.
Frequently Asked Questions
- Does the seller pay BAC, or the buyer?
- Historically the seller funds total commission (including BAC) out of sale proceeds. After TRESA, the buyer’s BRA may obligate the buyer for any shortfall between BRA-stipulated commission and listing-offered BAC. Always read the BRA.
- Is BAC negotiable on every deal?
- The seller-side BAC is negotiated when the listing agreement is signed. It can sometimes be amended later but rarely on a deal-by-deal basis from the buyer side without a separate written agreement.
- Can a brokerage offer 0% BAC?
- Yes — some discount and FSBO-style models offer no cooperating commission. Buyers viewing those listings should expect to fund their own buyer-side commission per their BRA.
Related Reading
Primary sources for jurisdictional facts:
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