Do We Need An Addendum To Secure Our Commission?

Hi Michael,

Unless the bonus had any stipulations indicated through MLS (must be full price, must close by......), I don't see why you would not be properly compensated as agreed.  The agreement is formed the MINUTE you show the house.  On the flip side, if the compensation is particularly low through MLS, you don't get to renegotiate AFTER you have shown the house, only before.  They don't get to lower the commission after you show their listing! 

The MLS is essentially the largest trade organization in the world.  We (as Realtors) MUST rely on the compensations offered, or our organization lacks the very basis on which is was developed!  Creating a separate addendum to address commission should not be necessary and actually could put your in a more vulnerable position than you expect.   

Have your principal broker send in your commission demand to the escrow office.  It would be the listing broker that is responsible for the bonus as offered through MLS. It may come from the pocket of the Listing Broker.  

They would have had to forward an addendum requesting to reduce your commission to change it.  They could have included it in the body of the sales contract, or addressed it separately with your broker. 

Your writing in your total commission in the original contract is helpful to prove your understanding of their offered compensation, but it doesn't unilaterally make the amount correct, without the support of the MLS detail, but it sounds like your documentation supports your understanding. 

I like to print out the MLS agent detail and attach it as part of the contract.  I do this for a few reasons, so that any changes since my contract went into effect are not relevant to our transaction an so that I have a record of the MLS the day I submitted the offer. 

I am curious to know how you were informed the Seller doesn't want to pay your $2000.00 bonus?

They had an opportune time to address the commission when you asked for a credit for the AC unit.  I presume they did not.  The listing agent may have assumed you would reduce your commission to make the transaction work.  This assumption could cost them. 

It puts you in a tricky situation.  If you dispute the commission, they will hold up the closing to resolve.  This could have a negative impact on the Buyer you represent.

I have made mistakes on the listing side of a transaction in assuming that commission would be based on net sales price.  I have simply absorbed the loss on my side because I think it speaks loudly of your business practice when you don't honor the commission you offer through MLS. 

I will be interested to know how this turns out for you.

Have your broker contact the listing agent and discuss the situation so you can get it resolved without having to incur legal fees.  If that doesn't work, you may have to go to arbitration after closing. I would think that the commission is coming from the other broker, who promised that bonus through the MLS and that the listing broker would be responsible for paying. If the seller decided they don't want to pay it, that should be the other brokers problem, not yours. If the bonus was part of the listing agreement, the title company should have a copy and generate the commission on the HUD based on the info there, basically holding the sellers to make good on their commitment. Good luck.

Will be interested in coming back and reading more about how this plays out for you.