The commission should never appear on the contract. An addendum is a modification to the contract so it should never be on an addendum either.

The agreement for the Sellers Broker to share a percentage of the commission with the Buyers agent comes from the MLS – not the Purchase Contract. Therefore stating, clarifying, correcting, changing this, etc., via the contract/addenda is improper.

How the Buyer or Sellers agent chooses to accept or redirect their commission is actually not the agent’s choice (or the Buyers or Sellers for that matter). At the end of the day it is the Broker’s choice. Thus, the Broker (not the Buyer or Seller) must sign any commission reduction and provide those instructions directly to the Escrow company.

So it would be incorrect for the Buyer and/or Seller to sign and agree to any Contract/Addendum referencing commission. Since neither have any control over or say in what the Broker(s) agree to (or don’t agree to). If a lender needs documentation that the Buyer is being provided a credit from the Buyer’s Agent, this should come via a Broker signed Commission Reduction from the Buyer’s Broker. A Buyer and Seller signed commission reduction is not valid.