3 Reasons to Get Representation Agreements in Writing
08/15/2013 | Author: TAR Editorial Staff
If I am going to act as a buyer’s agent, do I have to have a written buyer’s representation agreement?
Even though a broker and a client can have a relationship without written documentation, there are multiple reasons why a broker-client relationship should be in writing:
- Section 1101.806(c) of the Real Estate License Act provides that a broker may not sue for the recovery of a commission unless there is a written agreement signed by the person agreeing to pay that commission. In other words, unless you have a written agreement signed by a seller or buyer agreeing to pay your commission, you cannot enforce your right to collect your commission from that person.
- If a broker’s practice or office policy permits the broker to act as an intermediary (i.e., the broker has a broker-client relationship with both the seller and the buyer in the same transaction), then Sec. 1101.559 of the Real Estate License Act requires that the broker obtain the written consent of each party and that written consent must also state who will pay the broker. The Texas Association of REALTORS® buyer-representation agreements and listing agreements have provisions which include the necessary written consents and other statutory requirements for a broker to act as an intermediary.
- It is just good business to put the rights and obligations of the broker and his client in writing to ensure all parties mutually agree on the essential terms of those rights and obligations. Furthermore, Article 9 of the Code of Ethics requires that REALTORS® shall assure whenever possible that agreements shall be in writing for the protection of all parties.