4 reasons why written representation agreements are a good idea

Translate this page
A hand with a pen signing a contract on a blue clipboard.

09/09/2015 | Author: Editorial Staff

Does the law require a broker to have a written representation agreement to act as someone’s agent?

No. A relationship between a broker and a client can legally exist without a written document. However, there are four good reasons why a broker-client relationship should be in writing, whether it’s with a buyer, seller, landlord, or tenant:

1. A broker cannot sue for a commission unless there is a written agreement signed by the party agreeing to pay that commission.

2. If office policy permits a broker to act as an intermediary (the broker has a broker-client relationship with both the seller and the buyer in the same transaction), then the broker must obtain the written consent of each party and it must state who will pay the broker. The Texas Association of REALTORS® buyer's representation agreements and listing agreements include the necessary written consents and other statutory requirements for a broker to act as an intermediary.

3. Written agreements between a broker and his client help ensure that all parties have mutually agreed on the terms of representation.

4. Article 9 of the Code of Ethics requires that REALTORS®, for the protection of all parties, assure whenever possible that all agreements related to real estate transactions are in writing.

Read more legal FAQs on texasrealestate.com

Categories: Forms, Legal
Tags: legal, legal faq, buyer's representation, representation agreement, listing agreement, contracts

advertise with us

Legal disclaimer

The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on texasrealestate.com. Any legal or other information found here, on texasrealestate.com, or at other sites to which we link, should be verified before it is relied upon.

Advice for REALTORS®

5 ways smart-home tech affects real estate transactions

5 apps that can keep you safe in—or before—a crisis

Is the eviction process different for manufactured homes?

3 places you can find free marketing content

Subscribe

More advice for REALTORS®