4 reasons why written representation agreements are a good idea

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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


Comments

David Davis on 09/12/2015

Have they opened this forum up to non (people who are not) Texas REALTORS®?  I am truly amazed at all the poor use of grammar and language skills here.  Someone please save us from the “one deal wonders!”

Carmen on 09/11/2015

And all bets are off if the client buys another agent in the offices listing and goes through that agent.

David Davis on 09/11/2015

@Frank Larios Not only off topic, but such a poor command of the English language, that I truly must wonder what you are even doing here.  Are you actually a Texas REALTOR®?

Frank Larios on 09/10/2015

In reference to Buyer’s representation agreement,  it has been abused by many agents, ones it is signed , some agents instruct   their clients to go house hunting on their own and call listing agents to show them the properties, ones they find a property then   to let their “agent” know , and then the agent comes back in to the picture to writte the offer.  When that happens I do not consider the prospect to have an agent.  The buyers’ agreement is a contract, with obligations from both sides, and the agents are the first ones to brake the contract by neglecting their duties towards their client.
Sorry , this issue is a little off the subject. But it is important.

Trudy Pape on 09/09/2015

Thanks David to your response as it is interesting. This is what I was informed and am glad to hear other points of view on this. Would love to hear more conversations on this.

David Davis on 09/09/2015

Doesn’t Article 9 of the Code of Ethics requires that REALTORS® (see above) say otherwise?

Is the difference the words “assure” and “must”

As for another contract, unless all the parties of the representation agreement are also named in the other contract, and have agreed that the representation agreement is subordinate to the “other contract”, NO the “other” contract does not “TRUMP” the representation contract.  A contract is a meeting of the minds, and is enforceable once that “meeting of the minds” has occurred, unless it is otherwise void.

David Davis on 09/09/2015

Wrong!

Trudy Pape on 09/09/2015

I understand if the broker has a contract with a relocation company that contract with the relocation company trumps any buyer representation agreement and can be broken without any payment to broker.


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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.

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