Texas REALTORS® 2018 Winter Meeting | Feb. 9-13 | Austin, Texas

The Right Way to Work 2 Sides of 1 Transaction

Translate this page
Two hands grasped above a signed contract and cash

07/11/2013 | Author: TAR Editorial Staff

If you’re a broker who represents two parties in one transaction, such as a buyer and a seller or a tenant and a landlord, you’re working as an intermediary. Being an intermediary can be a complicated process with legal ramifications if it’s done improperly.

Once you decide to act as intermediary, there are certain things you cannot do. A broker and any sponsored licensee under that broker acting as intermediary may not:

  • Disclose to the prospective buyer that the seller will accept a price less than the asking price, unless authorized in writing to do so by the seller.
  • Disclose to the seller that the prospective buyer will pay a price greater than the price submitted in a written offer, unless authorized in writing to do so by the buyer.
  • Disclose confidential information, unless authorized in writing to disclose the information or required to do so by the Real Estate License Act, a court order, or if the information materially relates to the condition of the property.

The Real Estate License Act requires these prohibitions to be in bold print in any listing agreement or buyer’s representation agreement that authorizes intermediary. It also requires in bold print that a broker and any sponsored licensee under that broker acting as intermediary may not treat a party to the transaction dishonestly or violate the Real Estate License Act. The Texas Association of REALTORS® listing agreements and buyer representation agreements contain these statements.

There’s much more to know about acting as intermediary. Use the flowchart {NOTE: page doesn't exist on current site} in “Working both sides of one transaction” in the June 2013 issue of Texas REALTOR® to help you answer many of the questions associated with the intermediary process.

Categories: Legal
Tags: legal, rela, intermediary, magazine