Legal FAQs for REALTORS®
What are the agency disclosure requirements for real estate licensees? (updated Nov. 1, 2003)
To disclose their representation of a party upon the first contact with a party or a licensee representing another party.
May a broker act as a dual agent? (updated Nov. 7, 2005)
Section 1101.561 of the Real Estate License Act provides that if the broker will represent both the buyer and the seller in the transaction, the broker must act as an intermediary. One may not agree to act as a dual agent and comply with the Real Estate License Act.
Is disclosure of agency required to be in writing? (updated Nov. 7, 2005)
The disclosure may be oral or in writing. Licensees must provide the parties with the written statement titled Information About Brokerage Services at their first substantive meeting. This information simply defines several types of agency relationships. The licensee should clarify which party he represents and make that representation clear to all parties. The Information About Brokerage Services form encourages the consumer to enter into a written agreement with a broker if the consumer wants to be represented.
As a listing agent, I hold open houses. If a prospective buyer at an open house wants to purchase the property I listed, can I represent that buyer? (Updated Sept. 18, 2015)
Yes, your broker—or you acting on your broker’s behalf—may represent the buyer if your broker has chosen to offer intermediary services. But you and your broker must take a few steps to ensure all parties understand the situation.
You must provide the buyer with the Information About Brokerage Services (TREC OP-K, TAR 2501) form upon first substantive dialogue and disclose—orally or in writing—that the broker is representing the seller.
If the buyer chooses to have your broker represent him or her, the buyer can enter into a representation agreement with the broker. Written consent, which states the source of compensation and broker’s obligations as intermediary under the Texas Real Estate License Act, is required from all parties before a broker can serve as an intermediary. The Residential Real Estate Listing Agreement, Exclusive Right to Sell (TAR 1101) and the Residential Buyer/Tenant Representation Agreement (TAR 1501) satisfy these requirements.
Next, the broker should notify the buyer and seller of whether the broker will appoint licensed associates to provide advice and opinion to each of the parties during negotiations by providing the Intermediary Relationship Notice (TAR 1409) and having the buyer and seller sign it. The broker would then appoint a sponsored license holder to the buyer and a different sponsored licensed holder to the seller. You, as a sponsored license holder of the broker, could be one of the agents appointed. If the broker is not going to make appointments, you, as a sponsored license holder of the broker, could act on behalf of the broker as intermediary, but you would not be permitted to provide advice or opinion to either of the parties.
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