The Farm and Ranch Contract has two sections on Page 10 related to fees: a Ratification of Fee and an Agreement for Payment of Brokers’ Fees.

A listing broker who has already agreed to pay a commission to a cooperating broker—in the Compensation Agreement Between Brokers (TXR 2402), for example—should fill out the Ratification of Fee box. This authorizes the escrow agent to pay the cooperating broker from the listing broker’s fee at closing.

The seller and buyer should not sign the Agreement for Payment of Brokers’ Fees if the listing broker has already agreed to pay the cooperating broker’s commission elsewhere, like in the Compensation Agreement Between Brokers. This could bind the seller or buyer to unintentionally pay additional amounts to the listing broker or the cooperating broker.

However, a seller and buyer could sign the Agreement for Payment of Brokers’ Fees if the listing broker hasn’t offered to pay a commission. Note that the agreement states either the seller or the buyer will pay the brokers.

Alternatively, if the seller wants to pay for buyer’s brokerage fees agreed upon in a buyer representation agreement, such as the Residential Buyer/Tenant Representation Agreement (TXR 1501-long form/TXR 1507-short form), the seller may include the amount to be paid in Paragraph 12A(1)(b) of the contract and does not have to sign the Agreement for Payment of Brokers’ Fees, because the seller’s signature on the Farm and Ranch Contract binds the seller to pay such fees.

Note: The Texas Real Estate Commission made changes to several sales contracts in November 2024, including the Farm and Ranch Contract (TXR 1701, TREC 25-17), to address the practice changes required by the NAR settlement.

• Seller authorization for broker-to-broker compensation. If the seller authorized the listing broker to pay a buyer’s broker using part of the listing broker’s fee, the amount specified in Paragraph 5A(2) of the Farm and Ranch Listing Agreement (TXR 1201), should be entered into the Ratification of Fee section at the top of Page 11 of the Farm and Ranch Contract (TXR 1701; TREC 25-17). Be aware that any amount added to Paragraph 12 of the contract or in the Agreement for Payment of Brokers’ Fees at the bottom of Page 11 would be in addition to the amount the seller has authorized the listing broker to pay the buyer’s broker.
• Compensation using Paragraph 12B of the Farm and Ranch Contract (TXR 1701; TREC 25-17). A seller or buyer may contribute to the other party’s brokerage fees in Paragraph 12B, which has been reworded and reorganized. The option for the seller to contribute to the buyer’s brokerage compensation is now found in Paragraph 12B(1), and an option for the buyer to contribute to the seller’s brokerage compensation has been added in Paragraph 12B(2). Paragraph 12B(1) should not be filled out if the seller or seller’s broker is obligated to pay the buyer’s broker in a separate written agreement, such as in Paragraph 5A of the listing agreement or the Agreement to Pay Brokers’ Fees at the bottom of Page 11 of the contract.
• Compensation using Agreement for Payment of Brokers’ Fees on page 11 of the Farm and Ranch Contract (TXR 1701; TREC 25-17). The fee agreement on the bottom of page 11 of the contract provides an alternative way for the seller and buyer to document their agreement regarding the payment of brokerage compensation. It should not be used if there is a separate written agreement governing the payment of brokerage fees or if contributions are to be paid under Paragraph 12B of the contract.

No. Broker-to-broker compensation remains an option in the Farm and Ranch Contract (TXR 1701, TREC 25-17), and seller authorization for broker-to-broker compensation remains an option in the Farm and Ranch Listing Agreement (TXR 1201). Sellers of farm and ranch properties still have the same options in these forms to address compensation as they had prior to the most recent revisions to the TREC sales contracts. Although seller contribution to buyer’s brokerage compensation is more prominent now in Paragraph 12B(1) of the sales contract, the addition of option 12B(2) is the only substantive change to compensation, which now provides an option for the buyer to contribute to the seller’s brokerage compensation.