We often receive questions about the proper way to establish an intermediary relationship. If a broker plans to represent both the seller/buyer or landlord/tenant, then the broker must have written authorization from both clients. The various Texas REALTORS listing agreements and buyer representation agreements contain the required intermediary authorizations as well as a requirement that the broker notify the parties in accordance with the type of intermediary relationship that will take place. This can be done using the Intermediary Relationship Notice form (TXR 1409). The use of the Intermediary Relationship Notice form will also address The Real Estate License Act requirement on the broker to send written notice to both clients when a broker appoints sales agents to both clients.
Iman Ali, associate counsel
Intermediary, to quote a prior TAR attorney, is a legal fiction. It is the equivalent of the prosecutor defending the accused. An agent is a fiduciary and a fiduciary, such as an attorney, cannot represent opposing sides. The whole purpose of Intermediary is to keep both sides of the commission under one roof. When buyers and sellers agree to Intermediary, the do not really understand what they are getting into. My sellers are always my clients and I will never sucker them into dummying down my relationship w/ them.
With thinking like that I see why that attorney is a prior attorney, perhaps he should be a disbarred attorney. When done correctly intermediary does not place the buyer or the seller at a disadvantage.
It places them both at a disadvantage because the agent is not permitted to negotiate in behalf of either the buyer or seller. Attorneys are not permitted to act in an intermediary capacity and real estate licensee should not be allowed to either.
Have you not heard of intermediary with appointments? If you sponsored more than one agent you might see how intermediary really works.
Appointments still does not allow an appointed agent to actively help a seller or buyer dicker. The law says the agent may give “opinions and advice”. The law does not even define precisely what that phrase means. Does it mean the agent assigned to the seller can say “The buyer is loaded w/ money, so let’s stick w/ the list price.”? Does it mean the agent assigned to the buyer can say “The seller needs to sell, so let’s hit him w/ a lowball offer.”? Again, intermediary is a Realtor®- designed means of keeping the commission under one roof. It… Read more »
Call TREC legal and read my quote to them. You will find out that I am spot on. You have no grasp of what a fiduciary is.
You are so wrong, and I don’t need to call TREC. I can read the section of TRELA that deals with Intermediary. Intermediary with or without appointments is recognized and legal in Texas is done correctly. You live in a small town and you only sponsor 1 agent so it would not work for you. Imagine a brokerage in Dallas like Ebby with over 1500 agents and one broker. I take a listing and tell the seller if you check this box that you don’t wish to be in an intermediary transaction then the other 1499 agents in my brokerage… Read more »
The other 1499 may show the house; they just need to explain to the buyer that they represent the seller. If the buyer wants true representation (fiduciary assistance), then he simply needs to go to another brokerage. Intermediary is, indeed, a legal fiction. There are many offices that do not permit it. Why do you think attorneys can’t be intermediaries?
Clearly you do not know how intermediary works.
Be specific about my ignorance. Your comment is not constructive.
Well said. Hopefully TREC will take a position on this that truly represents the best interest of the Sellers and the Buyers.
Admirable comment, ethics and fiduciary before all else certainly is a great way to practice real estate.
TREC has no position to take. Intermediary is statutory. If a change is going to take place it would need to be done at the state legislature level, with a revision to the TRELA.
Excellent position it protects Client, you and if associated broker. Greed is the cause of many lawsuits. Minimize risk.olm
Choose your side of the negotiating table. It is hard to walk fine lines. The goodwill and relationship with your Client being altered is not worth the extra commission. A referral is more valuable.olm