Being knowledgable about how parties are represented in a real estate transaction in the state of Texas is extremely important to both buyers and sellers. Texas law requires all real estate licensees to provide the form titled “Information About Brokerage Services” to prospective buyers, tenants, sellers and landlords. Below is a brief explanation of the types of representation allowed in Texas.
1. When the Broker/Agent Represents the Owner
The Broker/Agent becomes the owner’s agent by:
a. Entering into a an agreement, usually through a written listing agreement or
b. Agreeing to act as a subagent by accepting an offer of subagency from the listing broker.
In both of these scenarios the interests of the owner must be placed first. The Broker/Agent in this situation can assist the buyer, but the interests of the owner must always be the priority. Therefore, a buyer should never tell the owner’s agent anything the buyer would not want the owner to to know because an owner’s agent must disclose to the owner any material information known to the agent.
2. When the Broker/Agent Represents the Buyer
The broker/agent becomes the the buyer’s agent by:
1. Entering into an agreement to represent the buyer, usually through a written buyer representation agreement.
A buyer’s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer’s agent anything the owner would not want the buyer to know because a buyer’s agent must disclose to the buyer any material information known to the agent.
3. When the Broker/Agent Acts as an Intermediary
An Intermediary Relationship occurs when one Broker represents both parties in a transaction. With the written consent of each party to the transaction the Broker will be given the authority to act as an Intermediary with certain duties and obligations to each party. With each party’s consent, the Broker/Intermediary may assign individual agents associated with the Broker to communicate with and carry out instructions of the other party.