Buyer Representation in Texas

Texas is truly unique and I have often heard that it is a “backwards” state. There are many states that have not adopted a buyers representation agreement and still operate on a sub agency format. Even if you are working with a real estate agent that does not have a property listed; they may be working as a “sub agent” of the listing broker. This means they too represent the seller. This is not to say that a buyer is treated unfairly, but the buyer does not have “representation.”

In Texas, a form called INFORMATION ABOUT BROKERAGE SERVICES (TAR form 2501) is provided to prospective buyers, sellers, tenants, and landlords. The form is simply to inform prospective clients of their rights and how Brokerage services or representations for either party function.

If the broker represents a specific party they are in essence acting as an agent of the party being represented. It also clearly states that if the broker acts as a subagent, “the broker represents the owner in cooperation with the listing broker.” (TAR form 2501). Regardless of representation in Texas, the broker is obligated to treat everyone honestly.

As a buyer in Texas, one doesn’t have to choose a broker to represent them; however, it would be wise to have someone acting in one’s best interest. The best thing about buyer representation is that it costs nothing to have representation. Because of the agreements between brokers through the Multiple Listing Service and contract, the brokers agree to share in the compensation charged by the listing agent.

There are other states that have adopted a buyer’s representation agreement, whereby the buyer has representation and fiduciary duties in place, so it is always wise to ask a REALTOR® where you plan on buying your next home if they have buyer representation. If they don’t, you should be treated fairly, honestly, and material facts should always be disclosed, but remember, if they are a “sub agent” they do not represent you. You always have the right to hire an attorney to ensure you are protected. Texas isn’t so backwards after all!

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