A new law will change The Real Estate License Act to make it clearer to consumers who your agents are working for during the real estate transaction.
SB 1968 was a top priority for Texas REALTORS® during this year’s Regular Session of the Texas Legislature. Here are highlights of what is changing on January 1.
No more subagency
Subagency was frequently misunderstood by clients and even many agents. SB 1968 eliminates subagency in all real estate transactions. That includes residential, commercial, vacant land, farm & ranch—every type of real estate transaction.
Agents can now show property to any party without representation, if the agent:
1. Has not agreed, either orally or in writing, to represent the prospective buyer.
2. Is not otherwise acting as the prospective buyer’s agent at the time of the showing.
3. Does not provide opinions or advice regarding the property or real estate transactions in general.
4. Does not perform any other act of real estate brokerage activity.
5. Complies with current requirements of disclosing representation and providing the IABS prior to the showing.
Your agents who perform showings without representation may confirm information regarding the size, price, and terms of the property. Remember, you can determine for your brokerage whether not your agents will be authorized to perform showings without representation.
Agents must have written agreements with prospective buyers of residential property.
The agreement must be entered into prior to showing the real property, or if there is no showing, before presenting a purchase offer. The written agreement can be a full representation agreement or a showing-only agreement without representation if that is the only service your agent is providing. Remember that all representation agreements are to be made in the name of the broker.
New rules require that all written buyer agreements include:
1. The services to be provided
2. The termination date of the agreement
3. Whether the agreement is exclusive or non-exclusive
4. Whether the license holder represents the buyer as the buyer’s agent or does not represent the buyer as the buyer’s agent if showing real property is the only brokerage act being performed
5. The amount or rate of compensation the broker will receive and how the amount is determined
6. Conspicuous language that broker compensation is not set by law and is fully negotiable.
Texas REALTORS® buyer representation forms meet these new requirements.
For a showing-only agreement without representation, the agreement may not be exclusive and may not include a termination date more than 14 days from the date the agreement is entered into. Look for a new Texas REALTORS® showing-only agreement soon that meets the new requirements.
If a showing-only agreement is entered into and the prospective buyer wants your agent to provide any other acts of real estate brokerage, your agent must enter into a
separate written representation agreement with the buyer.
Hosting an open house
When hosting an open house that is not listed with your brokerage, your agents must now have a written agreement with anyone viewing the property. This could be as simple as a non-exclusive showing agreement that the attendees sign at the door.
All broker applicants must now take the broker responsibility course
Previously, it was only required for designated brokers, supervising brokers, and sales agents who supervise other license holders.
TREC to recognize associated brokers
SB 1968 allows TREC to provide notice to a sponsoring broker when an affiliated associated broker receives a complaint.
More information on SB 1968 you can share with your agents:
• Texas REALTOR® magazine article
• This TREC explainer
• Two-page explainer
• Legal Briefs videos
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