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Real estate licensees in Texas are getting ready for new buyer agency agreement provisions slated to go into effect in the new year. While it was passed and filed this past spring and summer, Texas Senate Bill 1968, which modernizes the Texas Real Estate License Act, does not go into effect until January 1, 2026.
Under the current version of the law, licensees are able to begin working with a client, including showing them properties and preparing offers without a signed buyer broker agreement. However, if an agent is a Realtor, under the terms of the National Association of Realtors’ (NAR) commission lawsuit settlement agreement, that agent must have a signed buyer broker agreement before touring a home with a client.
To a certain extent, the new law brings the state’s law more in line with the terms of NAR’s settlement. After January 1, licensees must enter into a written agreement with a prospective buyer before taking any substantive action. This means that while an agent could unlock the door to a property for a buyer without having a signed agreement, the agent cannot offer any advice or opinions on the property.
If the buyer would like the agent to do more than just open the door to the property, they must enter into a signed agreement. According to the law, the agreement must outline the services the agent will provide, when the relationship ends, whether the agreement is exclusive or non-exclusive, how the agent will be compensated and a disclosure that commissions are negotiable and not set by law.
Additionally, to perform any acts of “brokerage” such as drafting or negotiating an offer, even for a buyer they just opened doors for, they must have a written buyer agency agreement.
The bill was sponsored by Charles Schwertner, a state senator representing Senate District 5, which encompasses 11 counties in central and east Texas.
Texas is not the only state to address buyer agency agreements in state legislature. Earlier this year, Alabama enacted a law that ensures homebuyers only have to sign a buyer brokerage agreement prior to submitting an offer on a property and not before touring a home with an agent.
