To disclose their representation of a party upon the first contact with a party or a licensee representing another party.
What are the agency disclosure requirements for real estate licensees?
May a broker act as a dual agent?
Section 1101.561 of the Real Estate License Act provides that if the broker will represent both the buyer and the seller in the transaction, the broker must act as an intermediary. One may not agree to act as a dual agent and comply with the Real Estate License Act.
Is disclosure of agency required to be in writing?
The disclosure may be oral or in writing. Licensees must provide the parties with the written statement titled Information About Brokerage Services at their first substantive meeting. This information simply defines several types of agency relationships. The licensee should clarify which party he represents and make that representation clear to all parties. The Information About Brokerage Services form encourages the consumer to enter into a written agreement with a broker if the consumer wants to be represented.
As a listing agent, I hold open houses. If a prospective buyer at an open house wants to purchase the property I listed, can I represent that buyer?
Your broker may represent the buyer if your broker has chosen to offer intermediary services. You and your broker must take a few steps to comply with the requirements of the Texas Real Estate License Act (TRELA) and to ensure all parties understand the situation.
You must provide the buyer with the Information About Brokerage Services (IABS 1-0, TXR 2501) form upon first substantive dialogue, which in this case is when the buyer approaches you about representation. You must also disclose—verbally or in writing—that your broker is representing the seller.
If the buyer chooses to have your broker represent him or her, the buyer can enter into a representation agreement with the broker. Written consent that specifies the source of the broker’s compensation is required from all parties before a broker can serve as an intermediary. The Residential Real Estate Listing Agreement, Exclusive Right to Sell (TXR 1101) and the Residential Buyer/Tenant Representation Agreement (TXR 1501) satisfy this requirement.
Next, the broker should notify the buyer and seller of whether the broker will appoint licensed associates to provide advice and opinion to each of the parties by providing the Intermediary Relationship Notice (TXR 1409) and having the buyer and seller sign it. The broker would then appoint an associated license holder to the buyer and a different associated licensed holder to the seller. You could be one of the agents appointed. If the broker is not going to make appointments then the broker would be the intermediary and any associated license holders of the intermediary would be required to function as an intermediary, would not be permitted to provide advice or opinion to either of the parties, and would not be allowed to favor one party over the other.