Ed 
Hiring a real estate agent you trust is one of the best things you can do when buying or selling a home. Your agent’s job is to guide you through the transaction while making sure you’re getting a fair deal. What happens if your agent, or your agent’s brokerage, also represents the other party?
This situation comes up more often than buyers and sellers expect, and in Texas it is handled very differently than in most states. If you are buying or selling here, you need to understand intermediary brokerage, not generic “dual agency,” because Texas law replaced dual agency with the intermediary status back in September 2005 (TREC).
What People Mean by “Dual Agency”
In most of the country, “dual agency” describes a single agent or brokerage representing both the buyer and the seller in the same transaction. Some states allow it with written consent. Others ban it outright. Texas does neither. Texas law prohibits common-law dual agency and instead allows a regulated alternative called intermediary brokerage under Texas Occupations Code Section 1101.559 (Texas Statutes).
So when you hear an agent or article use the phrase “dual agency” in Texas, what they actually mean, or should mean, is intermediary status. The distinction matters because the rules, the disclosures, and your protections are not the same.
How Intermediary Brokerage Works in Texas
An intermediary is a broker, not an individual agent, who represents both the buyer and the seller in the same transaction. Texas requires three things before that can happen (TREC):
- Both parties receive the Information About Brokerage Services (IABS) form at first substantive contact.
- The seller signs a listing agreement authorizing intermediary status, with the conduct prohibited under TRELA Section 1101.651(d) shown in conspicuous bold or underlined print.
- The buyer signs a representation agreement with the same authorization and the same conspicuous disclosure.
The intermediary broker must act fairly and impartially. The broker cannot favor one party over the other and cannot disclose confidential information from one side to the other without written permission, with limited legal exceptions.
Appointed Associated License Holders
Texas adds one more layer that confuses a lot of buyers and sellers. Under Section 1101.560, the intermediary broker can appoint different licensed agents at the same brokerage to work directly with each party (Texas Statutes). The seller gets one appointed agent. The buyer gets a different appointed agent. Both work for the same broker, but each can give opinions and advice to their assigned party during negotiations.
Without appointments, the intermediary broker must stay neutral and cannot give advice to either side. With appointments, each party gets real advocacy from a licensed agent inside the same brokerage. Most large Texas brokerages handle in-house transactions this way.
When Does Intermediary Status Come Up?
Intermediary status comes up most often in two situations. The first is when a buyer working with an agent becomes interested in a home that the same brokerage already has listed. The second is when a buyer and seller already know each other and want to use one agent to facilitate a deal they have largely negotiated themselves.
Texas also has very large brokerages with thousands of agents, so it is not unusual for the listing agent and the buyer’s agent to work for the same broker without ever having met. That triggers intermediary status the moment both sides sign a contract through the same brokerage, even though two separate agents are involved.
How Commission Works Now
Commission used to follow a predictable pattern, where the seller paid one combined commission and the listing brokerage split it with the buyer’s brokerage. That changed nationally on August 17, 2024 when the National Association of REALTORS settlement took effect (NAR). Buyer broker compensation can no longer be offered through the MLS, and buyers must sign a written representation agreement that spells out exactly what their agent will be paid, by whom, and how, before touring a home.
In an intermediary transaction, the broker still gets paid, but the source and amount of compensation must be disclosed in writing in both the listing agreement and the buyer representation agreement. Commission rates are negotiable and not set by law. There is no fixed “dual agency discount.” What the broker earns is whatever the two contracts say.
Risks of Intermediary Brokerage
Even with the Texas safeguards, having one broker on both sides of a deal carries real risks. Buyers and sellers have opposing interests on price, timing, repairs, and contingencies. A single broker cannot push hard for one side without compromising the other, which is exactly why the law requires the intermediary to stay neutral and why appointed associates exist.
Confidentiality is the other concern. Once a brokerage represents both parties, anything one side shares can affect how the deal moves forward. Texas law strictly limits what an intermediary can reveal, but the practical risk of an inadvertent slip is real, especially when one agent is handling both sides without appointments.
Red Flags to Watch For
Be cautious if a listing agent suggests representing you as a buyer without involving a separate agent. If the same individual licensee tries to handle both sides without appointments through their broker, ask who is advocating for your interests during negotiations.
If you are a buyer and your agent brings you an off-market listing where their brokerage represents the seller, slow down. Ask whether the brokerage will appoint separate associated licensees and read every disclosure carefully before signing.
What Changes January 1, 2026
Senate Bill 1968 takes effect January 1, 2026 and eliminates the concept of subagency from Texas real estate law (TREC, Texas REALTORS). It also formalizes that a written buyer representation agreement is required before an agent can give advice, opinions, or negotiate offers on behalf of a buyer. Unlocking a door for a showing is still allowed without one, but that is the limit.
The bottom line is that Texas is tightening the rules around who represents whom, which makes understanding intermediary status more important, not less.
How to Protect Yourself
If you are buying or selling in Texas and intermediary status is on the table, read every disclosure, ask whether the broker intends to appoint separate associated licensees, and confirm in writing how compensation will be paid. If you want full single-side representation, you have the right to insist on it. Talk to your buyer’s agent or listing agent about your options before anyone signs anything.
If you have questions about how intermediary brokerage applies to your specific Austin-area transaction, call Ed at (512) 827-8830 or reach out through our contact page.
