Ed Neuhaus 
The buyer representation agreement conversation used to be optional. Some agents had it early. Some had it at offer time. Some just hoped it would work itself out. Starting January 1, 2026, those days are over.
Texas law now requires a written buyer representation agreement before you can do basically anything useful for a buyer. Not a suggestion. Not a best practice. The law.
A quick note: I’m not your broker (yet), and this isn’t legal advice. Always verify with your sponsoring broker and TREC directly before making changes to your practice. That said, if your broker isn’t walking you through this stuff, you might want to ask yourself why.
Lets break down exactly when you need an agreement, what has to be in it, and how to have this conversation without making it weird.
The Legal Requirement Under Section 1101.563
Here’s the actual language that matters. Under Section 1101.563 of the Texas Occupations Code, a license holder who “performs any act of real estate brokerage for a prospective buyer of residential real property must enter into a written agreement with the prospective buyer.”
That’s not ambiguous. Written agreement. Must enter into. Before performing acts of brokerage.
But here’s where it gets nuanced. The law doesn’t require an agreement before every interaction. It requires an agreement before “substantive action.” Understanding what counts as substantive action is crucial.
For the broader context on why this law exists, see my breakdown of SB 1968.
What You CAN Do Without a Signed Agreement
Real estate agents can still unlock a door for a prospective buyer without a signed agreement. That’s about it.
You can provide access to a property. You can let them walk through. You can answer basic factual questions that anyone could answer from looking at the MLS.
But the moment you start doing anything that requires your expertise or judgment, you’ve crossed into “acts of brokerage” territory.
What REQUIRES a Signed Agreement
Once you start doing any of these things, you need that agreement signed:
- Providing advice about a property
- Sharing your opinions about value, condition, or suitability
- Negotiating on behalf of the buyer
- Preparing or submitting offers
- Recommending terms or strategies
- Advocating for the buyer’s interests
In practical terms, this means you need the agreement before most showings. Because lets be honest. How often do you show a property without the buyer asking “what do you think?” at some point? The moment you answer that question with anything beyond “it has three bedrooms,” you’re performing acts of brokerage.
What Must Be In the Agreement
Texas law and TREC rules specify what a buyer representation agreement must contain. This isn’t optional.
Specific Compensation Disclosure
The agreement must include “a specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive.”
No vague language. No “to be determined.” Specific numbers or percentages.
Objective Compensation Terms
The compensation must be “objective.” That means a specific dollar amount ($0, $5,000, etc.), a specific flat fee, a specific percentage, or an hourly rate. Not “whatever the seller pays” or “market rate.”
Prohibition on Exceeding Agreed Amount
The agreement must include a term “that prohibits the agent from receiving compensation that exceeds the amount agreed to in the agreement.”
This protects buyers. You agree to a number, that’s the number. You can’t later claim you’re owed more.
Termination Date
Every agreement needs a termination date. When does this relationship end? For exclusive agreements, this gives buyers a clear exit point.
Exclusive vs Non-Exclusive
The agreement must clearly state whether representation is exclusive or non-exclusive. Exclusive means the buyer works only with you. Non-exclusive means they can work with other agents too.
NAR Rules vs Texas Law: The Key Differences
If you’re a REALTOR and NAR member, you’ve been dealing with written buyer agreement requirements since August 2024 (from the NAR settlement). But Texas law isn’t identical to NAR rules.
Timing
NAR rules require an agreement before touring a home. Texas law is slightly different. It requires an agreement before “substantive action,” which could technically happen during or after a showing if you’re only providing access. But as a practical matter, treat them the same. Get the agreement signed before you show property.
Scope
Texas law applies to “residential real property.” NAR rules apply to MLS participants regardless of property type. So for commercial properties, the Texas legal requirement may not apply, but MLS rules still might.
Enforcement
Violating NAR rules can get you in trouble with your association. Violating Texas law can get your license suspended or revoked. That’s a bigger stick.
The Texas law states that failing to use a buyer representation agreement as required is grounds for disciplinary action under Section 1101.652. TREC has the authority to suspend your license for non-compliance.
How to Have This Conversation
Ok, so you need the agreement. But how do you bring it up without making things awkward? Here’s how we train our agents at Neuhaus Realty Group.
Lead With Value, Not Paperwork
Don’t start with “I need you to sign this.” Start with what you’re going to do for them.
“Before we start looking at homes, I want to make sure you understand exactly how I work and what you can expect from me. Let me walk you through how I represent buyers.”
Explain the Why
Buyers hear about the lawsuits. They have questions. Be the agent who explains things clearly.
“Texas law now requires a written agreement before I can provide advice and advocate for you. This actually protects you. It puts in writing exactly what I’ll do and what it costs. No surprises.”
Present Options
You can offer different agreement structures. Exclusive vs non-exclusive. Different compensation arrangements. Different term lengths. Giving buyers options makes them feel in control.
Address Compensation Directly
“Lets talk about how I get paid. Historically, the seller paid the buyer’s agent through the listing. That still happens often, but it’s not guaranteed. Here’s how we’ll handle it…”
Be direct. Buyers respect direct.
Handle Objections Calmly
Some buyers will push back. “Why do I need to sign something before I even see a house?”
Your answer: “Because once we start looking, I’m going to be giving you advice, sharing my expertise, and advocating for your interests. That’s valuable work, and we both deserve clarity about our relationship before I start doing it.”
What Happens If You Don’t Comply
This isn’t theoretical. The consequences are real.
TREC has enforcement authority. If you’re showing properties, providing advice, and negotiating offers without a written buyer representation agreement, you’re violating the law. Period.
Under Section 1101.652, TREC can take disciplinary action including suspension or revocation of your license. Reports indicate fines can start at $1,000.
Beyond the legal risk, there’s practical risk. If a transaction goes sideways and there’s a dispute about compensation or representation, having no agreement leaves you exposed. The agreement protects you as much as it protects the buyer.
The Non-Representation Alternative
What if a buyer just wants to see a house but isn’t ready to commit to representation? That’s where the non-representation agreement comes in.
Under Section 1101.562, you can show property without representing the buyer if you have a written non-representation agreement. But the limits are strict. 14 days maximum. No advice. No opinions. No negotiation. Just access.
This isn’t a workaround. It’s a specific tool for specific situations. Most of the time, you want representation. Representation is where the value is.
Getting Your Forms Right
Make sure you’re using current forms. TXR (Texas REALTORS) provides buyer representation agreement forms that comply with the new requirements. Your broker should have these in your transaction management system.
The related IABS form has also been updated to reflect these changes. Present the IABS at first substantive dialogue, then move into the buyer representation discussion.
Ed’s Approach
Here’s how I train my agents. The buyer consultation happens before any showing activity. We sit down (or do a video call) and cover:
- What the buyer is looking for and their timeline
- How our process works and what they can expect
- The IABS disclosure and what it means
- The buyer representation agreement and its terms
- How compensation works in the current environment
By the time we’re done, the buyer understands the relationship, the agreement is signed, and we’re ready to start searching. No awkward paperwork in the car before a showing. No surprise conversations at offer time.
That’s how professionals operate.
Questions?
The buyer representation conversation might feel uncomfortable at first. It gets easier. And honestly, the agents who master this conversation are going to dominate the next decade of Texas real estate.
Need help structuring your buyer consultation or understanding the agreement requirements? Reach out to me. I’m happy to share what’s working for our team, even if you’re not one of my agents. Yet.
