Texas guide

Buyer Representation Agreement Requirements Post-NAR Settlement in Texas

Q: Do I have to pay my Texas agent out of pocket now?

Not necessarily. Under the NAR settlement that took effect August 17, 2024, you and your agent agree on a specific number in the buyer representation agreement, but the seller can still cover some or all of that amount. You only pay out of pocket if the seller's contribution is less than what you and your agent agreed to in writing.

Q: Can I cancel a buyer representation agreement in Texas if it isn't working out?

Usually yes. The Texas REALTORS (TAR) form TXR 1501 typically includes a way for you and the agent to end the agreement — either by mutual agreement or a notice-and-cure clause. You can't just walk away with no reason if the form doesn't include a unilateral termination option, so read the termination section carefully before you sign.

Q: Why does the pay have to be a specific number — can't we just say 'whatever the seller pays'?

No. After the NAR settlement, the buyer representation agreement has to state a concrete amount or formula, like a flat fee or a fixed percent of the purchase price. Open-ended language like 'whatever the seller offers' or 'the going rate' isn't allowed, because the rule is designed to make sure you know upfront exactly what you might owe.

Q: Will my Texas agent skip showing me homes that pay them less?

They aren't allowed to. The NAR settlement specifically bans 'steering,' which is pushing buyers toward homes based on what the agent gets paid. Your agent in Texas has to show you every home that matches what you're looking for, regardless of what the seller is offering to the buyer's side.

Before a Texas agent can take you to see homes listed on the local MLS, you have to sign a written buyer representation agreement that spells out exactly how the agent gets paid.

TL;DR

Before a Texas agent can take you to see homes listed on the local MLS, you have to sign a written buyer representation agreement that spells out exactly how the agent gets paid. The pay has to be a real number — a flat fee, a percent of the price, or a combination — not a vague 'whatever the seller offers.' If the seller ends up chipping in less than the amount you and your agent agreed to, you owe the difference unless you change the agreement in writing.

Before you start — 9 things to know

Before any Texas agent shows you a home listed on the , you have to sign a written buyer representation agreement — this became a nationwide rule on August 17, 2024 as part of the settlement.
In Texas the standard buyer representation form is TXR 1501, published by Texas REALTORS (), and most agents in the state will hand you this exact form to sign.
The buyer representation agreement has to list a specific amount or formula for the agent's pay — for example a flat dollar amount, a percent of the purchase price, or a mix of both.
Open-ended pay language like 'whatever the seller offers' or 'the going market rate' is no longer allowed in a buyer representation agreement after the settlement; the number has to be concrete.
If the seller offers to cover part of the buyer's agent fee, that money goes toward what you owe your agent — but if it's less than the amount in your buyer representation agreement, you are on the hook for the difference unless you and your agent rewrite the deal.
Your Texas agent is required to show you every home that fits what you're looking for, even if the seller is offering little or no payment to the buyer's agent — steering you only toward higher-paying listings is banned by the settlement.
The Texas REALTORS () buyer representation form (TXR 1501) includes ways to end the agreement — usually a mutual termination or a notice-and-cure clause — so read those sections before you sign.
Texas was ahead of the curve on written buyer representation: the Texas Real Estate Commission () and Texas REALTORS encouraged these agreements long before the settlement made them mandatory nationwide.
You can change the pay terms in the buyer representation agreement later — for example, dropping your agent's fee to match what a particular seller is offering — but the change has to be in writing and signed by both of you.

The timeline — step by step

You meet with a Texas agent and talk through what you're looking for, what they'd do for you, and how they want to be paid.
The agent gives you the Texas REALTORS () Buyer Representation Agreement (form TXR 1501) to review before you ever tour a home listed on the .
You and the agent negotiate the pay section — a specific dollar amount, a percent of the purchase price, or a combo — and write that exact figure into the buyer representation agreement.
You sign the buyer representation agreement before your first tour of any home listed on the ; under the settlement that came into effect August 17, 2024, the agent can't take you inside one until the paperwork is signed.
You start touring homes; your Texas agent must show you every property that fits your criteria, not just the ones where the seller is paying the buyer's agent the most.
When you make an offer on a home, your agent checks what (if anything) the seller is offering to pay the buyer's side, and applies that toward the amount in your buyer representation agreement.
If the seller's contribution doesn't cover what your buyer representation agreement says your agent gets, you either agree in writing to pay the difference at closing or you and your agent amend the agreement to a lower amount.
You either close on the home and the agent gets paid per the buyer representation agreement, or — if it isn't working out — you end the relationship using the termination terms in form TXR 1501 from Texas REALTORS ().

Common questions

Do I have to pay my Texas agent out of pocket now?

Not necessarily. Under the settlement that took effect August 17, 2024, you and your agent agree on a specific number in the buyer representation agreement, but the seller can still cover some or all of that amount. You only pay out of pocket if the seller's contribution is less than what you and your agent agreed to in writing.

What happens if the seller offers less than what I promised my agent?

You are responsible for the difference, unless you and your agent change the buyer representation agreement in writing before closing. For example, if the buyer representation agreement says 3% and the seller is only offering 2%, you'd owe the remaining 1% at closing, or you could ask your agent to amend the agreement down to 2%.

Can I just go to an open house without signing anything in Texas?

Yes — the buyer representation agreement is required before an agent takes you on a private tour of a home listed on the , not before you walk into an open house being hosted by the listing agent. But the moment you ask a Texas agent to start showing you homes one-on-one, they will need that signed agreement first.

Can I cancel a buyer representation agreement in Texas if it isn't working out?

Usually yes. The Texas REALTORS () form TXR 1501 typically includes a way for you and the agent to end the agreement — either by mutual agreement or a notice-and-cure clause. You can't just walk away with no reason if the form doesn't include a unilateral termination option, so read the termination section carefully before you sign.

Why does the pay have to be a specific number — can't we just say 'whatever the seller pays'?

No. After the settlement, the buyer representation agreement has to state a concrete amount or formula, like a flat fee or a fixed percent of the purchase price. Open-ended language like 'whatever the seller offers' or 'the going rate' isn't allowed, because the rule is designed to make sure you know upfront exactly what you might owe.

Will my Texas agent skip showing me homes that pay them less?

They aren't allowed to. The settlement specifically bans 'steering,' which is pushing buyers toward homes based on what the agent gets paid. Your agent in Texas has to show you every home that matches what you're looking for, regardless of what the seller is offering to the buyer's side.

Is the form my Texas agent uses standard, or did they make it up?

Most Texas agents use form TXR 1501, the Buyer Representation Agreement — Exclusive Right to Purchase, published by Texas REALTORS (). It's been the standard buyer representation form in Texas for years and was updated to match the new settlement rules around how agent pay is disclosed.

Glossary

4 terms

NAR — National Association of Realtors: The national trade group for real-estate agents. The 2024 NAR settlement is the legal deal that changed how buyer's agents get paid.
MLS — Multiple Listing Service: The shared database agents use to list and find homes for sale. Most homes you'll see online started here.
TREC — Texas Real Estate Commission: The state agency that licenses real-estate agents in Texas and writes the standard forms agents have to use.
TAR — Texas Association of Realtors: Texas's trade group for agents. Writes the buyer-rep agreement and many of the optional forms agents use day to day.

Sources

Last updated