Texas guide

Compensation Disclosure Requirements for Texas Real Estate Licensees

In Texas, your buyer's agent must put their pay in writing in your buyer representation agreement before they help you shop, so you know who pays them and how much.

Reading as buyer.

TL;DR

In Texas, your buyer's agent must put their pay in writing in your buyer representation agreement before they help you shop, so you know who pays them and how much. If they earn money from any other source on your purchase, like a referral fee or a stake in the title company they send you to, they have to tell you in writing under rules. Texas also lets a buyer's agent give you a cash rebate from their commission as long as your lender is told.

Before you start — 8 things to know

  • In Texas, your buyer's agent must list their fee in your written buyer representation agreement before they tour homes with you, so you sign off on the dollar amount or percentage up front.

  • If your agent collects pay from anyone other than you or the seller, like a builder bonus, a referral fee, or an co-op offer, requires them to disclose that compensation to you in writing.

  • Texas does not ban cash rebates from a buyer's agent, so you can negotiate to have part of the commission credited back to you at closing.

  • Any commission rebate you receive must be disclosed to your lender, and most loan programs will not let it count toward your down payment without written approval.

  • If your buyer's agent refers you to a title company, mortgage company, or inspector that their brokerage owns, federal affiliated business arrangement rules require a written disclosure and you cannot be forced to use that company.

  • Referral fees on a Texas transaction can only be paid to people who hold a real estate license, since paying an unlicensed finder is illegal under Occupations Code §1101.651.

  • Your closing statement itemizes every dollar of compensation paid on the transaction, so you can see exactly what your buyer's agent, the seller's agent, and any referral broker received.

  • Texas brokers must keep all signed compensation paperwork for four years, so you can request a copy of your buyer representation agreement and any disclosures if a dispute comes up later.

The timeline — step by step

  1. Before touring homes with a Texas agent, you sign a buyer representation agreement that states the agent's compensation in writing.

  2. If your agent expects extra pay from a builder, a referral source, or an co-op offer, they hand you a written disclosure of that compensation before you make an offer.

  3. When you write an offer in Texas, your agent shows you in writing any buyer-agent compensation the seller is offering and how it will be paid at closing, since the settlement moved that offer out of the .

  4. If your buyer's agent refers you to a title company, lender, or warranty company owned by their brokerage, they give you an affiliated business arrangement disclosure to sign before you commit.

  5. If you negotiated a commission rebate from your buyer's agent, your lender is notified in writing during the loan application so the rebate is applied correctly at closing.

  6. At closing, your Texas settlement statement lists every commission, referral fee, and rebate paid on the transaction, so you can confirm the amounts match the disclosures you signed.

  7. After closing, your buyer's agent's broker keeps the signed compensation paperwork on file for four years in case audits the file or you need a copy.

Common questions

How do I find out how much my buyer's agent is being paid in Texas?
Your buyer representation agreement has to spell out the dollar amount or percentage before they start showing you homes, and the final number is itemized on your closing statement.
Can my buyer's agent take a kickback from the title company they sent me to?
Only if they give you a written affiliated business arrangement disclosure that explains the ownership relationship and tells you that you are free to pick a different title company.
Is it legal to get a cash rebate from my buyer's agent in Texas?
Yes — Texas allows commission rebates from a buyer's agent to a buyer, but your lender must be told and the rebate generally cannot be used as your down payment without lender approval.
What happens if my agent hides a referral fee they received on my deal?
Failure to disclose a conflicting interest is grounds for license action under Texas Occupations Code §1101.652(b)(19), and you can file a complaint with .
Does my buyer's agent have to tell me about money they get from a builder?
Yes — any compensation from someone other than you or the seller, including builder bonuses, must be disclosed to you in writing under rules.

Glossary

3 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.

Sources

  1. [1]
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