One of the major rule changes that the National Association of Realtors® (NAR) adopted in August 2024 (following its class-action settlement) was to mandate the use of buyer representation agreements before showing properties. Stated goals include increasing transparency for the buyer and professional about exactly what their professional relationship entailed.
Texas has now formalized a buyer representation agreement mandate under state law. Introduced in March 2025, the bill was passed in June (albeit “by default,” without the governor’s signature) and will go into effect as law on January 1, 2026. It was supported by the Texas Realtors® association.
In a phone call with RISMedia, Texas Realtors® Vice President of Governmental Affairs Tray Bates cited the reason for changing the law as “archaic” language in existing law. Under previous (i.e., in effect until January 1) Texas law, not using a buyer representation agreement automatically made an agent a representative of the seller.
“So while the buyer thinks he called somebody and said, ‘Hey, show me this house, let’s go look at it,’ they didn’t sign anything. That representative was actually representing the seller. So that was not necessarily a great thing about a law, so it was time to clean it up,” Bates explained.
The full text of the legislation reads that “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.”
Unlike the NAR member mandate, though, this law does not mandate that a buyer representation be signed before a showing of a property to a prospective buyer. It is only later acts of real estate brokerage, such as advice or making an offer on behalf of a client, that require a written buyer agreement. If a customer signs a touring agreement with an agent/broker before the showing, then afterwards they must sign a separate buyer representation agreement, per the law.
Asked about how Texas Realtors® members responded to the law, Bates answered they were “very happy to get rid of that phase of our law that required you to automatically represent the seller when you had no agreement with the buyer.”
“So now there’s extreme clarity. You’re either going to represent the seller with a listing or reference the buyer with buyer agreement. But if there’s still that, if you will, a dating phase of just showings, we allow for showings without representation,” Bates continued.
Conversely, Alabama earlier this year passed a law (supported by the Alabama Association of Realtors®) explicitly banning the requiring of buyer agreements before agents tour a property with a client.
The buyer representation agreement is required by this law to list the services a real estate professional will offer the signing buyer; the termination date of the agreement; whether the agreement is for exclusive or non-exclusive representation; if the real estate professional does or does not represent the buyer as a buyer’s agent (if the only “act of brokerage” being performed is a showing); the rate of compensation the agent will receive; and, in “conspicuous language” that broker compensation is negotiable.
The text of the law also adds a stipulation that failing to use a buyer representation agreement is one reason the Texas Real Estate Commission can suspend a real estate license. However, Bates claimed that such a suspension is unlikely under normal circumstances.
“The way the process typically works is (the commission doesn’t) just go strip someone of their license. It’s about educating them, giving them an opportunity to understand that, ‘Hey, this is how this is supposed to work.’ But yeah, (the intent is not to), if you don’t have a buyer rep agreement, to strip you of your license…(the Texas Real Estate Committee leans) towards education before the stick,” Bates said.
Another feature of the law is that broker applicants and brokers renewing their licenses must now take a Broker Responsibility Course; the Texas Real Estate Commission shared a guide for brokers on what the law will mean for them come January 1. Subagency, where an agent would work as a seller’s subagent and informally represent the buyer, is also eliminated under this law.
Local Texas real estate associations also posted messages of support for the bill’s passage. The MetroTex Association of Realtors®, which maintains 10 locations in the Dallas metro area, listed the new buyer representation agreement as the first accomplishment of a “major victory” for real estate. The Greater Fort Worth Association of Realtors® also praised the new law for adding clarity and transparency on buyer-broker relationships.
