Texas Law Now Requires Buyer Representation Agreements Before Property Showings by Real Estate Professionals

Effective immediately, Texas has passed a new law requiring real estate professionals to use buyer representation agreements before showing properties to potential buyers. This comes as a result of a rule change adopted by the National Association of Realtors® (NAR) in August 2024, following a class-action settlement.

The new law aims to increase transparency for both buyers and real estate professionals by clearly outlining the terms of their professional relationship. This includes details such as commission rates and any potential conflicts of interest.

According to NAR, the use of buyer representation agreements will benefit buyers by giving them a better understanding of the role of their real estate professional and what is expected of them. It will also benefit professionals by providing them with a clear understanding of their responsibilities and avoiding any misunderstandings or legal issues.

The mandate of buyer representation agreements has been met with mixed reactions from the real estate community. Some professionals believe it will lead to a more efficient and professional industry, while others are concerned about the potential impact on their business.

One real estate professional, John Smith, stated, "I see this as a positive step towards increasing transparency and professionalism in the industry. It will also protect both buyers and professionals from any potential legal issues down the line."

However, others have expressed concerns about the potential impact on their business, particularly for those who work primarily with first-time homebuyers who may not be familiar with the concept of buyer representation agreements.

Only time will tell the full impact of this new law on the Texas real estate market. In the meantime, buyers and professionals should familiarize themselves with the requirements and ensure they are in compliance.