Which form should I use? – Texas REALTORS®-2021十大正规彩票app

January 01, 2025

Compensation in Farm & Ranch Transactions

Note that the Farm and Ranch Contract (TXR 1701) has additional broker compensation provisions separate from Paragraph 12A(1)(b). Be sure these provisions are accurately completed to avoid conflict with any amounts listed in Paragraph 12A(1)(b) for payment of brokerage fees.

Buyer agent compensation is now addressed in numerous forms. Which form should I use?

The Texas Real Estate Commission recently adopted changes to the sales contracts that impact how members use the Texas REALTORS® compensation agreements: Compensation Agreement Between Broker and Owner (TXR 2401) and Compensation Agreement Between Brokers (TXR 2402).

What changed?

TREC amended Paragraph 12A(1)(a) (Seller’s Expenses) and 12A(2) (Buyer’s Expenses) of the sales contracts to clarify that each party pays the brokerage fees that they each have agreed to pay. New language in Paragraph 12A(1)(b) allows for a specific seller contribution to be applied to the buyer’s brokerage fees.

What form do I use if the seller is willing to pay buyer’s broker fees directly (not through the listing broker)?

If the seller agrees to contribute an amount to be applied to the buyer’s brokerage fees, the parties should complete Paragraph 12A(1)(b) in the TREC sales contract. The Compensation Agreement Between Broker and Owner (TXR 2401) is not needed if 12A(1)(b) is used. Using Compensation Agreement Between Broker and Owner and completing 12(A)(1)(b) creates a duplicate obligation for the seller to pay those fees. The form creates a contractual obligation between the seller and the buyer’s broker outside of the sales contract and would be appropriate in the case of a for-sale-by-owner transaction or another scenario where compensation between a seller and buyer’s broker is handled outside of the sales contract.

For example, if the seller has checked box Paragraph 5B, Broker’s Fee (without compensation for other broker) on the Residential Real Estate Listing Agreement, Exclusive Right to Sell (TXR 1101), the seller can later negotiate an amount the seller is willing to pay the buyer’s broker and use Paragraph 12A(1)(b) of the sales contract to allow for a specific seller contribution to be applied to the buyer’s brokerage fees.

What form do I use if the seller did agree to pay buyer’s brokerage fees through the listing broker at the time of listing?

If the seller has checked box Paragraph 5A, Broker’s Fee (with compensation for other broker) on the Residential Real Estate Listing Agreement, Exclusive Right to Sell (TXR 1101), the listing broker and buyer’s broker should complete a separate written compensation agreement to formalize the payment of compensation by the listing broker to the buyer’s broker. Texas REALTORS® Compensation Agreement Between Brokers (TXR 2402) can be used for this purpose and the Disclosure Paragraph on the Broker Information page of the TREC sales contracts can be completed to reflect this agreement. The parties should not use Paragraph 12A(1)(b) of the sales contract in this scenario because the listing broker is paying the buyer’s brokerage fees through the separate broker compensation agreement. Paragraph 12A(1)(b) should only be used when the seller agrees to pay the buyer’s brokerage fees directly.

When should I fill out the Disclosure Paragraph on the Broker Information page of the TREC sales contracts?

The Disclosure Paragraph should only be filled out if the listing broker has agreed to pay the buyer’s broker in a separate agreement such as Compensation Agreement Between Brokers. If the parties negotiated an amount the seller will pay to be applied to buyer’s brokerage fees in Paragraph 12A(1)(b), that amount should not be entered in the Disclosure Paragraph, as it is already in the contract.

What form do I use for compensation as the buyer’s agent when I am intermediary?

When the broker is acting as intermediary, compensation may be covered by the listing agreement if the seller agreed to 5A, Broker’s Fee (with compensation for other broker) on the Residential Real Estate Listing Agreement, Exclusive Right to Sell (TXR 1101). If the seller instead checked 5B, Broker’s Fee (without compensation for other broker), the parties can negotiate the seller paying an additional amount to be applied to buyer’s brokerage fees and the parties should complete 12(A)(1)(b) of the sales contract.

I have a written buyer’s representation agreement with my client. The seller is offering buyer’s agent compensation in an amount that is higher than what my buyer client agreed to. Can I amend my buyer-representation agreement to reflect the higher amount?

NAR’s website states: “You should not amend an agreement for the sole purpose of ‘matching’ an offer of compensation that is greater than what you and your buyer agreed to. Any amendment must have a legal basis and a fully informed buyer that agrees to amend.”

NAR’s guidance also applies to amending the agreement to accept a bonus for the buyer’s broker. For example, if the buyer is switching from showing to full-services representation, the compensation amount in the buyer-representation agreement could be amended to reflect that change in services.

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