TXR Form Changes Explainer
FORMS FOR ALL TRANSACTIONS BUYER FORMS SELLER FORMS LEASE FORMS
ALL TRANSACTIONS
NEW FORM June 2024 - Amendment to Representation Agreement (TXR 2701) [Temporary form]
This form is a simple change to an agreement between a client and their real estate agent. It explains that the agent's fees are not set by any group and can be negotiated. The form also changes some details about how the agent and other agents get paid.
Amendment used with listing and buyer/tenant rep agreements to allow brokers under a current representation agreement to meet the requirements of the NAR settlement
Includes disclosures and authorizations required beginning August 17
It's a temporary form that will be pulled down when no longer needed for this purpose
IF UNDER CONTRACT: If you entered into a client-representation contract with a pre-June 24 version of a representation agreement, and that client has entered into a sales contract to purchase or sell a home prior to August 17, you do not need to update your representation agreement.
IF NOT UNDER CONTRACT: However, if you entered into an agreement with a pre-June 24 version of this form, and that client has not entered into a sales contract to purchase or sell a home prior to August 17, you either need a new agreement or you can use this amendment.
⚠️ Compensation Agreement Between Brokers (TXR 2402) ⚠️
- NOT FOR USE IN EXP REALTY TRANSACTIONS!!!! EXP DOES NOT PAY OR ACCEPT BAC %
This form is an agreement between two real estate brokers about how they will share the money earned when a property is sold or leased. It describes the property involved, how much each broker will be paid, and when they will get paid. The agreement also explains what happens if a related person to the client buys or leases the property.
Updated June 30, 2024 - Updated the name to reflect that the form deals with compensation.
Updated June 30, 2024 - Allows one broker to compensate a cooperating broker.
Updated Aug 23, 2024 - Adds a third blank line to the compensation paragraph to provide flexibility on how brokers structure their compensation arrangements. For example, this line can be used for a listing broker to agree to pay the cooperating broker a bonus.
NOTE: EXP REALTY AND OTHER BROKERAGES ARE NOT PAYING CO-OP OR BROKER-TO-BROKER COMMISSIONS.
💰 Addendum Regarding Brokers’ Fees (TXR 2406) 💰
NEW FORM June 2024 - THIS IS THE CORRECT FORM TO USE TO GET PAID BY DIRECTLY BY SELLER!!!
This form is an addendum that explains how real estate broker fees will be paid when a property is sold. It explains who is responsible for paying these fees and gives permission for the escrow agent to handle the payments at closing. The form also makes it clear that broker fees are negotiable and not set by law.
Designed to be used as an addendum to the TREC residential contracts (except the Farm and Ranch Contract) to document payment of brokers’ fees, including from a listing broker or seller to a buyer’s broker (NOTE: Add this in Paragraph 22 Other: "Addendum Regarding Brokers' Fees" to attach it to the contract)
Use this addendum if the parties have negotiated that the seller will pay any of the buyer’s broker’s fees under the sales contract. In that case, this form would need to be used to amend the contract, and Paragraph D2(b) can be checked to specify the amount and authorize that payment. Use this box only when the seller has agreed to pay all or part of the buyer’s broker’s compensation not otherwise addressed in a separate compensation agreement, as this option creates a new obligation for the seller to pay the buyer’s broker.
Remember, if a listing agent or seller is paying buyer broker compensation, and that compensation exceeds the amount the buyer and buyer’s broker previously agreed to, a buyer’s broker would need to amend the representation agreement to have the buyer authorize that the buyer broker may receive this amount to be in compliance with the updated MLS requirements.
Updated Aug 23, 2024 - Adds a paragraph specifically for intermediary broker transactions. In addition to any fees the seller is paying the listing broker in a listing agreement, the seller can agree to pay the listing broker additional fees to be applied to the buyer-side of the transaction. For example, if the seller did not agree to pay compensation to the buyer’s agent in the listing agreement (paragraph 5B), the buyer can request the seller pay an additional amount to the listing broker that will be applied to the compensation the buyer agreed to pay in their buyer representation agreement with the broker. This paragraph should only be used in an intermediary transaction. Otherwise, the parties should use Paragraph D, Other Broker’s Fees, to have the seller pay the buyer’s broker’s compensation.
Updated Aug 23, 2024 - Clarifies which paragraphs are for information purposes only and which paragraphs create new obligations for the seller to pay compensation.
Compensation Agreement Between Broker and Owner (TXR 2401)
This agreement is between a property owner and a broker, where the broker is authorized to register potential buyers or tenants for the property. It outlines the terms under which the broker will earn a fee if the property is sold or leased to a registered prospect during the agreement's term. The agreement also includes details on how the broker's fee is calculated and when it becomes payable.
The broker earns a fee if the property is sold or leased to a registered prospect during the agreement’s term.
The fee amount is negotiable and depends on whether the property is sold or leased.
The agreement includes provisions for additional fees if the lease is renewed, extended, or if the tenant later purchases the property.
Updated June 30, 2024 - Updates the name to reflect that the form deals with compensation and adds language to clarify the broker’s fee if the owner leases the property to the broker’s prospect.
Updated June 30, 2024 - Adds language stating the agreement supersedes all prior agreements between the parties.
General Information and Notice to Buyers and Sellers (TXR 1506)
This form gives important information to buyers and sellers about things to watch out for when buying or selling a property. It covers topics like property inspections, environmental issues, and legal requirements. The form also advises buyers and sellers to be aware of risks like wire fraud and the need for proper insurance.
Updated June 30, 2024 - Adds a compensation paragraph to explain compensation and provide the disclosure that broker compensation is not set by law and is fully negotiable.
Updated Aug 23, 2024 - Adds an additional disclosure regarding broker compensation.
Notice from Buyer’s Agent to Seller (TXR 1504)
This form is a notice from a buyer's real estate agent to the seller. It informs the seller that the agent is representing the buyer and that the seller should contact their own broker or attorney for advice. The form also explains that the buyer's agent cannot help the seller with things like evaluating offers or finding other service providers.
Updated Aug 23, 2024 - Adds a required disclosure regarding broker compensation.
Referral Agreement Between Brokers (TXR 2405)
This form is an agreement between two real estate brokers about sharing a referral fee when one broker refers a client to the other. It details how much and when the referring broker will be paid if the client buys, sells, or leases a property. The form also explains that the fee will be paid only if the receiving broker earns a fee from the transaction.
Updated June 30, 2024 - Adds a new paragraph to clarify the length of the agreement.
Updated June 30, 2024 - Adds a new paragraph to specify whether the agreement is for one transaction or multiple transactions.
BUYERS
Residential Buyer/Tenant Representation Agreement – Long Form (TXR 1501)
The Residential Buyer/Tenant Representation Agreement provided to Texas REALTORS® defines the relationship between a broker and buyer. It covers the exclusivity of the representation, the market area in question, the term of the relationship, each party’s obligations, and information about fees, mediation, and limitations on liability. The agreement also includes a section clarifying that the client is not already represented by another broker for the same market area and whether an employer or relocation company is providing a benefit to the client. The agreement can be changed by mutual consent using Amendment to Buyer/Tenant Representation Agreement (1505) or ended by mutual consent using Termination of Buyer/Tenant Representation Agreement (1503).
A buyer representation agreement is between a buyer and broker—not between a buyer and a sales agent. If you’re a sales agent and switch brokers, the clients who’ve signed agreements with your current broker don’t transfer to your new broker unless your current broker agrees to release the buyers from their buyer representation agreements.
Updated June 30, 2024 - Adds the required disclosure that broker compensation is not set by law and is fully negotiable as well as the limitation that the broker is prohibited from receiving compensation for brokerage services from any source that exceeds the amounts stated in the agreement.
Updated June 30, 2024 - Broker compensation is moved to the top of page 2, and the language is updated to allow for authorization of broker to receive additional compensation in compliance with MLS rules.
Updated Aug 23, 2024 - Adds a new paragraph to allow the buyer to authorize buyer’s broker to receive Other Compensation. Any compensation included in this paragraph must be objectively ascertainable, and the specific amount or rate of compensation must be known when the agreement is executed.
Updated Aug 23, 2024 - Clarifies paragraph regarding bonus payments.
NEW FORM June 2024 - Residential Buyer/Tenant Representation Agreement – Short Form (TXR 1507)
This form is an agreement where a person (the client) hires a real estate broker to help them buy or rent a property. It explains what the broker will do, how long the agreement lasts, and how the broker will be paid. The form also details the responsibilities of both the client and the broker during this time.
One-page version of the Residential Buyer/Tenant Representation Agreement – Long Form (TXR 1501) - essentially two forms in one
Used for full representation of a buyer/tenant from showing properties all the way through closing OR used to provide showing services only
Complies with recent NAR policy changes and offers flexibility for buyers/tenants who are not ready to commit to a long-term, exclusive relationship with an agent.
The duration of the agreement can be as short as one day, and the market area can be as limited as one property.
Present this with the IABS
What are "Showing Services"? - Minimum duties required under section 1101.557 of the Texas Occupations Code for license holders are:
Answer the party’s questions
present any offer to or from the party (This simply means the agent is required to give the offer to the intended party. This does not require the agent to write the offer or negotiate the terms for the buyer or seller. If the seller sends an offer to an agent, the agent cannot hold onto the offer but must forward the offer to the buyer. If a buyer has an offer to send to the seller, the agent must forward the offer to the seller. )
This requirement is intended to prevent agents from withholding information from their clients.
Keep in mind that the agency relationship exists only for the term of the agreement. If the showing services agreement is for one day or a weekend, many buyers will not provide an agent with an offer during that short period of time.
Fiduciary duty underlies every other duty of the agent. So, when an agent is determining how to answer questions or present offers, the agent should do so in a manner that puts the client’s best interests first.
Amendment to Buyer/Tenant Representation Agreement (TXR 1505)
This form is used to make changes to an existing agreement between a buyer or tenant and their real estate broker. It allows them to update details like the area they are looking in, the end date of the agreement, or the broker's fees. The form also provides options to adjust other parts of the agreement as needed.
Used by broker and client to amend the Residential Buyer/Tenant Representation Agreement
Updated June 30, 2024 - Includes a paragraph to amend the broker obligation paragraph in the Residential Buyer/Tenant Representation Agreement – Short Form (TXR 1507) and to amend broker’s fees or other compensation paragraphs in the Residential Buyer/Tenant Representation Agreement – Long Form (TXR 1501) and the Residential Buyer/Tenant Representation Agreement – Short Form (TXR 1507).
Updated Aug 23, 2024 - Clarifies amendments relating to compensation. Allows a change in broker compensation to apply to a specific property. For example, when a specific property offers more compensation than what’s agreed to in the agreement and the buyer/tenant agrees to increase broker compensation only for that specific property.
Updated Aug 23, 2024 - Clarifies paragraph regarding bonus payments.
Intermediary Relationship Notice (TXR 1409)
This form notifies both the seller (or landlord) and the buyer (or tenant) that the same real estate broker represents both of them. It explains that the broker will act as an intermediary, meaning they will help both sides in the deal but won’t favor one over the other. The form also gives the broker the option to assign different associates to help each party with communication and negotiations.
Updated Aug 23, 2024 - Adds a required disclosure regarding broker compensation.
Updated Aug 23, 2024 - Adds an explanatory notice that this form does not satisfy the written consent requirement to act as an intermediary under Texas law. This form is intended to notify the parties that broker will act as an intermediary and whether the broker will appoint associates to communicate with either party.
LISTINGS
NEW FORM June 2024 - Representation Disclosure (TXR 1417)
- AKA THE "I REPRESENT THE OTHER PARTY AND NOT YOU" FORM
This form is used to let everyone involved in a property deal know who the real estate broker is representing. It explains that the broker must tell others, either by talking or in writing, who they are working for—either the buyer, seller, tenant, or landlord. The form also emphasizes that the broker's main duty is to their client, but they must still be honest and fair to everyone involved.
May be used in two separate ways:
By a listing broker or the broker’s agent to disclose to a consumer that the listing broker represents the seller of the residential property to be shown.
By a broker or the broker’s agent to inform another party to a transaction—or another license holder who represents another party to a transaction—who the broker represents.
Updated Aug 23, 2024 - Adds a required disclosure regarding broker compensation.
Residential Real Estate Listing Agreement, Exclusive Right to Sell (TXR 1101)
Residential Real Estate Listing Agreement, Exclusive Right to Lease (TXR 1102)
Farm and Ranch Real Estate Listing Agreement, Exclusive Right to Sell (TXR 1201)
Residential Real Estate Listing Agreement, Exclusive Right to Lease (TXR 1102)
Farm and Ranch Real Estate Listing Agreement, Exclusive Right to Sell (TXR 1201)
PREVIEW 1101 FORM PREVIEW 1102 FORM PREVIEW 1201 FORM
This form is an agreement between a homeowner (the seller) and a real estate broker, giving the broker the exclusive right to sell the property. It outlines the responsibilities of both the seller and the broker, including how the property will be marketed, the broker's fees, and the terms under which the property will be sold. The agreement also includes important details about the property, the selling price, and any special conditions or exclusions.
Updated June 30, 2024 - Adds required disclosure that broker compensation is not set by law and is fully negotiable.
Updated June 30, 2024 - Removes a reference to broker fees in relation to MLS participation.
Updated June 30, 2024 - Allows the seller to authorize if and how the seller or listing broker will compensate a buyer’s broker.
Updated Aug 23, 2024 - Clarifies in Paragraph 5A(1) that payment of listing broker compensation will be reduced in transactions in which the listing broker does not pay all fees authorized by the seller to a buyer’s agent. This only applies if there is another broker that procures the buyer. If the listing broker does not pay the other broker the amounts stated in 5A(2), the seller gets the benefit of that lower amount, and these total compensation is reduced.
Updated Aug 23, 2024 - Clarifies in Paragraph 5A(2) that the seller authorizes and listing broker will pay amounts specified to another broker who procures a Buyer.
Updated Aug 23, 2024 - Adds a new Paragraph 5A(3) that the seller authorizes the listing broker to publicly disclose compensation for the other broker as specified in 5A(2). This authorizes the listing broker to advertise compensation being paid by the listing broker. There is no checkbox. The listing broker automatically gets this authorization when using Paragraph 5A for compensation.
Updated Aug 23, 2024 - Adds a new Paragraph 5A(4) to clarify that the listing broker keeps all amounts received from the seller specified in Paragraph 5A(1) in transactions in which the listing broker acts as intermediary or in transactions in which the buyer is unrepresented. This applies if there is no other broker that procures the buyer. Without a buyer’s agent helping with the transaction, the listing broker has more work to do and should retain the entire compensation.
Updated Aug 23, 2024 - Moves seller authorization for listing broker to disclose that the seller will consider contributions toward the buyer’s expense to the Note directly following Paragraph 5B. The authorization previously located in Paragraph 11F has been removed and replaced with this paragraph. This authorization is for the broker to disclose potential concessions paid by the seller. Note: This paragraph is not used for compensation paid by the listing broker.
Seller’s Authorization to Disclose and Advertise Certain Information (TXR 1412) [updated name]
This form gives the seller's permission to their real estate broker to share specific information about the property with potential buyers and other brokers. It allows the broker to disclose that the seller might help pay some of the buyer’s expenses and to advertise additional details about the property, like special terms or reasons for selling. The seller has the final say on how much they will contribute and what information the broker can share.
Updated June 30, 2024 - Designed to be used as written authorization from the seller that the agent may disclose and/or advertise certain information. For example, the seller can include a specific dollar amount that the seller would consider contributing towards the buyer’s expenses that can be advertised to buyers and their agents on an MLS and elsewhere.
NEW FORM June 2024 - Named Exclusions Addendum to Listing (TXR 1402)
This form is an addendum to a listing agreement that allows a property owner to exclude certain named individuals from the agreement. This means the owner can sell or lease the property to these individuals without having to pay the broker's full fees. The addendum outlines specific conditions under which these exclusions apply.
The owner must sell or lease to the named individuals within a set time to avoid paying the broker’s full fees.
If a named individual makes an offer through another broker, the exclusion no longer applies, and the owner must pay the broker's fees.
The owner is required to inform the broker immediately if they receive or accept an offer from a named exclusion.
Exclusive Agency Addendum to Listing (TXR 1403)
This form is an addendum to a listing agreement that allows the property owner to sell or lease their property to a specific buyer or tenant they find on their own without having to pay the full broker’s fees. The owner must notify the broker about these "Excluded Prospects" in writing, and the broker or any other broker should not have shown the property to these prospects beforehand. If the property is sold or leased to one of these excluded prospects, the broker's involvement ends, and they may receive a reduced fee or no fee at all.
Updated June 30, 2024 - Reflects changes to Residential Real Estate Listing Agreement, Exclusive Right to Sell (TXR 1101) and clarifies signatures.
Amendment to Listing (TXR 1404)
This form is used to make changes to an existing real estate listing agreement between a property owner and their broker. It allows them to update key details like the listing price, the end date of the listing, or the broker’s fee. The form ensures that the listing remains in effect, even with these amendments, unless stated otherwise.
Updated June 30, 2024 - Adds required disclosure that broker compensation is not set by law and is fully negotiable.
Updated June 30, 2024 - Provides specific provisions to amend the broker’s fees paragraphs in Residential Real Estate Listing Agreement, Exclusive Right to Sell (TXR 1101) and Farm and Ranch Real Estate Listing Agreement, Exclusive Right to Sell (TXR 1201).
LEASES
Don’t Overlook These Forms Changes to Leases
Of the forms revised or created to comply with new rules from the NAR compensation lawsuit settlement, several are commonly used in leasing transactions and property management. See the article on page 18 for more information about the following forms:
Revised forms
Residential Real Estate Listing Agreement, Exclusive Right to Lease (TXR 1102)
Residential Buyer/Tenant Representation Agreement – Long Form (TXR 1501)
Residential Leasing and Property Management Agreement (TXR 2201)
Compensation Agreement Between Broker and Owner (updated name) (TXR 2401)
Compensation Agreement Between Brokers (updated name) (TXR 2402)
Referral Agreement Between Brokers (TXR 2405)
New form
Residential Buyer/Tenant Representation Agreement – Short Form (TXR 1507)