Does the law require a broker to have a written representation agreement to act as someone’s agent?

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  • Does the law require a broker to have a written representation agreement to act as someone’s agent?

No. A relationship between a broker and a client can legally exist without a written document. However, there are four good reasons why a broker-client relationship should be in writing, whether it’s with a buyer, seller, landlord, or tenant:

1. A broker cannot sue for a commission unless there is a written agreement signed by the party agreeing to pay that commission.

2. If office policy permits a broker to act as an intermediary (the broker has a broker-client relationship with both the seller and the buyer in the same transaction), then the broker must obtain the written consent of each party and it must state who will pay the broker. The Texas REALTORS® buyer’s representation agreements and listing agreements include the necessary written consents and other statutory requirements for a broker to act as an intermediary.

3. Written agreements between a broker and his client help ensure that all parties have mutually agreed on the terms of representation.

4. Article 9 of the Code of Ethics requires that REALTORS®, for the protection of all parties, assure whenever possible that all agreements related to real estate transactions are in writing.

Source: TAR

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