Intermediary Relationship
In Texas real estate, an intermediary relationship occurs when a broker represents both the buyer and the seller in the same real estate transaction. This type of relationship is allowed under Texas law but is subject to strict guidelines to ensure that the broker acts fairly and does not favor one party over the other.
Key Elements of an Intermediary Relationship:
Broker’s Role:
The broker acts as a neutral intermediary, facilitating the transaction without giving preferential treatment to either party. The broker cannot provide advice or opinions that favor one side, but they can present offers and handle communications between the buyer and seller.
Written Consent:
Both the buyer and seller must give written consent to the intermediary relationship. This is typically done through a listing agreement with the seller and a buyer representation agreement with the buyer.
Appointment of Agents (Optional):
The broker may choose to appoint separate agents (sales agents) to represent the buyer and seller within the same brokerage. This is known as an intermediary with appointments.
The appointed agents can provide advice and opinions to their respective clients.
The broker, however, must remain neutral.
Intermediary Without Appointments:
If the broker does not appoint separate agents, they act as an intermediary without appointments. In this case, the broker must remain completely impartial and cannot give advice to either the buyer or the seller.
Example of an Intermediary Relationship:
Scenario:
A buyer contacts ABC Realty to purchase a home listed by the same brokerage.Intermediary with appointments: The broker appoints Agent A to represent the seller and Agent B to represent the buyer.
Intermediary without appointments: The broker acts as a neutral party, simply facilitating the transaction without giving advice.
Legal Requirements:
Texas law governing intermediary relationships is outlined in Section 1101.559 of the Texas Real Estate License Act (TRELA). It requires:
* Written consent from both parties.
* Clear disclosure of the broker’s role as an intermediary.
* Prohibition on disclosing confidential information unless required by law.
In summary, an intermediary relationship in Texas real estate allows a broker to represent both the buyer and seller, provided both parties agree in writing, and the broker follows specific guidelines to ensure impartiality.
