Broker (REALTOR®) commissions are Negotiable. There is No Standard Commission.

Real estate agents are agents for, and are sponsored by, the Brokers. The Broker is the agent for (represents) the buyer or seller in a real estate transaction. The Texas Occupations Code defines these relationships and responsibilities. The Broker “owns” the listings and can assign or re-assign the listings and/or representation to any sponsored sales agent. Commission negotiations should only occur with the sponsoring broker’s knowledge and consent..

So, who pays the broker’s commission? The seller negotiates with the sales agent and and arrives at terms that both can agree to. In traditional home sales, the seller pays the sales commission to the Listing Broker and the Listing Broker splits the commission with the Selling Broker and both Brokers pay their REALTORS® a portion of the commission. In a standard transaction, the buyer doesn’t pay any commission, unless agreed to, by both parties, in advance, for special circumstances, in the Residential Buyer/Tenant Representation Agreement.

Broker’s fees and the sharing of fees between brokers are not fixed, controlled, recommended,
suggested, or maintained by the Association of REALTORS® or any listing service.

Buyers might pay the agent’s commission when purchasing a house at auction or from a seller, that is not an agent, and is selling their house themselves, and not using a REALTOR®, or if the seller refuse or fail to pay the fee that you have agreed to. This is stipulated in paragraph 11 of the Residential Buyer/Tenant Representation Agreement.

7. BROKER COMPENSATION:

Broker compensation or the sharing of compensation between brokers is not set by law nor fixed,
controlled, recommended, or suggested, by the Association of REALTORS®, MLS, or any listing
service. Broker compensation is fully negotiable. Brokers independently determine their fees.
Broker is prohibited from receiving compensation for brokerage services from any source that
exceeds the amounts stated in this agreement.

A. Broker’s Fee: When Earned and Payable, Client will pay Broker (Complete all that apply):
(1) (Purchases) % of the sales price or a flat fee of $ .
(2) (Leases) % of one month’s rent or % of all rents to be paid over the term of
the lease or a flat fee of $ .
B. Source of Compensation: Broker will seek to obtain payment of the fees specified in Paragraph 7A
first from the seller, landlord, or their agents. If such persons refuse or fail to pay Broker the
amount specified, Client will pay Broker the amount specified less any amounts Broker receives
from such persons.
C. Earned and Payable: Broker’s compensation is Earned when: (1) Client enters into a contract to buy
or lease property in the market area; or (2) Client breaches this agreement. Broker’s compensation is
Payable, either during the term of this agreement or after it ends, upon the earlier of: (1) the closing of
the transaction to acquire the property; (2) Client’s breach of a contract to buy or lease a property in the
market area; or (3) Client’s breach of this agreement. If Client acquires more than one property under
this agreement, Broker’s compensation for each property acquired are Earned as each property is
acquired and are Payable at the closing of each acquisition.
D. Acquisition of Broker’s Listing (Intermediary Transactions): If Client acquires a property listed by
Broker, any compensation Broker offers to other brokers in Broker’s listing agreement with the owner
will be credited towards Broker’s Fee specified under Paragraph 7A.
E. Additional Compensation: In addition to Broker’s Fee specified under Paragraph 7A, Broker is entitled
to the following compensation.
(1) Construction: If Client uses Broker’s services to procure or negotiate the construction of
improvements to property that Client owns or may acquire, Client ensures that Broker will receive
from Client or the contractor(s) at the time the construction is substantially complete a fee equal
to: .
(2) Service Providers: If Broker refers Client or any party to a transaction contemplated by
this agreement to a service provider (for example, mover, cable company, telecommunications
provider, utility, or contractor) Broker may receive a fee from the service provider for the referral.
(3) Other Compensation (Only insert amounts or rates of compensation that are objectively
ascertainable and the specific amount or rate is known at the time of execution. Do not insert
bonuses, a range of compensation, or terms such as “TBD”.):
.
Notice Regarding Bonuses. In addition to Broker’s Fee specified under Paragraph 7A, seller, landlord,
or their agent may offer to pay Broker a bonus if Client purchases or leases certain properties. Broker
will disclose the specific amount of any bonus offered to Broker. Broker may not receive any bonus unless
authorized by Client in writing. Client authorization may be made by amending this agreement (use TXR
1505).

Before Signing the Agreement, Read it Carefully!
If there is anything that you don’t understand about the agreement, contact your Real Estate Attorney, before signing.

Why sign the agreement in the first place?

REALTORS® have a code of ethics.

REALTORS® earn their commission.

When you Hire a REALTOR®, He or She Works for You. If fact, the Broker and Brokerage work for you too. Your are the Boss!

What should you expect from your REALTOR® ?
Obedience (to You), Loyalty (to You), Disclosure (of Everything), Confidentiality (for Ever, Even After the Contract Closes), Accounting (for All Funds Paid to Anyone, for Anything), Responsible Care (of You, Your Needs, and Your Concerns).

Watch this HAR video for more information.