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.

From the One to Four Family Residential Contract (Resale) (TREC No. 20-13):

Paragraph 18: 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.

Paragraph 11. BROKER’S FEES:

A. Commission: The parties agree that Broker will receive a commission calculated as follows: (1) ______%
of the gross sales price if Client agrees to purchase property in the market area; and (2) if Client agrees
to lease property in the market a fee equal to (check only one box): ‰ _______% of one month’s rent or
‰ _______% of all rents to be paid over the term of the lease.
B. Source of Commission Payment: Broker will seek to obtain payment of the commission specified in
Paragraph 11A 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.

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.