Compensation Agreement Between Brokers (TXR 2402) – Texas REALTORS®-2021十大正规彩票app

When should the listing broker and buyer’s broker sign the Compensation Agreement Between Brokers (TXR 2402)?

TXR 2402 should be negotiated and executed by the listing broker and buyer’s broker before the offer from the buyer is presented. Whether the listing broker will compensate the buyer’s broker will have a significant impact on the terms of the offer the buyer may want to present to the seller. For example, if the listing broker will not pay the buyer’s broker at all or not enough to cover the broker’s fee in the buyer’s representation agreement, the buyer may want to submit an offer requesting the seller compensate the buyer’s broker. Therefore, the brokers should determine what, if any, compensation the listing broker will pay to the buyer’s broker before the buyer presents the offer to the seller.

Important note regarding ethical duties. REALTORS® cannot refuse to present an offer from their buyer client to force the listing broker to offer compensation or pay any specific amount of compensation (Article 16, Standard of Practice 16-16 of the NAR Code of Ethics). After a buyer’s agent negotiates possible compensation with the listing broker, the buyer’s agent must inform the agent’s client about the results of such negotiation, whether the listing broker agreed to compensation or not. REALTORS® must then discuss with their buyer whether their client wishes to submit an offer and if so, what terms regarding compensation should be included with that offer.

What should we include as the term in the Compensation Agreement Between Broker and Owner (TXR 2401) and Compensation Agreement Between Brokers (TXR 2402)?

The date of the term should provide enough time for the parties to negotiate and sign the sale or lease agreement. For compensation to be earned under the compensation agreements (TXR 2401 and TXR 2402), the owner of the property must enter into a binding agreement to sell or lease the property during the term. The parties to the compensation agreement can agree to extend the term if additional time is needed for negotiations. Note: If the sales contract was executed during the term, the compensation is still payable even if the sale closes after the term has expired.

A broker includes offers of compensation on his brokerage website for his listings. If my buyer submits an offer on a property with compensation from the broker listed on the website, do we still need to sign a compensation agreement?

Yes. You can use the Compensation Agreement Between Brokers (TXR 2402). Compensation listed on a broker’s website does not create a binding obligation to pay the buyer’s broker. The brokers must still sign an agreement to create a binding contract for compensation. If the listing broker has agreed to compensate a buyer’s broker that procures a buyer in his listing agreement with a seller, the listing broker should execute a compensation agreement for the amount that was agreed to in the listing agreement.

What forms can be used if the listing broker and seller will both pay a portion of the buyer’s broker compensation?

You would use the Compensation Agreement Between Brokers (TXR 2402) and the Addendum Regarding Broker’s Fees (TXR 2406). The Compensation Agreement Between Brokers (TXR 2402) is used to pay the portion of the buyer’s broker’s compensation coming from the listing broker. The buyer would then attach the Addendum Regarding Broker’s Fees (TXR 2406) to the sales contract for the seller to pay additional compensation towards the buyer’s broker fees.

Legal Disclaimer

Texas REALTORS® provides content through various online platforms, including this blog. By interacting with any of our blog posts, you agree to comply with the following terms and conditions:

a. You will not post any defamatory, discriminatory, libelous, threatening, vulgar, sexually explicit, abusive, profane, rude, or obscene content (including comments);
b. You will not use our blog posts or posted content to do anything unlawful, misleading, malicious, or discriminatory; and
c. You will not post content or take any action on our blog posts that infringes someone else’s rights or otherwise violates the law.
d. You will not post any information intended to sell or advertise a business, product, or service.

Texas REALTORS®, in its sole discretion, reserves the right to remove any content you have uploaded, posted, or submitted onto any of our blog posts if we believe that it violates these terms or conditions.

The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While Texas REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, Texas REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here. Any legal or other information found on this page or at other sites to which we link, should be verified before it is relied upon.