Agency

In Texas, agency relationships are governed by the Texas Real Estate License Act (TRELA) and common law rules. An agency relationship is fiduciary in nature, meaning the agent owes the client strict duties of loyalty, obedience, confidentiality, and accounting.

Texas-Specific Nuance & Citation

Under TRELA §1101.558, license holders must provide the Information About Brokerage Services (IABS) form at the first substantive dialogue regarding a real estate transaction. This is the statutory disclosure that explains how agency representation works in Texas.

The Trap

Candidates often mistake subagency for representing the buyer. In a subagency transaction, the agent showing the home actually represents the seller. Any confidential information the buyer shares about their budget or motivations must be disclosed to the seller.

Worked Example

A buyer enters an open house hosted by an agent from another firm. If no representation agreement is signed and the buyer tells the agent, “I love this house and will pay full price,” the agent—acting as a subagent of the seller—is legally obligated to convey this pricing detail to the listing broker and seller.