What is an Intermediary Relationship in Texas?

The Intermediary Relationship is the only legal way a broker can represent both the buyer and the seller in a single transaction in Texas. It is a strictly structured statutory framework that completely replaces common-law Dual Agency (which is illegal in Texas).

Why the Correct Option is Right

Option B is correct because the intermediary relationship is defined by statute (TRELA) as a neutral role. The broker facilitates the transaction and cannot advocate for one party over the other unless they utilize “Appointments.” Sponsoring agents are appointed to represent each client individually, allowing them to provide opinions and advice.

Why the Other Options are Traps

• Option A is a trap because “Dual Agency” is illegal under Texas license law. An agent cannot represent both sides with full loyalty because a conflict of interest is inherent.
• Option C is a trap because a written agreement is always required to establish an intermediary relationship, and verbal agreements are non-binding.
• Option D is a trap because subagency describes representing a seller through another firm, which is a different agency category.

The Exam Trap

A common test question revolves around who can make appointments. Sponsoring brokers only can make appointments. A sales agent never has the authority to appoint themselves or others to represent clients. Furthermore, the broker can never appoint themselves to represent one side; they must remain a completely neutral supervisor.

Worked Texas Example

Scenario: Sales Agent Kim represents the buyer, and Sales Agent Dave represents the seller, both sponsored by Broker Bob. The buyer wants to buy the seller’s home. Outcome: Broker Bob can act as an Intermediary with Appointments. Bob appoints Kim to represent the buyer and Dave to represent the seller. Kim and Dave can now give active advice and negotiate for their respective clients, while Bob remains impartial.