Listing and Buyer-Rep Agreements for the Texas Exam

Listing and buyer-representation agreements are how agency actually starts, so they sit at the center of the Contracts and Agency area. This spoke builds on the agency relationships and types spoke and is part of the Contracts and Agency area.

Texas has real, tested rules here, including a new 2026 buyer-representation requirement. Learn the four listing types, the Texas limits, and the SB 1968 change, and you own this topic. Let us build it.

What is a listing agreement?

Snippet answer: A listing agreement is the written contract that creates the agency relationship between a seller and a broker. It authorizes the broker to market the property and represent the seller, and it sets the commission and the term. It is an employment contract for the broker's services. In Texas the listing must have a definite termination date and state a negotiable commission.

A listing agreement is the contract a seller signs to hire a broker. It creates the agency relationship, gives the broker authority to market and represent the seller, and states the commission the broker earns if it succeeds. In effect, it is an employment contract for real estate services.

Because it creates agency, the listing triggers the broker's fiduciary duties covered in the fiduciary duties spoke. It also must meet Texas requirements: a definite termination date and a commission that is negotiable, not fixed. The type of listing then decides when the broker gets paid.

The four types of listing agreement

Snippet answer: There are four listing types, differing in when the broker earns a commission. Under an exclusive right to sell, the broker is paid no matter who finds the buyer, even the seller. Under an exclusive agency, the broker is paid unless the seller personally finds the buyer. An open listing pays only the broker who produces the buyer, and the seller may use several brokers. A net listing lets the broker keep any amount above the seller's set net price.

The four types differ in one thing: who has to find the buyer for the broker to get paid.

The exclusive right to sell is the most common and the most protective for the broker, because the broker earns a commission however the buyer is found. Exclusive agency carves out one exception: if the seller finds the buyer without any broker, no commission is owed. An open listing is non-exclusive, so a seller can give it to several brokers, and only the one who actually procures the buyer is paid. The net listing is the odd one out, and Texas treats it carefully.

Net listings in Texas

Snippet answer: A net listing is one where the seller names the net amount they want, and the broker keeps anything above it as the commission. It creates a conflict of interest because the broker profits by getting a high price over the net, or by underpricing to sell fast. Net listings are legal in Texas but restricted. TREC permits them only when the seller requires it and is familiar with market values, and the broker must always give the seller an opinion of market value.

The net listing is the type the exam flags, because it invites a conflict of interest. In a net listing, the seller states the amount they want to net, and the broker keeps everything the sale brings above that figure. The broker's incentive can drift away from the seller's best interest.

Texas does not ban net listings, but it restricts them. TREC permits a net listing only when the seller requires that arrangement and appears familiar with current market values. And in any listing, net or not, the license holder must advise the seller of the license holder's opinion of the property's market value. That duty is what keeps a net listing from becoming a way to take advantage of an uninformed seller. On the exam, connect the net listing to the fiduciary duty of loyalty.

The definite termination date rule

Snippet answer: In Texas, every listing and representation agreement, except a property management agreement, must include a definite termination date that is not subject to prior notice by either party. A broker may be disciplined for a listing with no set end date or one that renews automatically. This bans open-ended or evergreen agreements and protects the seller from being locked in indefinitely.

This is a heavily tested Texas rule. Under TRELA, a license holder must not enter into a representation agreement that fails to include a definite termination date not subject to prior notice by either party. Property management agreements are the exception. In plain terms, the agreement has to say exactly when it ends.

Two consequences follow. A listing cannot be open-ended with no end date, and it cannot automatically renew, sometimes called an evergreen clause. Both would trap the seller. A broker who uses a listing without a definite termination date can face TREC discipline under the Occupations Code. So if an exam answer describes a listing that renews automatically or never ends, it describes a violation.

Buyer representation and SB 1968

Snippet answer: A buyer representation agreement creates agency between a buyer and a broker. As of January 1, 2026, Texas Senate Bill 1968 requires a written buyer representation agreement before a license holder shows residential property to a prospective buyer, or before presenting an offer if no property is shown. The agreement must state specific compensation, a termination date, and whether it is exclusive, and it must disclose that compensation is negotiable.

The buyer side changed significantly in Texas. A buyer representation agreement is the buyer's version of a listing: it creates agency between the buyer and the broker and sets the terms of representation.

Senate Bill 1968, effective January 1, 2026, added Occupations Code Section 1101.563 and made a written buyer agreement mandatory. A license holder must have a written buyer representation agreement before showing any residential property to a prospective buyer. If no property is shown, it is required before presenting an offer on the buyer's behalf. Each agreement must state specific compensation terms, not a placeholder, a termination date, and whether it is exclusive or non-exclusive. It must also carry a conspicuous disclosure that broker compensation is not set by law and is fully negotiable. There is a narrow path to show property without representation, using a written non-representation agreement limited to 14 days with no advice, opinions, or negotiation. Failing to use the required written agreement is now grounds for TREC discipline. This aligns Texas with the direction of the NAR settlement on buyer agreements.

Commission is negotiable

Snippet answer: Commission is always negotiable and is never set by law, a board, or custom. Both listing and buyer agreements must reflect a negotiated rate, and under SB 1968 a Texas buyer agreement must conspicuously disclose that compensation is not set by law and is fully negotiable. Coordinating commission rates with competitors is illegal price-fixing under antitrust law.

One rule runs through every agreement: the commission is negotiable. There is no legal, standard, or customary rate a broker may present as fixed. The rate is set between the broker and the client in the agreement, and Texas now requires a buyer agreement to say so in a conspicuous disclosure.

This connects to two other topics. It ties to the enforcing compensation agreements rules on when a broker can actually collect, and to antitrust, since competing brokers may never agree on commission rates. Treat any suggestion of a standard rate as a red flag.

How to study these agreements for the exam

Snippet answer: Study the four listing types by who must find the buyer for the broker to be paid, with the exclusive right to sell as the most protective. Learn the Texas rules: net listings are restricted, every agreement needs a definite termination date, and as of January 1, 2026, buyer representation must be in writing under SB 1968. Remember commission is always negotiable.

Anchor the four listing types first, since the exam tests them by scenario. Ask who has to procure the buyer. Then layer the Texas rules on top: the net-listing limits, the definite-termination-date requirement, and the new SB 1968 written buyer-rep rule.

Keep this spoke tied to its neighbors. The agency relationships and types spoke explains the relationship these agreements create, the fiduciary duties spoke explains the loyalty a net listing can strain, and the Contracts and Agency hub ties the area together.

Frequently asked questions

What is the difference between an exclusive right to sell and an exclusive agency listing? Under an exclusive right to sell, the broker earns a commission no matter who finds the buyer, including the seller. Under an exclusive agency, the broker earns a commission unless the seller personally finds the buyer without any broker, in which case no commission is owed. The exclusive right to sell is more protective for the broker.

Are net listings legal in Texas? Yes, but they are restricted. TREC permits a net listing only when the seller requires that arrangement and appears familiar with current market values. In any listing, the license holder must give the seller an opinion of the property's market value. These limits exist because a net listing can create a conflict with the broker's fiduciary duty of loyalty.

Does a Texas listing agreement need an end date? Yes. TRELA requires every listing or representation agreement, except a property management agreement, to include a definite termination date not subject to prior notice by either party. A listing that never ends or automatically renews violates the rule, and a broker can face TREC discipline for using one.

What does SB 1968 require for buyer representation? Effective January 1, 2026, a license holder must have a written buyer representation agreement before showing residential property to a prospective buyer, or before presenting an offer if no property is shown. The agreement must state specific compensation, a termination date, and exclusive or non-exclusive status, and disclose that compensation is negotiable. Failing to use it is grounds for TREC discipline.

Practice questions

1. Under which listing type does the broker earn a commission no matter who finds the buyer, including the seller? A. Open listing B. Exclusive agency C. Exclusive right to sell D. Net listing

Answer: C. The exclusive right to sell pays the broker regardless of who produces the buyer, even the seller. An open listing pays only the broker who procures the buyer (A), exclusive agency excludes a sale the seller makes alone (B), and a net listing is defined by price, not who finds the buyer (D).

2. A Texas listing agreement states that it will automatically renew every 90 days until the seller cancels. What is the problem? A. Nothing, automatic renewal is allowed B. It lacks a definite termination date, which violates TRELA C. It must be an open listing D. The commission must be fixed

Answer: B. TRELA requires a definite termination date not subject to prior notice, so an automatically renewing listing violates the rule and can bring TREC discipline. Automatic renewal is not allowed (A), the listing type is unrelated to the defect (C), and commission is negotiable, not fixed (D).

3. As of January 1, 2026, before a Texas license holder shows residential property to a prospective buyer, the license holder generally must have: A. Nothing in writing B. A written buyer representation agreement under SB 1968 C. Only a verbal understanding D. The seller's permission alone

Answer: B. SB 1968 requires a written buyer representation agreement before showing residential property, effective January 1, 2026. A verbal understanding or nothing in writing does not satisfy it (A and C), and the seller's permission is a separate issue (D).

4. A broker takes a net listing and keeps the entire amount above the seller's net figure without ever telling the seller the property's market value. This most directly risks: A. No issue, net listings have no special rules B. A breach of the fiduciary duty of loyalty and Texas net-listing limits C. A price-fixing violation D. An unenforceable statute of frauds problem

Answer: B. Texas permits net listings only in narrow circumstances, and the license holder must give the seller an opinion of market value. Keeping a large spread while withholding value information risks breaching loyalty and the net-listing limits. It is not free of rules (A), not price-fixing (C), and not a statute-of-frauds issue (D).

Sources and methodology

This guide was written from primary Texas sources and reverified on July 21, 2026. Texas agency-agreement law changed recently, so confirm the current rule text before relying on a detail.

• The four listing types and how each determines when a commission is earned come from general real estate agency practice as applied in Texas.
• The Texas net-listing limits, requiring that the seller require the arrangement and be familiar with market values, and the duty to give an opinion of market value, come from TREC guidance and the Texas Occupations Code.
• The definite-termination-date requirement for representation agreements comes from the Texas Occupations Code, Chapter 1101 (TRELA), Section 1101.652.
• The written buyer representation requirement, its content requirements, the limited non-representation showing path, and the discipline for noncompliance come from Senate Bill 1968 and the Texas Occupations Code, Sections 1101.562 and 1101.563, effective January 1, 2026.

Verify all agreement rules against the current Texas statutes and TREC guidance before you rely on them in practice.

Official source links

• Texas Occupations Code Chapter 1101 (TRELA)
• TREC, What SB 1968 Means for Brokers
• TREC, Net Listing Agreement and Fiduciary Duty
• TREC, Listing Agreements FAQ

This article is exam-prep education for the Texas real estate sales agent license. It is not legal advice, and it does not create an agency relationship. Listing and buyer-representation rules changed recently and depend on current law and the specific agreement. Always confirm the current Texas statutes, SB 1968, and TREC guidance and work under the supervision of your sponsoring broker before acting.