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?

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

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

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 by 22 TAC Section 535.16(b), which imposes four requirements, not two.

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.

What 22 TAC 535.16(b) restricts

Texas does not ban net listings. 22 TAC Section 535.16(b) restricts them, and all four of its requirements are testable:

• The principal must require the net listing. A broker may not propose one.
• The principal must appear familiar with current market values of real property.
• The agreement must assure the principal of not less than the principal's desired price.
• The agreement must limit the broker to a specified maximum commission.

The last two are the ones study guides drop, and they are the ones that actually cap the conflict. Without a stated ceiling on the broker's commission, the arrangement is exactly what the rule says a net listing does: it "places an upper limit on the principal's expectancy and places the broker's interest above the principal's interest with reference to obtaining the best possible price."

The broker price opinion requirement

Separately, Section 535.16(c) obligates a license holder to provide a broker price opinion or comparative market analysis when negotiating any listing, and again when offering to buy a property for their own account after contact made as an agent. That duty is not specific to net listings, though it is what keeps one 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

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. The rule is TRELA Section 1101.652(b)(12), which makes it a ground for suspension or revocation to fail to specify such a date in a contract for services requiring a license. The property management carve-out is written into the provision itself. 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 or use an evergreen clause that keeps renewing until a party gives notice, because neither supplies a final definite termination date that is independent of notice. A broker who uses a representation agreement without the required definite date can face TREC discipline. This does not mean parties can never sign an extension; whether a particular extension works depends on the agreement and applicable law. On the exam, focus on the defective clause that has no final end date.

Buyer representation and SB 1968

A buyer representation agreement creates agency between a buyer and a broker. As of January 1, 2026, Senate Bill 1968 generally requires a written agreement before a Texas license holder shows covered residential property to a prospective buyer, or before presenting an offer if no property was shown. The writing may be a representation agreement or a limited nonrepresentation agreement. It must identify the services, termination, exclusivity and representation status, state objectively ascertainable compensation terms, and conspicuously disclose that broker compensation is not set by law and 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.

What SB 1968 added

Senate Bill 1968, effective January 1, 2026, added Occupations Code Sections 1101.562 and 1101.563. A license holder must generally have the required written agreement before showing a prospective buyer covered residential property. If no property is shown, the agreement is due before the license holder presents an offer for the buyer.

The law provides two paths:

• Representation. The written agreement creates a broker-client relationship and describes the brokerage services.
• Nonrepresentation for showing. A written, nonexclusive agreement may last no more than 14 days. It must state that the license holder does not represent the buyer and may not provide opinions, advice, or other brokerage services. The license holder may confirm property-specific facts such as size, price, or terms. More brokerage service requires a separate representation agreement.

What the required writing must say

The required writing must describe the services, state how and when it terminates, say whether it is exclusive and whether the license holder represents the buyer, and state the broker's compensation as an objectively ascertainable amount or rate with how it will be determined. It must also conspicuously disclose that broker compensation is not set by law and is negotiable. Failing to obtain the applicable written agreement can support TREC discipline.

The open-house nuance

There is also an open-house nuance. A listing-brokerage license holder hosting that brokerage's open house does not need this buyer-side written agreement merely to let a visitor tour, but must disclose representation of the seller. A license holder outside the listing brokerage who hosts the open house remains subject to the written-agreement rule. This Texas change overlaps with, but is legally distinct from, the NAR settlement.

Commission is negotiable

Commission is negotiable and is not set by law. Listing agreements reflect the broker's negotiated compensation, and an SB 1968 buyer-side written agreement must conspicuously disclose that broker compensation is not set by law and is negotiable. Coordinating commission rates with competitors is illegal price-fixing under antitrust law.

One rule runs through these agreements: compensation is negotiable. There is no lawful fixed rate a broker may attribute to statute, a trade association, or coordinated industry action. The parties state the applicable terms in the agreement, and Texas now requires the buyer-side writing to carry a conspicuous negotiability 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

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, representation agreements need a definite termination date, and as of January 1, 2026, SB 1968 generally requires a written agreement before a buyer is shown covered residential property. Remember the two paths: representation or a short, limited nonrepresentation agreement.

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-agreement 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 a 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 renews forever until the seller gives notice, lacks the required final date. The parties may be able to agree to an extension that itself preserves a definite termination date; the specific agreement controls.

What does SB 1968 require for buyer representation? Effective January 1, 2026, a license holder generally must have a written agreement before showing covered residential property to a prospective buyer, or before presenting an offer if no property was shown. It can be a representation agreement or a nonexclusive, nonrepresentational showing agreement lasting no more than 14 days. The latter permits limited factual confirmation but no advice, opinions, or other brokerage services. The writing must cover services, termination, exclusivity and representation status, objectively ascertainable compensation, and compensation negotiability.

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. A clause that renews indefinitely until the seller gives notice has no final definite termination date independent of notice, so it conflicts with TRELA and can support discipline. The listing type is unrelated to the defect (C), and compensation is negotiable, not fixed (D). This question tests an evergreen clause, not a separately agreed extension that states a new definite end date.

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 representation agreement or a qualifying limited nonrepresentation agreement under SB 1968 C. Only a verbal understanding D. The seller's permission alone

Answer: B. SB 1968 generally requires a written agreement before showing covered residential property, effective January 1, 2026. The agreement may create representation or may be the statute's limited nonrepresentation showing agreement. 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 August 12, 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-side agreement requirement, its content requirements, the representation and limited nonrepresentation paths, the open-house treatment, and discipline for noncompliance come from Senate Bill 1968, Texas Occupations Code Sections 1101.562 and 1101.563, and current TREC implementation guidance, 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)
• Texas Legislature, enrolled SB 1968
• TREC, What SB 1968 Means for Brokers
• TREC Rule 535.16, including net listings
• TREC, Frequently Asked Questions

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.