SB 1968: Texas's New Written Buyer Agreement Rule

SB 1968 is the agency-law change most likely to show up as a new exam topic and the one candidates most often get half right. The trick is that it is a written-agreement rule, not strictly a buyer-representation rule, and it is tied to residential purchases. Here is who it covers, when the agreement is required, and the traps to avoid.

What does SB 1968 require?

Snippet answer: SB 1968 requires a license holder who performs any act of real estate brokerage for a prospective buyer of residential real property to enter a written agreement with that buyer before showing a property, or before making an offer to purchase if no property will be shown. It took effect January 1, 2026.

The rule sits in the Texas Real Estate License Act and applies to license holders working with buyers. Three pieces define it:

• Who: a prospective buyer of residential real property.
• When: before you show a property, or before you make an offer for the buyer if no showing happens.
• What: a written agreement that spells out the relationship, including whether you represent the buyer.

The point of the law is to put the buyer relationship in writing up front, so the consumer knows whether the agent represents them and how compensation works.

When is the written agreement required?

Snippet answer: Before showing residential property to a prospective buyer, or, if no property will be shown, before making an offer to purchase on the buyer's behalf. The trigger is the brokerage activity, not the closing.

The timing is the part candidates miss. The agreement comes first, not at contract signing.

• If you will show the buyer a residential property, the written agreement must be in place before the showing.
• If you will not show a property but will make an offer for the buyer, the agreement must be in place before that offer.

So the written agreement is a gateway to working with the buyer, not paperwork you catch up on later.

It is not automatically a representation agreement

Snippet answer: The written agreement SB 1968 requires is not necessarily a buyer-representation agreement. It must state whether the license holder represents the buyer or is only showing property without representation. It can be a representation agreement, but it does not have to be.

This is the single most important nuance, and it is exactly where a careless exam answer goes wrong. A written agreement is required, but representation is a separate question the agreement has to answer.

• The agreement can establish that you represent the buyer.
• Or it can state that you are only showing a property and do not represent the buyer.

In other words, "a written agreement is required" does not mean "you must represent every buyer." It means the relationship, including the absence of representation, must be in writing. Keep this separate from the IABS notice, which is a disclosure form, not the agreement itself.

What the written agreement must include

Snippet answer: Under Section 1101.563(c), the agreement must state the services to be provided, the termination date, whether it is exclusive or non-exclusive, whether the license holder represents the buyer, and the compensation amount or rate and how it is determined, and it must disclose conspicuously that broker compensation is not set by law and is fully negotiable.

Treat these as the terms the written agreement has to cover:

• The services the license holder will provide.
• The termination date of the agreement.
• Whether the agreement is exclusive or non-exclusive.
• Whether the license holder represents the buyer or is only showing property.
• The amount or rate of the license holder's compensation and how it is determined.
• A statement, in conspicuous language, that broker compensation is not set by law and is fully negotiable.

The compensation-is-negotiable language reflects the broader shift toward making fees transparent. For how compensation and fee splitting work more generally, see fee splitting, rebates, and compensation.

The showing-only agreement: non-exclusive and short

Snippet answer: If the written agreement is showing-only, with no representation, it may not be exclusive and its term may not be longer than 14 days. That keeps a no-representation arrangement limited rather than locking the buyer in.

The law treats a showing-only deal differently from a representation agreement. When the agreement says you are not representing the buyer:

• It cannot be exclusive.
• Its term cannot run longer than 14 days from the date it is entered.
• If you go on to provide brokerage acts beyond the showing, you must enter a separate written agreement for that work.

This stops a no-representation agreement from binding a buyer the way a full representation agreement would. The separate-agreement rule is an easy exam trap: a showing-only agreement does not quietly expand into representation. Under Section 1101.563(d), once you provide additional brokerage acts after the showing, a new written agreement is required. If the buyer wants ongoing help, that points toward a representation agreement instead.

Subagency is repealed

Snippet answer: SB 1968 removes subagency from Texas real estate law. The goal is to end confusion about who represents whom, so an agent is either representing a party or not, without an implied subagency relationship.

Subagency was a long-standing source of confusion about which agent owed duties to which party. By repealing it, Texas pushes everyone toward a clear, written answer to the representation question. For how Texas handles two parties in one brokerage, review intermediary practice, which Texas uses instead of dual agency.

How SB 1968 shows up on the exam

Snippet answer: Expect it in the state-law agency questions. Know that a written agreement is required before showing residential property, that the agreement states whether you represent the buyer, that showing-only agreements are non-exclusive and capped at 14 days, and that subagency is gone.

You do not need to memorize the bill. You need the handful of facts an exam item can hinge on:

1. A written agreement is required before showing residential property to a buyer, or before an offer if no showing happens.
2. The agreement is not automatically representation. It states whether you represent the buyer.
3. It must cover the services provided, the termination date, exclusivity, representation, compensation and how it is set, and that compensation is negotiable.
4. A showing-only, no-representation agreement is non-exclusive and limited to 14 days, and a separate agreement is required for any brokerage acts after the showing.
5. Subagency is repealed.
6. The rule is about residential buyers, not tenants or commercial deals.

For the full state-law structure this fits into, see the Texas real estate exam format, and for the broader 2026 changes, see what changed for the Texas exam in 2026.

Frequently Asked Questions

For quick answers to every common Texas exam question, see the Texas real estate exam FAQ.

When did SB 1968 take effect?

January 1, 2026. From that date, the written-agreement requirement applies to license holders working with prospective buyers of residential real property.

Does SB 1968 mean I have to represent every buyer?

No. It means you need a written agreement before showing residential property or making an offer. The agreement states whether you represent the buyer or are only showing property without representation.

Does SB 1968 apply to tenants or commercial property?

No. The requirement is written around a prospective buyer of residential real property. It is a purchase rule for residential property, not a tenant, lease, or commercial-brokerage rule.

What must the written buyer agreement include?

The services to be provided, the termination date, whether it is exclusive or non-exclusive, whether the license holder represents the buyer, and the compensation amount or rate and how it is determined, plus a conspicuous statement that broker compensation is negotiable and not set by law.

How long can a showing-only agreement last?

If the agreement is showing-only with no representation, it must be non-exclusive and its term cannot exceed 14 days from the date it is entered.

Did SB 1968 change subagency in Texas?

Yes. SB 1968 repeals subagency from Texas real estate law, so representation is a clear written question rather than an implied relationship.

Sources and Methodology

This article was reviewed against the enrolled SB 1968 bill text and bill analysis on June 24, 2026. SB 1968 (89th Texas Legislature, Regular Session) amends the Texas Real Estate License Act and is effective January 1, 2026. The written-agreement requirement and timing (before showing residential property, or before making an offer if no property is shown) come from new Section 1101.563 of the Occupations Code. The required terms are from Section 1101.563(c), which states the agreement must include the services to be provided, the termination date, whether the agreement is exclusive or non-exclusive, whether the license holder represents the buyer, and the compensation amount or rate and how it is determined, and must disclose in conspicuous language that broker compensation is not set by law and is fully negotiable. Section 1101.563(d) requires a separate agreement if additional brokerage acts are provided after a showing-only agreement under Section 1101.562. The showing-only limits and the repeal of subagency are from the bill as well. Because TREC is still adopting rules implementing SB 1968, confirm the current statute and TREC rules before relying on specific details.

Official Source Links

• Texas Legislature: SB 1968 history and text
• SB 1968 enrolled bill text (Occupations Code Sec. 1101.563)
• SB 1968 bill analysis
• TREC: What SB 1968 means for brokers
• TREC: Become a Real Estate Sales Agent

This post is educational content for Texas real estate sales agent candidates. It is not legal advice. SB 1968 is recent law and TREC rules under it are still being adopted, so confirm the current statute and TREC rules before you rely on any detail in practice. Exam content can change, so verify against current Pearson VUE and TREC sources before you test.