Texas Intermediary Practice: Why Texas Has No Dual Agency

Start Here

Texas intermediary questions are dangerous because the words feel familiar.

You may have heard "dual agency" in another state, another course, or another real estate conversation. Do not carry that language into a Texas exam question.

Texas has a different answer.

Use this rule:

Texas does not allow dual agency. Texas uses intermediary practice when the same broker represents more than one party in a transaction.

That sentence is the center of this topic.

But it is only the start. The exam will not always ask:

Does Texas permit dual agency?

That would be too easy.

Instead, the exam may show you:

• A buyer and seller represented by the same brokerage.
• A sales agent who wants to advise both sides.
• A broker who has IABS but no written intermediary authorization.
• A broker who appoints one sales agent to the seller and one to the buyer.
• A broker who makes no appointments.
• A license holder who reveals a buyer's highest price or a seller's lowest price.
• A delegated appointment where the delegate tries to appoint themselves.

Those are intermediary questions.

The clean way to study them is to separate four ideas:

IABS -> written intermediary consent -> appointments -> confidentiality

IABS is the brokerage-services notice. It is not enough by itself.

Written intermediary consent is the authorization that lets the broker act as intermediary.

Appointments determine whether individual associated license holders may advise their appointed parties.

Confidentiality limits what the intermediary and appointed license holders may reveal.

If you keep those four pieces in order, this topic becomes much easier.

What Pearson Is Testing

Pearson's Texas Sales Agent state-law outline lists Agency/Brokerage as an 11-item category.

That category includes:

• Disclosure.
• Intermediary practice.
• Duties to clients, including minimum services.
• Broker-sales agent relationships.
• Broker responsibility for acts of a sales agent.
• Appropriate use of unlicensed assistants.

Intermediary practice is not a side note. It is one of the most Texas-specific agency topics on the exam.

The national portion may test general agency concepts.

The Texas portion wants Texas language.

That means your answer choices may include:

• Dual agent.
• Intermediary.
• Appointed license holder.
• Customer.
• Principal.
• Written consent.
• Confidential information.
• Advice and opinions.

The exam is testing whether you know the Texas structure, not whether you can define agency in the abstract.

The Simple Rule

Memorize this first:

No dual agency. Use intermediary.

Then memorize the fuller version:

When the same Texas broker represents both the buyer and seller in a transaction, the broker must act as an intermediary with the required written authorization and statutory limits.

That does not mean every same-broker transaction is automatically allowed.

It means the broker needs the proper structure before representing more than one party.

Here is the exam contrast:

The exam usually rewards the answer that protects consent, neutrality, and confidentiality.

Why Texas Has No Dual Agency

Texas does not allow dual agency because full loyalty to both sides at the same time can collapse into a conflict, so Texas handles that conflict through controlled intermediary practice instead.

In a normal agency relationship, a broker owes duties to the client.

Those duties include loyalty, fidelity, disclosure, competence, and putting the client's interest first within the law.

Now imagine the same broker tries to fully represent both sides in the same negotiation.

The buyer wants the lowest acceptable price.

The seller wants the highest acceptable price.

The buyer may share a top number.

The seller may share a bottom number.

The buyer may want aggressive repair terms.

The seller may want a clean contract with fewer obligations.

That is why generic "dual agent" language creates problems. Full loyalty to both sides at the same time can collapse into a conflict.

Texas handles that conflict through intermediary practice.

Intermediary does not pretend the broker can be a full advocate for both sides in the same way at the same time.

Instead, it creates a controlled structure:

• Both sides must know what is happening.
• Both sides must give written authorization.
• The broker must not favor one principal over the other.
• Confidential information remains protected.
• Appointed associated license holders may advise their appointed parties if proper appointments are made.
• Without appointments, advice and opinions are restricted.

That is why the phrase "Texas has no dual agency" is more than trivia.

It explains the whole system.

What An Intermediary Is

An intermediary is the broker who negotiates the transaction between the parties when the broker, or a sales agent sponsored by the broker, has obtained consent from the parties to represent both the buyer and the seller. A sales agent does not independently become the intermediary.

TREC's FAQ describes an intermediary as a broker who negotiates the transaction between the parties when the broker, or a sales agent sponsored by the broker, has obtained consent from the parties to represent both the buyer and the seller. The statutory basis is Section 1101.559(a), which permits a broker to act as an intermediary if the broker obtains written consent from each party and that consent states the source of any expected compensation to the broker.

For exam purposes, shorten that to:

Intermediary = the broker with consent to handle both sides under Texas rules.

Notice the word broker.

That matters.

A sales agent does not independently become the intermediary. Sales agents act through the sponsoring broker.

If Agent A represents the seller and Agent B represents the buyer, and both agents are sponsored by the same broker, the broker is the intermediary when the requirements are satisfied.

The individual agents may become appointed license holders.

They are not separate brokers.

They are not dual agents.

They are associated license holders working inside the broker's intermediary structure.

The Intermediary Formation Checklist

Before a broker can represent both buyer and seller, three things must be in place: both parties receive IABS at first substantive communication, the seller signs a written document authorizing the broker to act as intermediary, and the buyer signs a written document authorizing the broker to act as intermediary. Both written authorizations must include the required prohibited-conduct language in conspicuous bold or underlined print.

TREC's FAQ gives a practical formation sequence. Before a broker or a sales agent sponsored by the broker can represent both buyer and seller in a transaction, three things must be in place:

1. Both buyer and seller are presented with IABS by their respective sales agent at the time of first substantive communication.
2. The seller executes a listing agreement or other written document that authorizes the broker to act as intermediary and includes the required prohibited-conduct language in conspicuous bold or underlined print.
3. The buyer executes a buyer representation agreement or other written document that authorizes the broker to act as intermediary and includes the required prohibited-conduct language in conspicuous bold or underlined print.

That is a lot of words, so use this exam version:

IABS + seller written authorization + buyer written authorization.

Then add:

The written authorization must include the required prohibited-conduct language in conspicuous bold or underlined print.

The second consent requirement candidates forget

Direct answer: The written consent must also state the source of any expected compensation to the broker. This is a separate requirement from the authorization itself, and it is easy to miss because the bold-print rule gets all the attention.

Read the statute as two conditions, not one. Under Section 1101.559(a), a broker may act as intermediary if the broker obtains written consent from each party, and that written consent states the source of any expected compensation to the broker. Both must hold.

Section 1101.559(b) then supplies the shortcut most brokerages use: a written listing agreement or buyer representation agreement that authorizes intermediary is itself sufficient to establish that party's written consent, provided it specifies in conspicuous bold or underlined print the conduct prohibited under Section 1101.651(d).

On the exam, an answer choice that describes consent as obtained but says nothing about compensation is testing this. So is a stem that gives you a signed authorization with the bold-print language and then asks whether anything further is required.

Common wrong answers say:

• Intermediary is automatic because both agents work for the same company.
• Intermediary is automatic because IABS was provided.
• Oral consent is enough.
• Only the seller needs to consent.
• The sales agent can decide to be intermediary.

All of those are traps.

The safe answer is written authorization from both sides, through the broker, with required statutory limits.

IABS Versus Intermediary Consent

This is one of the biggest exam traps.

IABS is required agency information.

Intermediary consent is authorization to let the broker act as intermediary.

They are related, but they are not the same.

Here is the exam version:

IABS informs. Written intermediary consent authorizes. Appointments assign.

If the question says only that IABS was provided, do not assume intermediary is authorized.

IABS is the starting disclosure.

It is not the full intermediary structure.

The Broker Is The Intermediary

This is another place candidates miss points.

The intermediary is the broker.

Not the sales agent.

Not the buyer's appointed license holder.

Not the seller's appointed license holder.

Not the brokerage team name.

The broker is the legal center of the intermediary relationship.

Why does that matter?

Because exam questions often describe two sales agents:

Maria represents the seller. David represents the buyer. Maria and David are sponsored by the same broker.

That does not mean Maria and David become dual agents.

It means the broker may act as intermediary if all requirements are met.

Maria and David may be appointed to work with and advise their respective parties if the broker makes proper appointments with written consent.

This is also why broker supervision matters.

The broker is responsible for the brokerage structure. Sponsored sales agents cannot freelance their way into an intermediary relationship.

The Intermediary's Own Duty

Direct answer: Section 1101.559(c) states it in five words: an intermediary shall act fairly and impartially. That is the statutory duty, and it is worth knowing in the statute's language rather than a paraphrase.

Candidates learn "must not favor one principal over the other," which is TREC's phrasing and is correct as far as it goes. The statutory formulation is stronger and more useful, because "fairly and impartially" is an affirmative standard rather than a prohibition. The broker is barred from tipping the scales, and must also actively hold them level.

Section 1101.561(b) supplies the other half: a broker who agrees to represent more than one party in a transaction shall act as an intermediary under Subchapter L. The word is "shall." There is no third option where the broker represents both parties as something else.

Read together:

1101.561(b): agree to represent both -> you must be an intermediary.
1101.559(c): as intermediary -> act fairly and impartially.

Appointments

Under Section 1101.560, a broker who has complied with the written consent requirements may appoint one associated license holder to communicate with and carry out the instructions of one party, and another license holder to do the same for any other party. Two conditions attach, and the appointee's advice power is framed around negotiations. Appointments do not erase confidentiality rules, do not allow protected information to be revealed, and do not permit dual agency.

Appointments are what make Texas intermediary practice workable in many exam scenarios.

With written consent of the parties, the intermediary broker may appoint separate associated license holders to work with and advise each party.

Example:

Same broker represents both sides.
Agent A is appointed to the seller.
Agent B is appointed to the buyer.

If done properly, Agent A may work with and advise the seller.

Agent B may work with and advise the buyer.

That is the point of appointments.

The appointed license holders can give a higher level of service to their appointed parties than an unappointed intermediary could provide.

But appointments are not magic.

They do not erase confidentiality rules.

They do not allow the appointed license holder to reveal protected information.

They do not turn the appointed license holder into an independent broker.

They do not permit one side to be favored by the intermediary broker.

They do not allow dual agency.

Think of appointments like this:

Appointment = permission for separate associated license holders to advise separate parties inside the broker's intermediary relationship.

The three things Section 1101.560 actually requires

The lesson above describes what appointments do. Here is what the statute demands, and each part is testable on its own.

The second and third are where candidates lose marks. Consent to intermediary is not automatically consent to appoint; the written consent has to authorize the appointment specifically. And consent alone does not finish the job, because the broker still owes everyone written notice that the appointment was made.

The wording of the advice power

Section 1101.560(c) reads: a license holder appointed under that section may provide opinions and advice during negotiations to the party to whom the license holder is appointed.

Note "during negotiations." The power the appointment confers is framed around the negotiation, not a general license to counsel the party about anything. An item that has an appointed license holder advising outside that frame is testing the qualifier.

Note also the pairing in Section 1101.560(a): the broker appoints "a license holder" to one party and "another license holder" to any other party. Two different people. That is why one associated license holder working with both sides cannot be appointed at all.

No Appointments

If no appointments are made, the broker and associated license holders may not offer advice and opinions relevant to the transaction to either party and must not favor one principal over the other. Confidential information still must be protected.

If no appointments are made, the rule changes.

Section 1101.560(c) grants the advice power only to an appointed license holder, so where no appointment is made there is no one holding that power. TREC's FAQ states the consequence: if the broker does not appoint associated license holders to represent the buyer and seller respectively, then the broker and agent may not offer advice and opinions relevant to the real estate transaction to either party and must not favor one principal over the other.

That is a high-yield exam point.

No appointments means:

• The broker must remain neutral.
• Associated license holders must avoid advice and opinions to either side.
• The broker and license holders must not favor one principal over the other.
• Confidential information still must be protected.

What can they still do?

They can transmit information.

They can help with administrative and factual transaction flow.

They can explain objective information.

They can present offers and counteroffers.

They can communicate what a party has authorized them to communicate.

What should they not do?

They should not tell the buyer what price to offer.

They should not tell the seller what price to accept.

They should not recommend strategy to one side.

They should not reveal confidential negotiating information.

Exam questions often ask:

The broker is acting as intermediary and has made no appointments. Can the broker advise the buyer to increase the offer?

The answer is no.

Without appointments, advice and opinions to either party are not allowed.

Delegating Appointment Authority

TREC's FAQ says the intermediary may delegate to another license holder the authority to appoint associated license holders.

That sounds simple, but the trap is in the next sentence.

If the intermediary authorizes another license holder to make appointments, that delegated license holder cannot designate themselves as one of the appointed license holders.

Why?

Because that would combine two different functions:

• Making the appointments.
• Serving as one of the appointed license holders.

The FAQ calls that an improper combination of the intermediary and appointed-license-holder functions.

For the exam, remember:

Delegation can happen, but the delegate cannot appoint themselves.

Also remember:

There is still one intermediary broker.

Delegation of appointment authority does not create a second intermediary.

It does not make the delegate the intermediary.

It does not remove the broker from responsibility.

Confidentiality Rules

Intermediary questions often turn on confidentiality.

TREC's FAQ says there will always be a single intermediary broker, even if another license holder has been authorized to make appointments. The intermediary is prohibited from acting so as to favor one principal over the other and may not reveal confidential information obtained from one principal without written instructions from that principal, unless disclosure is required by TRELA, court order, or the information materially relates to the condition of the property.

That paragraph has several exam rules inside it.

Break it down:

One intermediary broker.
No favoring one principal.
No revealing confidential information without permission, unless a legal or property-condition exception applies.

The five prohibitions, in the statute's order

Section 1101.651(d) applies to a broker and any broker or sales agent appointed under Section 1101.560 who acts as an intermediary. It lists five prohibitions, and most study material teaches only the first three.

Items 4 and 5 are the ones candidates have never seen. They matter because they close the loop: an intermediary who technically avoids disclosing a number can still violate Section 1101.651(d) by treating a party dishonestly.

Note the precision in items 1 and 2. Item 1 is keyed to the asking price. Item 2 is keyed to the price submitted in a written offer, not to any figure the buyer has mentioned. And the escape hatch in both is a separate writing, not an oral instruction and not a clause buried in the representation agreement.

The exam may ask about:

• Price.
• Motivation.
• Urgency.
• Financing weakness.
• Repair strategy.
• Willingness to accept less.
• Willingness to pay more.
• Information that materially relates to the condition of the property.

Do not treat all information the same.

Some information is confidential.

Some information must be disclosed because law requires it.

Some information materially relates to property condition and cannot be hidden behind confidentiality.

The exam wants you to protect confidential negotiating information while still recognizing required disclosures.

Price-Floor And Price-Ceiling Traps

This is the money line for many intermediary questions:

The intermediary and any appointed associated license holders are prohibited from disclosing, without written authorization, that the seller will accept less than the asking price or that the buyer will pay more than the price submitted in a written offer.

Do not memorize only the words.

Understand the logic.

The seller's lower acceptable price is a negotiating floor.

The buyer's higher acceptable price is a negotiating ceiling.

Those are exactly the kinds of facts that could harm a party if revealed.

Exam examples:

The seller tells the appointed license holder, "I would take $20,000 less if I had to."

That cannot be disclosed to the buyer without written authorization from the seller.

The buyer tells the appointed license holder, "I offered $390,000, but I would go up to $410,000."

That cannot be disclosed to the seller without written authorization from the buyer.

The answer is not:

Disclose it because the broker represents both parties.

The answer is:

Protect confidential negotiating information unless written authorization or a legal exception applies.

Intermediary Versus Customer Status

Not every same-transaction contact creates intermediary.

A broker can represent one principal and work with the other party as a customer.

Example:

The listing broker represents the seller.
An unrepresented buyer calls about the property.
The listing broker gives required disclosures and treats the buyer honestly and fairly, but does not represent the buyer.

That is not intermediary merely because the listing broker communicates with the buyer.

Intermediary becomes relevant when the broker agrees to represent more than one party in the transaction.

This distinction matters because exam writers like to blur:

• Customer.
• Client.
• Principal.
• Party.
• Represented party.
• Unrepresented party.
• Intermediary.

The simplest check is:

Who is the broker representing?

If one side is a client and the other is only a customer, you may have agency disclosure and fair-dealing duties, but not intermediary.

If both sides are represented by the same broker, intermediary requirements move to the front.

Common Exam Traps

Trap 1: "Dual agency" sounds familiar

Texas does not permit dual agency. If an answer says the broker should act as a dual agent, be very cautious.

The Texas answer is intermediary or represent only one principal while treating the other as a customer.

Trap 2: IABS equals intermediary

IABS does not create intermediary status.

IABS is required agency information.

Intermediary requires written authorization from both sides.

Trap 3: The sales agent is the intermediary

The broker is the intermediary.

Associated license holders may be appointed.

Trap 4: Appointments are optional, so they do not matter

Appointments matter because appointed associated license holders may work with and advise the parties to whom they are appointed.

Without appointments, advice and opinions are restricted.

Trap 5: The intermediary can share everything because both parties consented

No.

Consent to intermediary is not consent to reveal confidential negotiating information.

Written authorization is still required for protected information.

Trap 6: One appointed license holder can advise both parties

That defeats the point of separate appointments.

The exam expects separate associated license holders appointed to separate parties when advice is being provided to both sides.

Trap 7: A delegate can appoint themselves

TREC's FAQ says the delegated license holder who makes appointments cannot designate themselves as one of the appointed license holders.

Trap 8: No appointments still allows advice

No appointments means no advice or opinions relevant to the transaction to either party.

Trap 9: Confidentiality hides property condition

Information materially related to the condition of the property is different from confidential negotiating strategy. Do not let "confidentiality" hide required property-condition information.

Trap 10: Intermediary lets the broker favor both sides somehow

The intermediary must not favor one principal over the other.

That is why the role is controlled and limited.

Decision Tree

Use this on every scenario:

1. Is the same broker representing more than one party in the transaction?
   If no, this is probably ordinary representation plus customer/fair-dealing duties.
   If yes, continue.

2. Did both sides receive required agency information and give written intermediary authorization?
   If no, intermediary is not properly formed.
   If yes, continue.

3. Were associated license holders appointed to each party with written consent?
   If yes, appointed license holders may work with and advise their appointed parties.
   If no, the broker and agents may not give advice or opinions to either party.

4. Is the question about confidential negotiating information?
   If yes, do not disclose without written authorization unless a legal or property-condition exception applies.

5. Is the answer choice using "dual agent"?
   If yes, reject it unless the choice says Texas does not permit dual agency.

That decision tree is not a substitute for the law.

It is an exam tool.

It helps you slow the scenario down and identify the rule being tested.

Mini Scenarios

Scenario 1: Same brokerage, two sales agents

Agent Lena lists a property. Agent Omar, sponsored by the same broker, represents a buyer who wants to make an offer.

The broker has written intermediary authorization from both the seller and buyer. The broker appoints Lena to the seller and Omar to the buyer.

What is the correct exam analysis?

The broker is acting as intermediary. Lena and Omar are appointed associated license holders. Each may work with and advise the party to whom they are appointed, subject to confidentiality and other limits.

Wrong answer:

Lena and Omar are dual agents.

Texas does not permit dual agency.

Scenario 2: IABS only

A buyer receives IABS from a sales agent sponsored by the listing broker. The buyer then says they want the listing broker to represent them too.

The brokerage has not obtained written intermediary authorization from both sides.

Can the broker act as intermediary just because IABS was delivered?

No.

IABS is not enough. Written intermediary authorization from both sides is required.

Scenario 3: No appointments

A broker properly becomes intermediary but does not appoint associated license holders to the seller and buyer.

The buyer asks the broker:

Should I raise my offer by $10,000?

What should the exam answer?

The broker should not provide advice or opinions relevant to the transaction to either party when no appointments have been made. The broker must remain neutral and avoid favoring one principal over the other.

Scenario 4: Seller's bottom number

The seller tells the appointed license holder:

I would accept $15,000 less than list price if we can close quickly.

Can that be disclosed to the buyer?

Not without written authorization from the seller. This is confidential negotiating information.

Scenario 5: Buyer wants to pay more

The buyer submits a written offer for $425,000 and privately tells the appointed license holder:

I can go to $440,000 if I need to.

Can that be disclosed to the seller?

Not without written authorization from the buyer.

The buyer's willingness to pay more than the submitted written offer is protected.

Scenario 6: Property condition

The seller tells the broker about a known condition that materially affects the property.

Can the intermediary hide that information by calling it confidential?

No. Confidentiality does not excuse a required disclosure of information that materially relates to the condition of the property.

Scenario 7: Delegated appointments

The broker intermediary authorizes a senior associated broker to make appointments. The senior associated broker appoints themselves to the seller and another agent to the buyer.

Is that clean?

No.

TREC's FAQ says that if the intermediary authorizes another license holder to appoint associated license holders, that license holder cannot designate themselves as one of the appointed license holders.

Scenario 8: One client and one customer

A listing broker represents the seller. An unrepresented buyer asks questions about the home. The listing broker treats the buyer honestly and fairly but does not agree to represent the buyer.

Is the broker an intermediary?

No.

The broker represents only the seller. The buyer is a customer, not a client, unless representation is created.

How To Study This Topic

Do not study intermediary by memorizing a paragraph.

Study it by sorting scenarios.

For every practice question, write four labels:

Broker:
Seller side:
Buyer side:
Appointment:

Then fill them in:

Broker: One broker or two brokers?
Seller side: represented or customer?
Buyer side: represented or customer?
Appointment: none, seller only, buyer only, or both?

That forces the agency map to become visible.

Then ask:

Is someone giving advice?
Is someone favoring one principal?
Is someone revealing protected information?

If yes, you know where the trap is.

Memory Hooks

Use these:

No dual. One broker. Written consent. Appoint to advise. Protect confidence.

And:

IABS informs. Consent authorizes. Appointment advises. Confidentiality protects.

And:

No appointment means no advice.

Those are short because they need to be usable under exam pressure.

Practice Questions, 1 To 6

These are original practice questions written for learning. They are not copied from TREC, Pearson VUE, or any live exam.

Question 1

Texas law permits a broker to represent both buyer and seller as a dual agent.

A. True
B. False

Answer: B.

Texas does not permit dual agency. Texas uses intermediary practice when the same broker represents more than one party under the required structure.

Question 2

A listing broker represents the seller. An unrepresented buyer asks about the property, and the broker does not agree to represent the buyer. What is the best classification?

A. Intermediary automatically exists.
B. The broker is a dual agent.
C. The broker represents the seller and works with the buyer as a customer.
D. The sales agent represents both parties personally.

Answer: C.

Intermediary is about the same broker representing more than one party. Merely communicating with an unrepresented buyer does not create intermediary.

Question 3

Which statement is most accurate?

A. IABS automatically authorizes intermediary.
B. IABS is related to agency disclosure but does not by itself create intermediary authorization.
C. IABS is only required after closing.
D. IABS is only used when no broker is involved.

Answer: B.

IABS is a disclosure notice. Intermediary requires written authorization from both sides.

Question 4

The same broker represents both buyer and seller. What must happen before the broker can properly act as intermediary?

A. Only the listing agent must consent.
B. Only the buyer's agent must consent.
C. Both sides must have the required written authorization structure.
D. No written authorization is needed if the broker is experienced.

Answer: C.

Intermediary requires written authorization from both sides, along with the required statutory structure.

Question 5

Who is the intermediary in a Texas intermediary relationship?

A. The seller's appointed sales agent.
B. The buyer's appointed sales agent.
C. The broker.
D. The title company.

Answer: C.

The intermediary is the broker. Associated license holders may be appointed, but they are not the intermediary broker.

Question 6

A broker properly acts as intermediary and appoints one associated license holder to the seller and another to the buyer. What may the appointed license holders do?

A. Work with and advise the parties to whom they are appointed, subject to legal limits.
B. Reveal all confidential information to the broker's other client.
C. Become dual agents.
D. Ignore the broker's supervision.

Answer: A.

Appointments allow appointed associated license holders to work with and advise their appointed parties, but confidentiality and other limits still apply.

Practice Questions, 7 To 12

Question 7

If no appointments are made in an intermediary transaction, what is the best rule?

A. The broker and agents may advise both sides freely.
B. The broker and agents may not offer advice or opinions relevant to the transaction to either party.
C. The seller receives advice, but the buyer does not.
D. The buyer receives advice, but the seller does not.

Answer: B.

Without appointments, advice and opinions to either party are restricted.

Question 8

The seller tells the appointed license holder that the seller will accept less than asking price. Can that be disclosed to the buyer without written authorization from the seller?

A. Yes, because the broker represents both parties.
B. Yes, because intermediary cancels confidentiality.
C. No.
D. Only if the buyer asks twice.

Answer: C.

The seller's willingness to accept less than the asking price is protected without written authorization from the seller.

Question 9

The buyer submits a written offer and privately says they will pay more. Can that be disclosed to the seller without written authorization from the buyer?

A. Yes.
B. No.
C. Only if the seller is also represented by the same broker.
D. Only if the buyer is using financing.

Answer: B.

The buyer's willingness to pay more than the submitted written offer is protected without written authorization from the buyer.

Question 10

The intermediary delegates appointment authority to another license holder. That license holder appoints themselves to one party. What is the exam issue?

A. This is always required.
B. This is an improper combination of appointment authority and appointed-license-holder function.
C. This creates a title defect.
D. This turns the buyer into a customer.

Answer: B.

TREC's FAQ says the delegated license holder cannot designate themselves as one of the appointed license holders.

Question 11

Which fact is most likely to defeat a claim of confidentiality?

A. The buyer's highest acceptable price.
B. The seller's lowest acceptable price.
C. Information materially related to the condition of the property.
D. The buyer's private negotiation strategy.

Answer: C.

Confidentiality does not hide information that materially relates to the condition of the property when disclosure is required.

Question 12

Which memory hook is best for Texas intermediary practice?

A. Dual agency is allowed if both parties like the broker.
B. IABS alone creates both-side representation.
C. No dual. One broker. Written consent. Appoint to advise. Protect confidence.
D. Sales agents choose intermediary status without the broker.

Answer: C.

That is the clean exam structure.

Final Checklist

Before you leave this topic, make sure you can explain these:

• Texas does not permit dual agency.
• The Texas answer is intermediary, not dual agency, when the same broker represents more than one party.
• The broker is the intermediary.
• Sales agents may be appointed associated license holders.
• IABS does not automatically create intermediary.
• Written authorization is required from both sides.
• The seller-side written document and buyer-side written document must authorize intermediary and include required prohibited-conduct language.
• Appointed associated license holders may work with and advise their appointed parties.
• Without appointments, advice and opinions relevant to the transaction are restricted.
• The intermediary must not favor one principal over the other.
• Confidential information may not be revealed without written instructions unless a legal or property-condition exception applies.
• A seller's willingness to accept less and a buyer's willingness to pay more are classic protected facts.
• Appointment authority may be delegated, but the delegate cannot appoint themselves.
• Customer status is different from intermediary.

How This Connects To Other Texas Topics

Intermediary connects to:

• Texas intermediary brokerage and IABS explained, the broader hub that walks through intermediary brokerage and the IABS notice end to end.
• Agency disclosure and the IABS form, because IABS is part of the front-end disclosure sequence but does not create intermediary by itself.
• Duties to clients and minimum services, because intermediary limits how client duties are handled when the same broker represents both sides.
• Broker-sales agent relationships and supervision, because the broker is the intermediary and sales agents act through the sponsoring broker.
• Standards of conduct and grounds for discipline, because improper intermediary practice can become a conduct and discipline issue.
• TRELA Chapter 1101 explained, because intermediary practice comes from Texas license law, not generic agency vocabulary.
• Free Texas agency and brokerage practice questions, to drill intermediary, appointments, and IABS scenarios in the state-law style.

Frequently Asked Questions

Does Texas allow dual agency?

No. TREC's FAQ says Texas law does not permit dual agency. If the same broker agrees to represent more than one party in a transaction, the Texas structure is intermediary practice with the required notice, consent, and conduct limits.

What is an intermediary in Texas real estate?

An intermediary is the broker who negotiates the transaction between parties when the broker, or a sales agent sponsored by the broker, has obtained consent from the parties for the broker to represent both buyer and seller under the Texas intermediary statute.

Is IABS the same as intermediary consent?

No. IABS is required agency information. Intermediary consent is written authorization that allows the broker to act as intermediary. IABS alone does not authorize intermediary.

Who is the intermediary, the broker or sales agent?

The broker is the intermediary. Associated license holders may be appointed to work with and advise the parties, but the sales agent is not the intermediary broker.

What happens if no appointments are made?

If no appointments are made, the broker and associated license holders may not offer advice and opinions relevant to the transaction to either party and must not favor one principal over the other.

What does an appointed license holder do?

With proper written consent and appointment, an associated license holder may work with and advise the party to whom the license holder is appointed. The appointed license holder still must follow confidentiality and other legal limits.

Can an intermediary reveal the seller's lowest price?

Not without written authorization from the seller. The seller's willingness to accept less than the asking price is protected.

Can an intermediary reveal the buyer's highest price?

Not without written authorization from the buyer. The buyer's willingness to pay more than the price in a submitted written offer is protected.

Can confidential information hide property condition facts?

No. Information materially related to the condition of the property is treated differently from confidential negotiating strategy. Do not use confidentiality to hide required property-condition disclosure.

Can the Texas real estate exam prep app help me practice intermediary questions?

Yes. The Texas real estate exam prep app can help you practice no-dual-agency traps, intermediary consent, appointments, no-appointment limits, confidentiality, and price-floor or price-ceiling scenarios with original Texas-focused explanations. Native Texas exam prep. Original questions. No copied exam questions. Not affiliated with TREC or Pearson VUE. Not a 180-hour pre-license course or a pass guarantee.

Is this article legal or brokerage advice?

No. This is educational exam prep. For real-world intermediary practice, IABS delivery, written authorization, appointment forms, confidential information, brokerage supervision, or compliance questions, verify current official sources and consult your sponsoring broker, attorney, compliance professional, or other qualified professional.

Primary-source verification (2026-07-29): This article was verified against Texas Occupations Code Sections 1101.559, 1101.560 and 1101.561 read in full, and Section 1101.651(d) including all five prohibitions and the three exceptions written into (d)(3); TREC's FAQ entries on intermediary practice, dual agency, appointments, no-appointment limits, confidentiality, IABS, and agency disclosure; TREC Rule 531.20 on IABS delivery; TREC Rules 531.2 through 531.4 on fidelity, integrity, and competency; and the Pearson VUE Texas Real Estate Content Outlines effective January 1, 2026. TREC rules, FAQ language, forms, and outlines can change. Verify current details with TREC before relying on them.

This post is educational exam-preparation content for Texas real estate sales agent candidates. It is not legal, brokerage, agency, compliance, or disciplinary advice. For real-world intermediary practice, IABS delivery, written authorization, appointments, or confidentiality questions, consult your sponsoring broker or a qualified attorney.

Sources and Methodology

• TREC Frequently Asked Questions
• TREC Rules
• Texas Occupations Code Chapter 1101 (TRELA), intermediary sections 1101.558 to 1101.561
• TREC Information About Brokerage Services form page
• Pearson VUE Texas Real Estate Content Outlines

This is written as the canonical Texas intermediary article for exam candidates. The method was to start with TREC's no-dual-agency FAQ language, map the official intermediary formation steps, separate IABS from written intermediary authorization, explain appointments and no-appointment limits, then turn the most testable confidentiality rules into original scenarios and practice questions.