Disclosure and IABS
Tests: TRELA §1101.558(c), the IABS exception
A license holder is hosting an open house for their seller-client. A visitor walks in, asks about the school district, then asks whether the seller would take $10,000 less.
- Decides
The conversation happens at an open house about that propertyThis is one of the three situations where the IABS notice is not required.
- Decides
The visitor is not represented by anyoneMakes them a customer, owed honesty and material-defect disclosure, nothing more.
- Noise
The visitor asks about the school districtLooks substantive, decides nothing. It is not about representation or this party's position.
- Decides
The visitor asks whether the seller would accept lessThis targets the client's bottom line, which is confidential.
Is the IABS notice required here, and may the license holder answer the price question?
AnswerNo notice is required at the open house itself, and the license holder may not reveal that the seller would accept less.
WhyThe open-house exception covers the notice. Confidentiality is a separate duty that does not switch off because the other person is only a customer.
The trapChoosing "must deliver IABS immediately." The exception applies. The second trap is treating a customer as owed nothing. They are still owed honesty and known material defects.
Read the governing lesson →Intermediary practice
Tests: TRELA §1101.559 to §1101.560, intermediary with appointments
Agent A listed the property. Agent B, at the same brokerage, is working with a buyer who wants it. Both parties signed agreements consenting in writing to intermediary. The broker appoints A to the seller and B to the buyer.
- Decides
Both agents work at the same brokerageOne broker on both sides. This is the intermediary trigger.
- Decides
Both parties consented in writingWritten consent from both is what makes intermediary lawful.
- Decides
Different license holders were appointed to each partyAppointments unlock advice to the appointed party.
- Noise
A and B work from different offices and have never metGeography and familiarity change nothing. The broker is the same.
What is the relationship, and may Agent B advise the buyer on what to offer?
AnswerIntermediary with appointments. Agent B may advise the buyer.
WhyThe broker stays neutral, but an appointed license holder may advise the party they were appointed to. That is the entire point of making appointments.
The trapAnswering "dual agency," which is never correct in Texas. The subtler trap is assuming the neutrality of the broker also silences the appointed agents. It does not.
Read the governing lesson →Intermediary practice
Tests: TRELA §1101.559, intermediary without appointments
Identical facts to the scenario above, except the broker makes no appointments. The buyer asks their agent whether the asking price is too high.
- Decides
Same broker on both sides with written consentStill intermediary.
- Decides
No appointments were madeWithout appointments nobody may advise either party.
- Decides
The buyer asks for an opinion on priceAn opinion on price is advice, which is exactly what is unavailable here.
May the agent tell the buyer the price is too high?
AnswerNo. Without appointments, the agent may not give an opinion or advice that favors either party.
WhyChanging one fact, the appointments, flips the answer from the previous scenario. The exam tests this pair constantly.
The trapCarrying the previous answer over. Candidates who learned "appointed agents may advise" apply it to a fact pattern with no appointments.
Read the governing lesson →Duties to client and minimum services
Tests: TRELA §1101.557(b), minimum services owed to a represented party
A broker represents a seller under an exclusive listing. While the seller is abroad and hard to reach, an offer arrives that the broker considers insultingly low. The broker decides to wait until the seller is back before mentioning it.
- Decides
The broker represents the seller under an exclusive listing§1101.557(a): that broker is the party's agent, so the minimum-services duties in (b) apply.
- Decides
An offer was received§1101.557(b)(2) requires informing the party of material information including the receipt of an offer.
- Noise
The broker judged the offer to be too lowThe broker's opinion of the offer's merit changes nothing. Screening offers is exactly what the rule forbids.
- Noise
The seller is abroad and hard to reachInconvenience is not an exception. The duty is to present, not to present when convenient.
Has the broker met their obligations?
AnswerNo. The broker must inform the seller of the offer and, at a minimum, present any offer to or from the party.
Why§1101.557(b)(3) sets a floor: answer the party's questions and present any offer. A broker cannot filter offers by their own view of whether the price is reasonable.
The trapChoosing "the broker may use professional judgment about which offers are worth presenting." That reads like competent service and is precisely the violation.
Read the governing lesson →Unlicensed assistants
Tests: 22 TAC §535.5(g) with §535.4(c), (f); TRELA §1101.351(a): the clerical-staff carve-out and the acts reserved to license holders
An unlicensed assistant answers the office phone. A caller asks how many bedrooms the listing has, and then asks whether it is priced well.
- Decides
The assistant is unlicensedSets the boundary between clerical work and licensed activity.
- Decides
The first question asks for a fact printed in the listingRepeating published factual information is clerical.
- Decides
The second question asks for an opinion on priceConfirming the advertised price is clerical. Judging whether it is a good price is an opinion, and opinions require a license.
- Noise
The assistant has years of real estate experienceExperience is irrelevant. Licensure is the test.
Which questions may the assistant answer?
AnswerThe bedroom count, yes, because it is factual information from the listing. The pricing question, no.
WhyThe line is not who is talking, it is what is being provided: published facts are clerical, opinions and negotiation are licensed activity.
The trapAssuming an unlicensed assistant may not speak to the public at all. The exam rewards the precise line, not the cautious one.
Read the governing lesson →Broker's responsibility for acts of a sales agent
Tests: TRELA §1101.803 with §1101.652(b)(23), broker liability for a sales agent's advertising
A sponsored sales agent posts a listing advertisement under their own personal brand name. It does not name the brokerage, and it reads as though the agent runs the firm. The broker never saw it. A consumer complains to TREC.
- Decides
The advertisement omits the name of the broker the license holder acts for§1101.652(b)(23)(D) names this directly as grounds for disciplinary action.
- Decides
The ad implies the sales agent runs the brokerage§1101.652(b)(23)(C) names this separately, so there are two violations, not one.
- Decides
The agent was sponsored and acting for the broker§1101.803 reaches conduct by a sales agent associated with or acting for the broker.
- Noise
The broker never saw the post§1101.803 has no knowledge element. This is the distractor the item is built around.
- Noise
It was social media rather than a printed advertisementThe provision addresses advertising, not the medium.
Who carries responsibility here?
AnswerThe advertisement violates the advertising provision, and responsibility reaches the broker as well as the sales agent.
WhyA sales agent has no independent standing to do brokerage (§1101.351(c)), so conduct in that capacity runs through the sponsorship and reaches the broker under §1101.803.
The trapChoosing "only the sales agent, because the broker did not know." Lack of knowledge is nowhere in §1101.803. The opposite over-correction, answering "only the broker," is also wrong: responsibility reaching the broker does not remove the agent's own accountability.
Read the governing lesson →Broker and sales agent relationships
Tests: TRELA §1101.651(b) with 22 TAC §535.3: source of compensation, and the broker's written consent
A satisfied buyer wants to pay the sales agent a bonus directly, by personal check, on top of the negotiated commission.
- Decides
The payment would go from a party straight to the sales agent§1101.651(b): a sales agent may not accept compensation for a transaction from anyone other than the sponsoring broker.
- Noise
The buyer is genuinely satisfied and the amount is modestMotive and size do not change who may pay a sales agent.
- Decides
The sponsoring broker verbally has no objectionTwo provisions, and an oral "no objection" fails both. §1101.651(b) fixes the SOURCE — compensation may come only from the sponsoring broker. 22 TAC §535.3 adds that a sales agent may not receive it except with the sponsoring broker's WRITTEN consent.
May the sales agent accept the check?
AnswerNo. Compensation to a sales agent must come through the sponsoring broker.
WhyThe sales agent acts through the broker, and compensation follows the same path as the authority to act — §1101.651(b) for the source, 22 TAC §535.3 for the written consent.
The trapReading broker consent as a cure. Written broker consent is genuinely required by 22 TAC §535.3 — but it does not fix a payment coming from the wrong source under §1101.651(b). Both must hold, and an oral nod satisfies neither.
Read the governing lesson →
