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#122836 - 08/03/06 11:02 PM Subagency in Texas-Please Explain!
Clear Lake Houston Offline
Member

Registered: 07/24/06
Posts: 68
Loc: Houston, TX
I'm a little confused on subagency (Texas). If a broker accepts subagency and I, as buyers agent bring a buyer, how can I also act as a subagent to the listing broker? If I bring a buyer and have a Buyer Representation Agreement, don't I have a fiduciary role with the buyer? I'm confused obviously on subagency and want to make sure I thoroughly understand before taking the state exam....Thanks!
_________________________
Steve Clement, REALTOR®
United Texas Realtors
www.ClearLakeHomeTeam.com
832-651-1433 Direct
steve@ClearLakeHomeTeam.com

Clear Lake/NASA area of Houston, including League City, Friendswood, Seabrook and north Galveston County.

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#122837 - 08/04/06 01:03 AM Re: Subagency in Texas-Please Explain!
TexasHorseLady Offline
Member

Registered: 12/06/05
Posts: 75
Loc: Central Texas
You can't act as both. If you have a Buyer's Rep agreement, you aren't a subagent. If you *don't* have a buyer's rep agreement, then you are automatically a subagent.

In brief, in Texas, all agents work for the seller and have a fiduciary responsibility to the seller and protecting the seller's interest until a buyer signs a buyer's rep agreement with them, at which time that fiduciary responsibility transfers to the buyer, not the seller.

If you work for the broker who has the listing agreement with the Seller, you are an agent. If you work for any other broker and don't have a buyer's rep agreement with a buyer, you are a subagent of the original broker.

Clear as mud? :p

This IS important to know because you are required by law to explain it upon first substantive meeting (basically, first meeting in the flesh) with a customer so that they will know who you work for. There's a form that explains it - we get the buyer/seller to sign it and leave them a copy so there's no confusion as to whether or not we complied with that law.

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#122838 - 08/04/06 02:34 PM Re: Subagency in Texas-Please Explain!
Jflynn Offline
Member

Registered: 07/16/04
Posts: 2899
Quote:
Originally posted by TexasHorseLady:
If you have a Buyer's Rep agreement, you aren't a subagent. If you *don't* have a buyer's rep agreement, then you are automatically a subagent.
Show me anywhere in the Texas Real Estate Act or Texas court decision where this is so. I do not believe it to be so. Furthermore, if you've done any deals here in Texas you'll remember that page 8 of the promulgated contract has checkboxes to show who's whose agent and a buyers rep is not required.
_________________________
Dallas Real Estate

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#122839 - 08/04/06 07:05 PM Re: Subagency in Texas-Please Explain!
TexasHorseLady Offline
Member

Registered: 12/06/05
Posts: 75
Loc: Central Texas
Actually, jflynn, on that point you're correct. (I went back and checked the chapter on subagency in my textbook, rather than relying on your statement.) You are not automatically a subagent, and agencies can (presumably with the knowledge and on the direction of the Seller) decide not to offer subagency, which, of course, seriously limits the exposure of the Seller's property and thus is, usually, not in the Seller's best interests, although it does mean that the chances are greatly increased that the *broker's* best interests will be served by getting both sides of the deal.

However, I hold by my statement that, outside of a Buyer's Rep Agreement, all agents in Texas are, by law, considered to be representing the Seller and the Seller's interests. THAT I have had drilled into me by my broker, by my instructor (who had decades of practical - successful - experience as a broker as well as an instructor), and by my ethics course instructor, is the case and must be conveyed to the customer upon first substantive meeting.

Which means that the Information About Brokerage Services form (which I have in front of me) is misleading (or, at best, unclear).

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#122840 - 08/04/06 07:44 PM Re: Subagency in Texas-Please Explain!
pgtips Offline
Member

Registered: 04/03/06
Posts: 12
Loc: San Antonio, TX
I absolutely agree with TexasHorseLady regarding the fact that all agents in Texas represent the Seller unless the have a Buyers Rep agreement with the Buyer. Which is why an IBO explaining Agency is given to customers on your first face to face meeting.
_________________________
People who don't Think probably don't have Brains; rather, they have grey fluff that's blown into their heads by mistake.” Winnie the Pooh

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#122841 - 08/04/06 11:03 PM Re: Subagency in Texas-Please Explain!
Jflynn Offline
Member

Registered: 07/16/04
Posts: 2899
Quote:
Originally posted by pgtips:
I absolutely agree with TexasHorseLady regarding the fact that all agents in Texas represent the Seller unless the have a Buyers Rep agreement with the Buyer.
I challenge either of you to show us something in writing from a credible and official source (such as a court ruling, TAR, or the Texas Real Estate Act) that says this.
_________________________
Dallas Real Estate

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#122842 - 08/05/06 12:39 AM Re: Subagency in Texas-Please Explain!
TexasHorseLady Offline
Member

Registered: 12/06/05
Posts: 75
Loc: Central Texas
jflynn, where do you practice real estate? (Just got in, it's late, I'll go look it up tomorrow for you.)

However, a quick glance at my Texas Real Estate Agency book appendix shows several legal cites regarding this.

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#122843 - 08/05/06 12:49 AM Re: Subagency in Texas-Please Explain!
atxdude Offline
Member

Registered: 07/17/06
Posts: 49
Loc: Austin
Jflynn,

Did someone [censored] in your tea today? Why are you so resentful of buyer agency agreements? It's for everyone's good.

If there is no agreement, there is no proof that you represent the buyer. Look at the Info about brokerage services page. The last paragraph clearly tells the client that they should get a written agreement and that paying someone commission doesn't NOT make them your agent.

So, if you don't have a buyer rep agreement, you could be on either side. In court, anyone who sues you can argue that you're on whichever side makes their case more convincing and there's nothing you can do about it. An angry buyer can claim that you were conspiring with the seller to misrepresent the condition of the house. A seller can claim that you're his subagent and therefore had no right to advise the buyer on how to make the lowest possible offer.

Without an agreement, you're toast in either case. Just because nobody here has the legal expertise to whip out a past case doesn't mean it can't happen. It's also ethical to commit to the buyer by signing the agreement, and protect your own a$$ from cheating buyers who use you and leave at the last moment to let their agent friend get the commission.
_________________________
Austin Real Estate

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#122844 - 08/05/06 01:18 AM Re: Subagency in Texas-Please Explain!
Clear Lake Houston Offline
Member

Registered: 07/24/06
Posts: 68
Loc: Houston, TX
I never realized I'd stir up a hornet's nest by asking what was supposed to be a simple question.
As a soon-to-be newbie, you can see why I was confused. The way I understand it is that I am a seller's agent thru subagency unless I have a buyers representation agreement. Also,there are instances in which a broker has an listing which doesn't include subagency (as noted on the MLS sheet) and the agent from the other broker must request subagency in order to show the home. Apparently those listings are far and few between and are most likely requested by the client.
Is this about right?
_________________________
Steve Clement, REALTOR®
United Texas Realtors
www.ClearLakeHomeTeam.com
832-651-1433 Direct
steve@ClearLakeHomeTeam.com

Clear Lake/NASA area of Houston, including League City, Friendswood, Seabrook and north Galveston County.

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#122845 - 08/05/06 01:22 AM Re: Subagency in Texas-Please Explain!
atxdude Offline
Member

Registered: 07/17/06
Posts: 49
Loc: Austin
LOL, hornet's nest. There are many agents and a lot of people in general who view buyer's rep agreements as something unethical and sleazy. It's as if an agent wants to tie them down, force them to work with him only and then take advantage of them.

To answer your question, the MLS should have a buyer's agent commission and a subagent commission. Most sellers don't need two agents working for them, so they'll discourage it by offer no commission.
_________________________
Austin Real Estate

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#122846 - 08/05/06 01:38 AM Re: Subagency in Texas-Please Explain!
TexasHorseLady Offline
Member

Registered: 12/06/05
Posts: 75
Loc: Central Texas
Actually, the reason that many people don't offer a subagent commission has to do with an outdated familiarity with real estate liability law. At one time, brokers could be held liable for the actions/statements of another broker's agent who was acting through subagency. However, that was changed in the 1990's (1991?) and some folks just haven't caught up.

And I do wonder at people who would view buyer's rep agreements as unethical. Coming as I do from a legal background (not an attorney, but a legal assistant), it's clear to me that they are an attempt to make clear to all parties in writing who represents who and who has a fiduciary responsibilit to which party. That's hardly unethical or sleazy - in fact, NOT having them available to make this clear would seem to be, to me, the unethical or sleazy alternative.

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#122847 - 08/05/06 09:17 PM Re: Subagency in Texas-Please Explain!
Jflynn Offline
Member

Registered: 07/16/04
Posts: 2899
I don't have a problem with BAs and no one peed in my tea. However, I don't believe it's true in Texas that you're automatically a subagent unless you have a BA.

If it is in fact true and I'm wrong ... fine, show me in writing from an official source where it says so. The Texas Real Estate Act would be a good start: www.trec.state.tx.us/formslawscontracts/rules_codes/rela.asp
_________________________
Dallas Real Estate

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#122848 - 08/05/06 10:55 PM Re: Subagency in Texas-Please Explain!
TexasHorseLady Offline
Member

Registered: 12/06/05
Posts: 75
Loc: Central Texas
jlfynn, you might want to read the previous posts before making such demands. In my post of last night (9 posts above this one), I state:

"Actually, jflynn, on that point you're correct. (I went back and checked the chapter on subagency in my textbook, rather than relying on your statement.) You are not automatically a subagent, and agencies can (presumably with the knowledge and on the direction of the Seller) decide not to offer subagency, which, of course, seriously limits the exposure of the Seller's property and thus is, usually, not in the Seller's best interests, although it does mean that the chances are greatly increased that the *broker's* best interests will be served by getting both sides of the deal."

I also ask, in a later post, where you practice real estate (and, evidently, law).

And I also mention that there are several (about a page's worth) legal case cites in the back of my Texas Real Estate Agency textbook regarding just this topic.

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#122849 - 08/05/06 11:39 PM Re: Subagency in Texas-Please Explain!
Jflynn Offline
Member

Registered: 07/16/04
Posts: 2899
I have a realty practice in Dallas. I'm not a lawyer, not sure where you got that, but I do believe that the only official sources for such legal answers lie in printed law (such as TRELA) and in precedent (court rulings).

A state-approved prelicensing textbook is the next best thing and I'm generally inclined to believe what I read in such texts, but ultimately even such a textbook is not an official source.

On a related note I don't agree with your statement that an agency not offering subagency seriously limits the exposure for the seller, at least here in Dallas where it's exceedingly rare that a subagent procures buyers for any given listing. The buyers are overwhelmingly delivered by a buyer agent, and less frequently by the listing agent as an intermediary (and by lisyting "agent" I of course mean the listing broker who is acting as the agent and not necessarily the same human sales associate).
_________________________
Dallas Real Estate

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#122850 - 08/05/06 11:44 PM Re: Subagency in Texas-Please Explain!
Jflynn Offline
Member

Registered: 07/16/04
Posts: 2899
Quote:
Originally posted by Clear Lake Houston:
The way I understand it is that I am a seller's agent thru subagency unless I have a buyers representation agreement.
A LOT of agents in Texas believe that to be so, but I've yet to see it in writing from an official source (written law or court decision). I think it's a myth that keeps getting perpetuated because it sounds good and helps agents get signatures on BAs. I even used to think it was true myself so it's not like I'm up on a high horse here.

I could be wrong of course, but I've yet to see anyone produce something in writing to prove me otherwise and I've been down this road more than once and not just online. If you have an instructor/broker/lawyer/hairdresser telling you this you might ask them to show you where it says so in a court decision or TRELA. smile
_________________________
Dallas Real Estate

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