It’s Time To Hear From You: Proposed Contract Form Changes

Texans now have several proposed form changes to consider, following TREC’s August 2024 meeting. The changes were recommended by the Broker-Lawyer Committee (BLC), which is made up of six lawyers, six brokers, and one public member. They draft forms for the Commission to consider. Once the Commission proposes changes, you have the chance to provide public comment before any changes are adopted.

In light of recent industry changes surrounding broker compensation, Paragraph 8B is changed to add a statement that brokers’ fees are not set by law and are negotiable.

Paragraph 12A(1)(a) and 12A(2) adds that each party pays the brokerage fees that they each have agreed to pay. Paragraph 12A(1)(b) is amended to allow for a specific seller contribution to the buyer’s brokerage fees.

A new Paragraph 12A(1)(c) has been added to separately address other seller contributions (that was previously in Paragraph 12A(1)(b)) and the prior language that specified the order in which any contribution was to be paid, as well as a limitation on the type of fee that could be paid, is removed. Conforming changes are also made in the Amendment to Contract.

The compensation disclosure in the Broker Information section of the contracts (except for the Farm and Ranch Contract) removes the parenthetical referencing the MLS and to add checkboxes to allow for the fee to be reflected either as a percentage or a dollar amount.