You’re probably familiar with showing services—companies you can pay to show a listing to your clients. The rules when you use a service or app are the same as when you directly hire another license holder to show a listing for you. Before using a showing app or service, make sure you are not violating The Real Estate License Act (TRELA) or TREC rules. Consider these questions before proceeding:
Do I need written consent from my broker?
Yes. You need your sponsoring broker’s written consent to get paid or to pay another license holder for brokerage activities, which includes showing properties. And remember, payments received by or paid to a license holder must go through the license holder’s sponsoring broker.
Who does the showing agent represent?
Brokers, either individually or through their sponsored agents, can represent sellers, buyers, or both as an intermediary. There is no non-representation or “showing agent” status recognized in TRELA or TREC rules. Therefore, it is important for the hiring agents and their clients to understand who the showing agent represents when showing a property to a buyer.
The first step is to determine whether the showing agent’s sponsoring broker is already representing either the buyer or the seller. If not, the showing agent is acting as a subagent. This means that the showing agent is not representing the buyer but instead is representing the seller and owes a fiduciary duty to the seller. It is important that the buyer is informed of this relationship and consents to the showing agent’s assistance under these conditions.
When the showing agent’s broker is already representing either the buyer or seller, there is no subagency relationship. Instead, the showing agent owes a fiduciary duty to the client being represented by their sponsoring broker. Still, it is important for the showing agent to disclose to the buyer whether the showing agent is representing the buyer or seller. It is best to make that disclosure in writing signed by the buyer. Agents can use the Representation Disclosure (TXR 1417) for this purpose.
Are any additional disclosures required?
In addition to the showing agent clearly communicating who he or she represents, there may be additional required disclosures.
For example, the showing agent must give the buyer an Information About Brokerage Services (TXR 2501, TREC IABS 1-0) form, unless the showing agent knows for certain the buyer is represented by the hiring agent.
Additionally, if the showing agent is aware of any defects that would be a significant factor to a reasonable buyer, the showing agent must disclose those defects to the buyer.
What are the showing agent’s responsibilities when showing the property?
Agents must always treat parties to a real estate transaction fairly and honestly. Beyond that, the showing agent’s responsibilities to the buyer depend on the capacity in which the showing agent is operating. Agents representing clients must perform the minimum duties outlined in the IABS, which include answering the client’s questions. Showing agents acting as subagents are not required to answer the buyer’s questions since the buyer is not their client. These limitations should be communicated to the buyer prior to the showing.