Does Texas allow dual agency?

No. Texas replaced dual agency with the intermediary structure under TRELA. A broker may act as intermediary between a buyer and seller it represents, but only with written consent from both parties. When intermediary status is in effect, the broker is not acting as a single agent for either party; the broker is neutral, and any communication of material information must follow the intermediary rules. The broker may, with party consent, appoint one associated license holder to communicate with and advise the buyer and another to communicate with and advise the seller — this is the intermediary-with-appointments model, and it is the closest Texas comes to anything resembling traditional dual representation.

When must the IABS form be provided?

At the first substantive dialogue about a specific property with a party the license holder does not already represent. A casual greeting at an open house is not substantive dialogue; discussing price, terms, condition, or financing is. The updated IABS notice required as of January 1, 2026 also reflects new non-representation and written-agreement concepts under SB 1968, so the form a candidate may have seen in earlier coursework is not the form TREC currently requires.

Does compensation determine representation?

No. A license holder may be paid through a transaction without representing the party who benefits from that payment, and the party who pays the license holder is not automatically that license holder's client. Representation depends on the brokerage relationship, written agreements, and required disclosures — not simply on which side pays compensation. The exam tests this principle by describing a payment flow and asking who the license holder represents; the correct answer requires looking at the agreement, not the check.

Can an intermediary disclose what the buyer is willing to pay?

Not without written permission. An intermediary may not disclose to either party that the other will accept different terms unless authorized in writing by the party whose information it is. This restriction is a defining feature of the intermediary model and a frequent exam item — the right answer is almost always that the intermediary stays silent absent written authorization.

Texas Real Estate Agency & Intermediary — Study Guides & Practice Questions

Texas Real Estate Agency & Intermediary

Agency rules govern who a Texas real estate license holder represents, what duties that representation creates, and how those duties are disclosed. The exam tests this module heavily — and it tests it differently from how generic national prep materials present it. Texas does not use the traditional dual-agency framework. Instead, Texas uses an intermediary statute under the Texas Real Estate License Act (TRELA), and the Information About Brokerage Services (IABS) form is a mandatory written notice that explains brokerage-service relationships and disclosure rules — the agency relationship itself is created by the brokerage relationship and the written representation agreements that go with it. Senate Bill 1968, effective January 1, 2026, updated the IABS to introduce a non-representation status and written-agreement requirements for buyer representation; the same legislation removed references to subagency from TRELA. Candidates who studied for the exam before 2026 using older materials are at the highest risk of losing points here, because the rules they memorized about dual agency and subagency no longer reflect current Texas law. Expect questions on how a fiduciary relationship is formed and ended, when the IABS must be delivered, what a broker may and may not do as an intermediary, the difference between a broker who appoints associated license holders and one who does not, and how compensation is fundamentally separate from representation.

Key Subtopics

Fiduciary duties owed to a client (OLD CAR: obedience, loyalty, disclosure, confidentiality, accounting, reasonable care). These are tested as a memorized set, and exam questions frequently describe a scenario and ask you to identify which specific duty was breached.
Intermediary brokerage under TRELA §1101.559 and the option to make written appointments. The exam tests both the no-appointments version (the broker remains neutral) and the with-appointments version (associated license holders are appointed to communicate with and advise the respective parties).
The updated IABS notice — when it is required, who delivers it, what counts as substantive dialogue, and how the 2026 non-representation and written-agreement framework changed older assumptions. Watch for trap questions that describe pre-2026 practice as if it were still valid.
Single agency vs. dual agency vs. Texas intermediary — what each one means in practice. The exam expects you to recognize that traditional dual agency, where one license holder simultaneously represents both buyer and seller as their agent, is not the Texas model.
Creating and terminating an agency relationship (express, implied, ratified). Under SB 1968, written-agreement requirements make older implied-agency assumptions much less reliable for exam purposes.
Representation vs. compensation — why payment does not determine whom a license holder represents. This is one of the most common exam traps: the question describes who pays whom, and the wrong answer assumes representation follows the money.

Study This Cluster

Work through the deep-dive articles for the topics you find hardest, then test yourself against the cluster's practice set. The articles cover the actual statute and rule language Texas uses, not generic national rules — and they reflect the 2026 SB 1968 changes, so the duties, disclosures, and triggers you study will match what TREC tests.

Agency & Fiduciary Duties — the six duties and the most-tested breach scenarios.
Intermediary vs. Dual Agency — how Texas differs from dual-agency states.
Listing Agreements: Types and Terms — where the agency relationship is documented.
Agency & Intermediary Practice Questions — timed practice with full explanations.

Frequently Asked Questions

Does Texas allow dual agency?: No. Texas replaced dual agency with the intermediary structure under TRELA. A broker may act as intermediary between a buyer and seller it represents, but only with written consent from both parties. When intermediary status is in effect, the broker is not acting as a single agent for either party; the broker is neutral, and any communication of material information must follow the intermediary rules. The broker may, with party consent, appoint one associated license holder to communicate with and advise the buyer and another to communicate with and advise the seller — this is the intermediary-with-appointments model, and it is the closest Texas comes to anything resembling traditional dual representation.
When must the IABS form be provided?: At the first substantive dialogue about a specific property with a party the license holder does not already represent. A casual greeting at an open house is not substantive dialogue; discussing price, terms, condition, or financing is. The updated IABS notice required as of January 1, 2026 also reflects new non-representation and written-agreement concepts under SB 1968, so the form a candidate may have seen in earlier coursework is not the form TREC currently requires.
Does compensation determine representation?: No. A license holder may be paid through a transaction without representing the party who benefits from that payment, and the party who pays the license holder is not automatically that license holder's client. Representation depends on the brokerage relationship, written agreements, and required disclosures — not simply on which side pays compensation. The exam tests this principle by describing a payment flow and asking who the license holder represents; the correct answer requires looking at the agreement, not the check.
Can an intermediary disclose what the buyer is willing to pay?: Not without written permission. An intermediary may not disclose to either party that the other will accept different terms unless authorized in writing by the party whose information it is. This restriction is a defining feature of the intermediary model and a frequent exam item — the right answer is almost always that the intermediary stays silent absent written authorization.

Bottom Line

Agency is one of the most heavily tested modules on the Texas real estate exam, and the Texas-specific intermediary framework — together with the SB 1968 updates that took effect January 1, 2026 — is where most candidates lose points. Master the IABS triggers, the six fiduciary duties, the intermediary-versus-dual-agency distinction, and the representation-versus-compensation rule, and you will handle this cluster confidently. Before exam day, run a quick self-test: given a scenario describing who pays whom, can you correctly identify the represented party from the written agreement rather than the payment flow? If yes, you have the central principle. For the full module weighting, see the Texas exam blueprint.