What Brokers, Agents, and Teams Must Know — Effective January 1, 2026
On January 1, 2026, Senate Bill 1968 took effect — fundamentally changing how Texas real estate licensees interact with buyers. This is not a minor policy tweak. It is a structural shift in agency law that affects every showing, every signed agreement, and every enforcement interaction with TREC.
If your brokerage has not updated its forms, workflows, and training to reflect these changes, you are already exposed.
What SB 1968 Changed
Before SB 1968, Texas agents regularly showed homes, offered advice, and even drafted offers for buyers without a written agreement in place. That practice is now prohibited for residential transactions involving single-family homes, duplexes, triplexes, quadplexes, and condos where title transfers to the buyer.
Under the new law, a written buyer representation agreement — or a written non-representation agreement — must be executed before any substantive action is taken. Substantive action includes providing advice, opinions, negotiation assistance, or drafting offers. Simply unlocking a door for access purposes does not require a full representation agreement, but it requires a specific written notice and a non-representation agreement that cannot exceed 14 days and must be non-exclusive.
What Must Be in Every Written Agreement
Under SB 1968, every buyer representation agreement must include:
- The services the broker agrees to provide
- The termination date (no more than 14 days for non-representation agreements)
- Whether the agreement is exclusive or non-exclusive
- Whether the broker represents the buyer or does not represent the buyer
- The amount or rate of compensation and how it is determined
- Conspicuous language stating that broker compensation is not set by law and is fully negotiable
Subagency Has Been Eliminated
SB 1968 also eliminates subagency in Texas real estate transactions — across all property types, including residential, commercial, vacant land, and farm and ranch. Under the prior framework, an agent could show a buyer a property while technically representing the seller through a subagency relationship. That arrangement created consumer confusion and liability exposure. It is now gone.
Going forward, a Texas licensee either represents the buyer, represents the seller, or acts as an intermediary. There is no middle ground.
Enforcement Has Real Teeth
TREC has expanded authority under the new law to discipline licensees who violate the written agreement requirement. Agents who show residential property or submit offers without the required agreement in place face potential suspension or revocation of their license under amended Section 1101.652 of the Texas Real Estate License Act.
For brokers and team leaders, this means compliance monitoring is no longer optional. If your agents are still operating under old habits — verbal agreements, implied representation, or “we’ll sign later” approaches — your brokerage is at risk.
What Brokers and Teams Should Be Doing Now
- Audit your forms: Confirm that buyer representation agreements include all required elements and clearly state compensation terms.
- Update open house procedures: Agents hosting open houses for another brokerage must comply with the non-representation agreement and notice requirements.
- Train your team: Agents need to understand the distinction between showing-only services and full representation — and the legal limits of each.
- Document everything: If the agreement is not in writing, it does not exist. Create a culture of written, signed agreements before any substantive engagement.
- Review your broker policies: Your written policies and procedures should reflect SB 1968 requirements. Brokers are responsible for the compliance of the agents they supervise.
The transition period is over. The law is in effect. Brokers and team leaders who treat this as a compliance checkbox exercise will find out — the hard way — that TREC takes these requirements seriously.
About The Brewer Firm, PLLC
The Brewer Firm provides strategic real estate, transactional, and risk-management counsel throughout Texas. Whether you are a broker, investor, property manager, or business owner, we help you structure operations so that problems are prevented — not just defended. Contact us for a free consultation at 210-900-4640 or info@brewerfirmpllc.com.