Texas SB 1968: Buyer Representation Agreement Law (Effective January 1, 2026)
Texas has codified buyer representation requirements into state law with Senate Bill 1968. This law goes beyond NAR rules and has specific requirements that Texas real estate exam takers MUST understand.
Overview of SB 1968
Texas Senate Bill 1968 was signed into law in June 2025 and takes effect January 1, 2026. It modernizes Texas agency law and formally requires written buyer representation agreements.
Key Requirements Under SB 1968
Written Agreement Required Before Substantive Action
The law requires a written buyer-representation agreement before a license holder takes any "substantive action" on behalf of a buyer.
What is "Substantive Action"?
Under SB 1968, substantive actions include:
| Substantive Action | Agreement Required? |
| ------------------- | --------------------- |
| Providing advice about property | Yes ✓ |
| Negotiating on buyer's behalf | Yes ✓ |
| Recommending a purchase price | Yes ✓ |
| Preparing or presenting offers | Yes ✓ |
| Discussing financing options | Yes ✓ |
| Unlocking door to show property | No |
| Providing general market information | No |
What Agents CAN Do Without an Agreement
Importantly, SB 1968 allows agents to:
- Unlock the door to show a property
- Provide general information about the market
- Provide information about their services
- Give the buyer disclosure documents
But once the conversation turns to specific advice or negotiation, a signed agreement is required.
Required Elements of Texas Buyer Agreement
Under SB 1968, the buyer representation agreement must include:
- Services to be provided by the license holder
- Term of the agreement (start and end dates)
- Whether representation is exclusive or non-exclusive
- Compensation terms - specific amount or method
- Conspicuous statement that fees are negotiable
- Disclosure about dual agency if applicable
Texas-Specific Disclosure Requirements
Information About Brokerage Services (IABS)
Texas requires the Information About Brokerage Services form to be provided before substantive discussions. This form explains:
- Types of agency relationships
- Broker responsibilities
- How compensation works
Written Consent for Intermediary
If a broker represents both buyer and seller (intermediary), written consent is required from both parties.
Sample Exam Questions - Texas SB 1968
Question 1
Under Texas SB 1968, which action can a license holder take WITHOUT a signed buyer representation agreement?A. Recommend an offer price
B. Negotiate with the seller's agent
C. Unlock the door to show a property ✓
D. Advise on financing options
Explanation: SB 1968 specifically allows agents to unlock doors without an agreement, but substantive actions require a signed agreement.Question 2
Texas SB 1968 requires buyer representation agreements before taking "substantive action." Which of the following is NOT considered a substantive action?A. Providing advice about a property's value
B. Preparing an offer to purchase
C. Providing general market statistics ✓
D. Recommending a purchase price
Explanation: General market information does not require an agreement; specific advice does.Question 3
Under Texas law, a buyer representation agreement must include all of the following EXCEPT:A. The term of the agreement
B. Whether representation is exclusive
C. The seller's asking price ✓
D. A statement that fees are negotiable
Explanation: The seller's asking price is not a required element of the buyer representation agreement.Question 4
When must a Texas license holder provide the Information About Brokerage Services (IABS) form?A. At closing
B. Before substantive dialogue ✓
C. When the offer is accepted
D. Only if the buyer requests it
Explanation: IABS must be provided before any substantive discussion about real estate.Question 5
A Texas real estate agent meets a potential buyer at an open house. The buyer asks, "Is this house worth the asking price?" What should the agent do?A. Answer the question immediately
B. Decline to answer and explain why a signed agreement is needed first ✓
C. Provide a written estimate
D. Refer them to the listing agent
Explanation: This question asks for specific advice, which is a substantive action requiring a signed buyer representation agreement.Key Differences: NAR Rules vs. Texas SB 1968
| Aspect | NAR Rules (Aug 2024) | Texas SB 1968 (Jan 2026) |
| -------- | --------------------- | -------------------------- |
| Effective Date | August 17, 2024 | January 1, 2026 |
| Source | Industry self-regulation | State law |
| Unlocking doors | Requires agreement | Does NOT require agreement |
| Enforcement | NAR/MLS sanctions | State licensing board |
| Penalties | MLS fines, NAR discipline | License suspension/revocation |
Penalties for Non-Compliance
Violations of SB 1968 can result in:
- Disciplinary action by TREC (Texas Real Estate Commission)
- License suspension or revocation
- Fines up to $5,000 per violation
- Civil liability for damages
How to Prepare for the Texas Exam
For the Texas real estate exam, make sure you understand:
- Definition of "substantive action"
- What can/cannot be done without agreement
- Required elements of the agreement
- IABS disclosure requirements
- Difference between NAR rules and Texas law
Timeline Summary
| Date | Event |
| ------ | ------- |
| March 2025 | SB 1968 introduced |
| June 2025 | Bill signed into law |
| January 1, 2026 | Law takes effect |
| 2026 onwards | Included in Texas real estate exam |
Practice More
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Summary
Texas SB 1968 is an important new law that every Texas real estate agent must understand. Key takeaways:
- Effective January 1, 2026
- Written agreement required before substantive action
- Agents CAN unlock doors without agreement
- Must include compensation terms and negotiability statement
- Violations can result in license discipline
This will definitely be on your Texas real estate exam!
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