A Texas sales agent can receive commission from:
Audio Lesson
Duration: 2:40
Question & Answer
Review the question and all answer choices
Directly from the client
CORRECT_ANSWER
Only from their sponsoring broker
Any licensed broker
Texas sales agents cannot receive commissions from any broker other than their sponsoring broker. Compensation must flow through the broker who has the supervisory relationship and responsibility for the agent's activities.
The title company
Title companies play a role in real estate transactions by handling closing and escrow services, but they do not pay commissions to sales agents. Commission payments are specifically governed by the broker-client relationship, not by title companies.
Why is this correct?
In Texas, real estate agents cannot legally receive commissions directly. The Texas Real Estate Commission (TREC) regulations require all compensation to flow through the sponsoring broker, who is ultimately responsible for the agent's actions. This maintains proper supervision and accountability in real estate transactions.
Deep Analysis
AI-powered in-depth explanation of this concept
This question addresses a fundamental principle in real estate agency relationships that impacts how compensation flows in real estate transactions. Understanding this concept is crucial because it underpins the entire structure of real estate brokerage operations in Texas. The question tests knowledge of the agency relationship between sales agents and brokers. In Texas, as in most states, real estate agents must work under the supervision of a licensed broker. This creates a hierarchical structure where the broker is ultimately responsible for all transactions and activities conducted by their agents. When a property sells, the commission is typically paid to the broker, who then distributes it to the agents according to their agreement. This structure ensures regulatory compliance, proper supervision, and financial accountability. The question is straightforward but represents a critical concept that forms the foundation of real estate practice. Students who understand this principle will be better prepared for questions about agency relationships, commission splits, and brokerage operations.
Knowledge Background
Essential context and foundational knowledge
The requirement that commissions flow through the sponsoring broker is rooted in the fundamental structure of real estate regulation. This structure exists because brokers hold higher licensing requirements and assume greater legal responsibilities. In Texas, the Real Estate License Act establishes this framework, recognizing that brokers are in the best position to supervise agents, ensure compliance with laws and regulations, and handle client funds appropriately. This structure has evolved to protect consumers by creating clear lines of responsibility and accountability in real estate transactions.
Think of a sales agent as an employee and the broker as the employer. Just as employees typically receive their paychecks through their company's payroll system, real estate agents receive their commissions through their broker's office.
When you see questions about commission payments, visualize the employer-employee relationship to remember that payments must flow through the broker.
Remember that in real estate, agents work under brokers. When questions ask about commission payments, always select the option that involves the agent's sponsoring broker, as they are the only ones authorized to distribute commissions to agents.
Real World Application
How this concept applies in actual real estate practice
Imagine Sarah, a Texas sales agent, helps a buyer purchase a home. The seller agrees to pay a 3% commission. When the transaction closes, the listing broker sends the full 3% to Sarah's sponsoring broker. The broker then deducts their split (typically 40-50%) and pays Sarah her portion (2-3%). Sarah cannot legally ask the seller or buyer to pay her directly, nor can she receive payment from another broker. This structure ensures proper accounting, regulatory compliance, and supervision throughout the transaction.
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