Texas Real Estate Sales Agent ExamReal Estate PracticeMedium
A newly licensed real estate agent in Texas is approached by a buyer who wants to pay the commission directly to the agent rather than through the sponsoring broker, as the agent is an independent contractor. How should the agent proceed?
- ADecline the direct payment and inform the buyer that all commissions must be paid to the sponsoring broker.
- BAdvise the buyer to make the check out to the agent, but endorse it over to the sponsoring broker.
- CAccept the payment directly, depositing it into a separate business account.
- DAccept the payment and immediately transfer it to the sponsoring broker's trust account.
Show answer & explanationAnswer & explanation
Correct answer: A. Decline the direct payment and inform the buyer that all commissions must be paid to the sponsoring broker.
In Texas, a sales agent cannot receive compensation directly from a client. All compensation must be paid to their sponsoring broker, who then compensates the agent according to their agreement.
Why the other options are wrong
- B. This is an improper workaround; the check should be made out to and received by the sponsoring broker from the outset.
- C. This is incorrect; agents cannot receive direct payment for services requiring a license.
- D. While the money needs to go to the broker, the agent cannot accept it directly first.
Agent Compensation (Texas)
In Texas, a licensed real estate sales agent may only receive compensation for real estate brokerage services from their sponsoring broker, not directly from clients.
- Applies to all licensed activities.
- Broker is responsible for disbursing funds to the agent.
- Ensures proper oversight and adherence to TREC regulations.
Memory trick: Agent's pay path: always through the broker's gate.