In Texas, real estate licensing is evolving. At its November 4, 2024, meeting, the Texas Real Estate Commission (TREC) adopted revisions to its promulgated contract forms, which become mandatory for transactions beginning January 3, 2025. Meanwhile, the Texas Legislature passed Senate Bill 1968, which modernizes agency law (including buyer representation agreements and disclosure requirements) and takes effect January 1, 2026. In addition, TREC is implementing rule changes that will increase broker‑licensing experience requirements, update broker‑responsibility education, and revise the ‘Information About Brokerage Services’ disclosure form. This guide summarizes what is changing, why it matters, and what license‑holders should do now to stay compliant and competitive.

Updated TREC Contract Forms (mandatory January 3, 2025)

In November 2024, the Texas Real Estate Broker–Lawyer Committee recommended sweeping updates to TREC’s promulgated sales contracts. The commission adopted the revisions and made the new forms mandatory for transactions starting January 3, 2025. The major forms affected include the Unimproved Property Contract; One to Four Family Residential Contract (Resale); New Home Contracts (both incomplete and completed construction); Residential Condominium Contract (Resale); and the Farm & Ranch Contract:

Paragraph 4 – Natural Resource Leases

Under Texas law (effective June 18, 2023 via SB 785), subsurface ‘geothermal energy and associated resources’ are treated as real property of the surface‑estate owner unless the conveyance or lease language expressly excludes it. To align the form with this law, many TREC‑promulgated contracts now include the term ‘geothermal’ within the definition of Natural Resource Leases. Sellers should disclose any recorded geothermal leases or rights reservations; buyers should verify whether geothermal rights are being conveyed or reserved, and assess whether they will receive those rights.

Paragraph 6C(1) – T‑47.1 Declaration option

Previously, sellers providing an existing survey were required to deliver a notarized T‑47 affidavit. Paragraph 6C(1) now allows a seller to deliver a T‑47.1 Declaration, which does not require notarization. The change implements a Texas Department of Insurance rule that took effect in late 2024 and streamlines transactions where an existing survey is used.

Paragraph 6C(2) – Survey procedures

The contracts formerly read “Buyer shall obtain a new survey.” To give cash buyers and lenders more flexibility, this language has been replaced with “Buyer may obtain a new survey”. Importantly, if a buyer chooses not to get a new survey, they cannot terminate the contract under Paragraph 2B of the Third‑Party Financing Addendum due to survey issues. There is no longer a “no survey required” checkbox; instead, the buyer simply elects whether to procure a survey.

Paragraph 6E(11) and 6E(12) – Mold remediation and notices

Texas law requires sellers to provide buyers with any mold remediation certificate issued within the preceding five years. New Paragraph 6E(11) explicitly directs sellers to deliver those certificates. Paragraph 6E(12) now lists specific examples of mandatory notices (e.g., lead‑based paint, property owners’ association) and warns that failure to provide required notices may give buyers remedies, including contract termination. This update reminds brokers to use the correct addenda for water districts, septic systems and other disclosures.

Paragraph 12 – Broker compensation and seller contributions

Compensation transparency is a major theme in 2025. Paragraph 12 now clarifies that each party pays the brokerage fees they have agreed to. Sellers can contribute directly to a buyer’s broker fee via a specified dollar amount or percentage in Paragraph 12A(1)(b). A new Paragraph 12A(1)(c) allows sellers to contribute toward other buyer expenses (such as closing costs) without being limited by previous ordering rules. The Broker Information section adds checkboxes so the fee can be disclosed as either a percentage or a dollar amount, reinforcing that commissions are negotiable.

Other notable contract changes

• Paragraph 20 – Federal Requirements: The title is updated to “Federal Requirements,” and the Farm and Ranch Contract adds Paragraph 20B, which references obligations under the Agricultural Foreign Investment Disclosure Act.
• Third‑Party Financing Addendum: Paragraph 2A (Buyer Approval) now requires both a notice of termination and a copy of the lender’s written statement when terminating for lack of buyer approval. Paragraph 2B modifies the timing of termination notices to align with other contract provisions.
• Back‑Up Contract Addendum: The earnest‑money and option‑fee provisions have been clarified to mirror Paragraph 5 of the primary contract and specify when additional fees must be paid.

These revisions aim to improve clarity, align the contracts with recent legislation and make compensation disclosures more transparent. Brokers should update templates, educate their teams and stop using outdated forms by January 3 2025.

SB 1968: New Buyer‑Representation Rules (effective January 1 2026)

Senate Bill 1968, passed in 2024 and effective January 1 2026, modernizes the Texas Real Estate License Act. The law introduces stricter requirements for buyer agency agreements and draws clear boundaries between “showing only” and full representation. According to industry reports, licensees historically could show properties and even write offers without a signed buyer‑broker agreement. SB 1968 changes this practice.

Mandatory written agreements

Under SB 1968, a written buyer‑representation agreement is required before any substantive action. Real‑estate agents may still unlock a door for a prospective buyer without a signed agreement, but they cannot provide advice, opinions or negotiate offers. The agreement must outline:

• Services provided (e.g., showing homes, preparing and submitting offers);
• Termination date and whether the relationship is exclusive or non‑exclusive;
• Compensation terms and a disclosure that commissions are negotiable and not set by law;
• Consumer notice requirements, such as delivering the Information About Brokerage Services form.

Failing to have a signed agreement before drafting or negotiating an offer constitutes a violation; TREC may discipline agents or suspend their licenses. The law applies to residential transactions (one‑ to four‑unit properties and condos) but not to raw land or commercial deals. A new “showing only” category allows agents to provide access without representation, but they must refrain from offering opinions and still deliver the IABS notice.

Why SB 1968 matters

Lawmakers and industry leaders pushed for SB 1968 to reduce consumer confusion and align Texas rules with the NAR commission‑settlement framework. By requiring upfront agreements, buyers know how agents will be paid and can negotiate fees, while brokers gain clearer contractual protection. Brokers and team leaders should revise buyer‑representation agreements, train agents on “showing only” procedures and monitor compliance to avoid disciplinary action.

Broker Responsibility Rule and Experience Requirements

SB 1968 also triggers changes to TREC’s Broker Responsibility Course and broker‑licensing requirements. A proposed amendment to 22 TAC §535.56 reflects these statutory changes. The rule’s preamble notes that SB 1968 requires all brokers to complete the six‑hour Broker Responsibility Course, regardless of whether they sponsor sales agents, and that broker‑license applicants must complete the course before licensure. Additionally, the broker‑licensing standard is being raised:

• Experience points: The minimum experience points required for a broker license increases from 360 to 720 points. This change emphasizes practical transaction experience.
• Education credit cap: A bachelor’s degree previously counted as all 630 hours of “related education.” Under the proposal, degree credit is capped at 300 hours, and the remaining hours must come from real‑estate coursework. Applicants can substitute extra experience for up to 300 hours of education.
• Property‑management & supervision points: Experience calculations now consider property management on a per‑property‑per‑year basis and award additional points for delegated supervision of agents.

Collectively, these amendments underscore TREC’s emphasis on hands‑on experience and supervision skills. Brokers who plan to upgrade to a broker license or renew on or after January 1 2026 should ensure they meet the new experience criteria and complete the Broker Responsibility Course.

Continuing Education (CE) and License Renewal

Texas real‑estate licensees must complete continuing education every two years. For second and subsequent renewals, licensees must complete 18 hours of CE, including 4 hours of Legal Update I, 4 hours of Legal Update II and 3 hours of contract‑related coursework. The remaining hours may be electives. In addition, the following licensees must complete the 6‑hour Broker Responsibility Course:

• Brokers who sponsor one or more sales agents during the current license period;
• Designated brokers for business entities that sponsor sales agents;
• Sales agents who act as delegated supervisors for six months or more.

Continuing education must be completed before the license expiration date, which occurs every two years on the license anniversary. First‑time sales‑agent renewals require completion of 90 hours of Sales Apprentice Education plus Legal Update I & II, and supervisors must take the Broker Responsibility course.

Information About Brokerage Services (IABS) Form Update

As lawsuits over brokerage commissions have made headlines, regulators are revising disclosure documents to stress that fees are negotiable. Proposed changes to the Information About Brokerage Services (IABS) form will add explicit language stating that real‑estate commissions are not set by law and are fully negotiable. The update aims to eliminate misconceptions that brokerage fees are standard or fixed, empowering consumers to negotiate terms. Brokers and agents should adopt the revised IABS form when it becomes available and incorporate a discussion of compensation options early in client interactions.

Why These Changes Matter

Licensing and exam preparation

The revised contract forms and new broker‑education requirements will be reflected in licensing courses and exams. Aspiring agents studying how to become a real‑estate agent in Texas must understand the 2025 forms, compensation structures and SB 1968 boundaries. Failing to learn the new rules may delay licensure or lead to disciplinary action.

Consumer transparency and professional standards

Collectively, the 2025–2026 reforms strengthen transparency and raise professional standards. The new forms define geothermal rights, require mold‑remediation disclosure and list specific notices, ensuring buyers receive critical information. SB 1968 and the revised IABS form give buyers more clarity about representation and compensation, fostering trust. The broker‑responsibility and experience requirements reinforce that brokers must supervise diligently and maintain documented procedures.

Brokerage best practices

Brokerages must adapt their workflows and training. They should:

• Adopt the new forms immediately, ensuring agents understand the T‑47.1 declaration, survey options, mold‑remediation disclosure and revised compensation paragraphs.
• Revise representation agreements to reflect SB 1968’s mandatory written agreement and compensation‑negotiability requirements.
• Document “showing only” interactions by having policies that restrict agents from giving advice without a signed agreement and require delivery of the IABS notice.
• Track continuing education and broker‑responsibility course completion for every license holder. The REALM online licensing system (slated to launch in 2025) will provide online renewal and compliance tracking; brokers should register early.

Next Steps for Texas Licensees

1. Review and use the new contract forms. Download the January 2025 versions and ensure all offers after the mandatory date use the updated language on geothermal rights, surveys, mold remediation and compensation.
2. Attend training on SB 1968. Take courses or webinars explaining how to draft buyer‑representation agreements, handle “showing only” situations and deliver required notices.
3. Complete continuing education and the Broker Responsibility Course. Check your license expiration date, finish the 18‑hour CE and, if you sponsor agents or supervise, complete the six‑hour Broker Responsibility course. Brokers applying for licensure after January 1 2026 must complete the course before receiving their license.
4. Update brokerage policies and documents. Revise internal templates for buyer‑representation agreements, listing agreements and compensation disclosures. Include IABS forms that emphasize negotiability of fees.
5. Monitor TREC announcements. TREC may issue additional rules or clarifications related to SB 1968, broker responsibility or the REALM system. Check the commission’s website regularly and participate in public‑comment opportunities.

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