skip navigation and go to content
Texas Real Estate CommissionMy License Online ServicesTexas Real Estate Commission

Sales / Broker Inspector E.R.W.

Complaints/Consumer Info. Main Page
How to File a Complaint
Disciplinary Actions
Enforcement FAQs
Real Estate License Act
TREC Rules
Consumer Information
Consumer Alerts!
A Guide for Buyers and Sellers of Real Estate
Agreed Judgment Review Form
Model Application for the Real Estate Recovery Trust Account
Model Application for the Real Estate Inspection Recovery Fund
Texas Financial Toolbox
Texas Homebuyers U
Texas Department of Housing and Community Affairs Programs
Low Interest Loans for Veterans
General FAQs (Frequently Asked Questions)
Residential Service Company Program
Federal Consumer Information Center
HUD Fair Housing Information
Home Buying and Selling: U.S. Dept. of HUD web site
  KEY To Symbols
= Page is in area (folder tab) of this color
= Adobe PDF file format
= Web site external to TREC
blank one pixel image

Home Ownership and Property Investment

A Guide for Buyers and Sellers of Real Estate in Texas

TREC's Mission

The Texas Real Estate Commission (TREC) offers assistance to buyers and sellers of real estate to assure that transactions are conducted properly. TREC's mission as a state agency is to protect consumers from illegal real estate transactions; to provide for the availability of competent real estate professionals; and to encourage a robust economic climate that will enhance home ownership and property investment.

This brochure provides suggestions that can help eliminate problems that could ruin the successful purchase of a home.

Dealing With Qualified Real Estate Professionals

Buyers and sellers of property should make certain that real estate professionals with whom they deal are legally qualified to offer brokerage services and are licensed by the Texas Real Estate Commission. Information on all license holders can be found at TREC's web site.

Under provisions of The Texas Real Estate License Act, TREC's jurisdiction extends to real estate brokers and salespersons, real estate inspectors, Easement Or Right-of-Way agents, residential service (home warranty) companies, and developers who register timeshare property for sale within the state. TREC also oversees proprietary schools and instructors who offer pre-licensure and continuing education (MCE) courses.

Checklist For Consumers

Licensed real estate professionals are expected to be reputable in their business affairs. Before establishing a business relationship however, TREC advises buyers and sellers to check on a number of items.

  • In the initial meeting, be sure the broker or salesperson fully explains whom he or she will represent in the prospective transaction. If a broker proposes to represent each party as an intermediary, written consent from both buyer and seller must be given in order to act in that capacity. A license holder should provide you with the "Information About Brokerage Services" brochure.

  • If you are meeting at the broker's office or branch office, observe that the Consumer Information Form 1-1 is prominently displayed in the office as required. Contact TREC or use the TREC web site to do a License Holder Info Search if questions remain regarding a license holder's qualifications.

  • Check with TREC by phone (1-512-936-3000) regarding whether there is a record of disciplinary actions against the license holder from previous business dealings (using the License Holder Info Search, above, will indicate if there are any disciplinary actions).

  • Ask enough questions regarding the transaction to become satisfied that your broker or salesperson is knowledgeable and will abide by all state legal requirements.

  • If you plan on having a broker receive and hold earnest monies or other funds on your behalf, seek an assurance that a separate trust account will be established so that client funds will not be co-mingled with other business or personal accounts.

  • Feel free to confer with a licensed attorney if any legal questions need to be clarified. Questions having to do with The Texas Real Estate License Act and applicable rules may be directed to TREC (512-936-3000). Remember, real estate brokers and salespersons are explicitly prohibited from engaging in the practice of law, unless they are also licensed as an attorney.

Choosing A Broker Or Salesperson

BOTH real estate BROKERS and SALESPERSONS must be licensed by TREC in order to conduct property sales within the State of Texas. Buyers and sellers should be aware of the difference in levels of qualification and experience for each license.

SALESPERSONS must complete 270 hours of classroom instruction, of which 210 hours must be in core real estate course work. Courses in Law of Agency, Law of Contracts, and Principles of Real Estate are mandatory. All real estate SALESPERSONS must work under direct sponsorship and supervision of a licensed BROKER.

BROKERS are required to have 900 classroom hours of education, of which 270 hours must be in core and 630 in other courses related to real estate. In order to become a broker, a license holder must have at least two years of active real estate experience.

Each real estate BROKER is legally responsible for all acts and conduct of a real estate SALESPERSON sponsored by the BROKER.

Giving It Some Thought Before Making An Offer

Making a decision to buy a home can be time-consuming. A prolonged decision-making period can work to the disadvantage of a seller, who may need to sell quickly; and a buyer, who may lose the ideal property to someone with a better offer.

In recognizing this dilemma, TREC has provided for an "option fee" clause in all residential contract forms. This clause allows buyers and sellers to negotiate a specified time during which the buyer can fully evaluate the condition of the property and perhaps renegotiate the initial offer based on inspections, needed repairs, or other considerations. For this right, the buyer pays the seller a nonrefundable "option fee."

During the option period, buyers may either terminate the contract or proceed to purchase the home. Sellers not only receive the benefit of the "option fee" payment, but also avoid jeopardizing a successful sale.

There are no rules governing when a seller must accept any offer to purchase, nor are there requirements as to which offer or counter-offer a seller must accept, if any, for his or her property.

If You Experience A Problem

Out of some 150,000 real estate license holders in Texas, the vast majority receive no complaints. On occasion however, problems arise during a transaction. If a formal complaint is filed, TREC will investigate to determine whether legal requirements and procedures have been followed.

Consumers may find relief by obtaining a judgment in a civil suit against a licensed broker, salesperson, or inspector. When a monetary judgment cannot be collected from a license holder, the court may order payment from the Real Estate Recovery Trust Account (formerly Recovery Fund) or Real Estate Inspection Recovery Fund. These funds are administered by TREC and available to reimburse expenses for actual damages, court costs, and attorney fees within certain dollar limits as prescribed by law.

Other Resources:

Sellers and consumers can find additional information and assistance regarding real estate transactions through the following:
Resources from the Real Estate Center at Texas A&M University

Consumer Protection Division, Texas Attorney General

Assistance may also be obtained through local District Attorney offices and Consumer Protection agencies. Please consult your local telephone directory for listings.

Other Agencies:

Questions and concerns that are related to the sale of property sometimes fall within the legal jurisdiction of agencies other than TREC.
Texas Department of Savings & Mortgage Lending
Information concerning mortgage broker licensing and regulation
Texas Department of Insurance
Answers to questions regarding homeowner´┐Żs insurance, title insurance, and related services
Texas Department of Housing and Community Affairs
Housing assistance programs, manufactured housing and additional consumer information
U.S. Department of Housing and Urban Development (HUD)
Housing assistance programs, FHA loan information and additional consumer information

How to Contact the Texas Real Estate Commission

To reach us at TREC, please see the Main Contact Page on this web site.

Privacy & Security Policy Public Information Requests Linking to TREC site Accessibility Statewide Search Veterans Portal Texas Homeland Security Where the Money Goes Report Fraud