In Texas, it is require BY LAW to present all prospective buyers, tenants, sellers and landlords the form called INFORMATION ABOUT BROKERAGE SERVICES. This form is to be presented by a real estate agent upon meeting a prospective client at the first "substantive dialogue". So what does this mean?
What is the definition of "substantive dialogue"?
Basically when a prospective client meets or discusses specific things regarding a real estate property. This could mean exchanging information via email on a specific property or through a phone call or in person.
What is the form?
Commonly know as the IABS, this one page form must be given to the prospective client. It is NOT an agreement to work with an agent, it is simply an informative form explaining how brokerage works in Texas. Who represents whom.
Do I have to sign the IABS?
You do not have to sign it. It is a good thing to sign it as proof that you have received the information and that you understand how agents represent the various parties in a real estate transaction. The most important thing is that you are presented with the form when you first enter into discussions regarding property.
When does the form not need to be presented?
An open house or for a residential lease that is not for more than one year and a sale is not being considered. Also, if a licensed agent meets with a party who is represented by another licensee, the form is not required. Commonly however, most agents will present the form just to insure that everyone is on the same page.
Why is this form so important?
This is the first section of the IABS that explains that the duty of a broker depends on whom they represent. If you do not have an agent through a written Buyer's Representation Agreement, then the agent who has the said property listed represents the seller. If a prospective buyer is shown the property without their own representation (i.e. they have not signed an agreement with an agent) then in essence any agent showing a property in this instance is representing the broker of the listed property. It is important for a buyer to have their own representation whether it is with another agent of their choosing or the listing agent.
This certainly can be confusing to any consumer. Understanding what you are signing is important. Once you do decide to use a specific agent, you will then enter into an official agreement to have them represent you. Once you enter into a Buyer's Representation Agreement, that agent can now negotiate, pull comps, etc. for you.
Feel free to give Chevaux Group a call for more information about this important document. We will be happy to sit down with you to explain the basics of Texas Real Estate Brokerage. It is important that you have some basic understanding of this form before proceeding into any real estate transaction.
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