Key Takeaways
- An intermediary is a broker who represents both the buyer and seller in the same transaction with written consent from both parties
- The intermediary broker must be impartial and cannot advocate for one party over the other
- Brokers may appoint different sales agents to advise each party (intermediary with appointments)
- Intermediary status must be disclosed in the listing agreement or buyer representation agreement
- Confidential information obtained before intermediary status cannot be disclosed without permission
Intermediary Relationships
The intermediary relationship is Texas's version of dual agency. It allows a broker to represent both the buyer and seller in the same transaction—with significant limitations.
What is an Intermediary?
An intermediary is a broker who:
- Represents both buyer and seller in the same transaction
- Has written consent from both parties
- Cannot advocate for one party over the other
- Maintains impartiality between parties
When Intermediary Status Applies
Intermediary status occurs when:
| Situation | Result |
|---|---|
| Broker's buyer client wants to buy broker's listing | Intermediary (with consent) |
| Two sales agents in same brokerage | Intermediary (with consent) |
| One agent has listing and buyer | Intermediary (with consent) |
Requirements for Intermediary
Written Consent Required
Both parties must provide written consent to intermediary status. This is typically done in:
- The listing agreement (for seller)
- The buyer representation agreement (for buyer)
Key Point: Consent must be obtained before intermediary status begins, not after.
Intermediary Duties
The intermediary broker:
| Must Do | Cannot Do |
|---|---|
| Treat both parties fairly | Disclose confidential information |
| Act in good faith | Advocate for one party |
| Disclose material facts | Reveal negotiating strategy |
| Follow lawful instructions | Favor one party's interests |
Intermediary With Appointments
Texas allows brokers to appoint different sales agents to advise each party in an intermediary transaction.
How Appointments Work
| Role | Responsibility |
|---|---|
| Intermediary Broker | Supervises transaction, remains neutral |
| Appointed Agent (Seller) | Can advise seller on negotiation |
| Appointed Agent (Buyer) | Can advise buyer on negotiation |
Benefits of Appointments
- Each party gets an advocate within the brokerage
- Appointed agents can provide opinions and advice
- More similar to traditional single agency representation
Limitations on Appointed Agents
Appointed agents still cannot disclose:
- The other party's lowest/highest acceptable price
- The other party's motivation to sell/buy
- Confidential information from either party
- Any information that would harm the other party's position
Confidentiality in Intermediary
Pre-Intermediary Information
Information learned before becoming an intermediary:
- Remains confidential
- Cannot be disclosed without written permission
- Must be protected even during intermediary status
What Must Be Disclosed
Even as an intermediary, the broker must disclose:
- Known material defects
- Property condition issues
- Environmental hazards
- Information required by law
Comparison: Intermediary vs. Single Agency
| Feature | Single Agency | Intermediary |
|---|---|---|
| Parties represented | One | Both |
| Can advocate | Yes | No (unless appointed) |
| Written consent | For representation | For intermediary status |
| Confidentiality | To client only | To both parties |
| Fiduciary duties | Full | Limited/impartial |
What is required before a Texas broker can act as an intermediary?
In an intermediary with appointments, what can the appointed agent do?