Categories: Real Estate Marketing

All You Need to Know about Texas Real Estate Commission


Texas real estate commission (TREC) is a Texas state agency. It oversees the licensing of real estate brokers and agents. This agency was founded in 1949. Additionally, this entity works to protect consumers and educate professionals involved in real estate transactions.

Besides, Texas real estate commission has another interpretation. It speaks about how much a real estate agent earns by dealing in properties in Texas.

Who Are the Members of the Texas Real Estate Commission?

A nine-person commission appointed by the Governor of Texas is in charge of the Texas real estate commission (TREC). Each person serves for a term of six years. Therefore, this group is a combination of three members who are not licensed by (TREC) and six members who have real estate agent or broker licenses.

In addition to regulating real estate service providers, the Texas real estate commission (TREC) also oversees the appraisal and inspection providers with its division called the Texas Appraiser Licensing and Certification Board (TALCB).

Composition, Duties, and Powers of Texas Real Estate Commission (TREC)

The Texas real estate commission (TREC) determines and monitors the requirements for both sales agents and brokers. The first step to becoming a broker is to become a licensed real estate agent. In Texas, a broker sponsors real estate agents to work with clients on real estate. The Texas real estate commission authorizes both of them.

Here we will list the requirements to become a real estate agent based on the Texas real estate commission.

To meet the first requirements to become a real estate agent, individuals must be:

  • Eighteen years old
  • Be a citizen or legal resident of the United States and reside in Texas
  • Able to meet the agency’s standards of integrity, honesty, and reliability

Next, the applicant must:

  • Complete 180 hours of specific courses
  • Submit a request
  • Accept a background check and have fingerprints taken
  • Successfully complete the Texas Real Estate Commission (TREC) exam
  • Get Sponsorship from a Licensed Texas Real Estate Broker

The first sets of requirements to become a real estate broker include the list mentioned above. Apart from this, you do not require residency in the state of Texas if you were a licensed broker in a different state, had become an agent, or Texas licensed broker for the past two immediate years.

There were many laws related to real estate in Texas. The main law you need to focus on is the Real Estate Licensing Law. The commission used that law as the basis for creating the administrative and agency rules that cover the licensing of brokers and agents.


Handling of Complaints and Disciplinary Actions

A very important aspect of working as a licensed agent or broker was the requirement to put the client’s needs first. We know it as a fiduciary duty. Buying a home or other real estate is an important investment. Clients would trust a licensed agent to advise them and negotiate a fair deal. A licensed agent would be responsible for the value of the monetary transaction.

The Texas real estate commission (TREC) not only has the power to authorize it but also the power to investigate and rule on any complaint against it, whether as an agent or broker. It is easy for a client to file a complaint against a broker or agent. (TREC) investigates all complaints and maintains a list on its website of complaints submitted. 

Disciplinary actions may be imposed against agents or brokers who violate rules or statutes. Complaints are mediated by (TREC), and these procedures are confidential. If the mediation is successful, the complaint is closed. The Texas real estate Commission may impose penalties that include suspension or revocation of a license. Consumers can also file a civil lawsuit in the event that (TREC) does not resolve a complaint.

Working as a real estate agent or broker without a license is a crime and can result in fines and imprisonment.


Recovery Trust Accounts

The Texas real estate commission (TREC) maintains two trust accounts:

  • Real estate recovery trust account
  • Real Estate Inspection Recovery Fund

Both accounts allow consumers to recover damages. Hence, if a licensed broker, agent, or inspector harms the clients, they can recover the damage. If a person has obtained a civil court judgment against a licensed professional, a request for recovery of one of these funds can be filed. However, they consider them as “last resort” funds; Only if the licensee is unable to pay the court-ordered money damages can the consumer take advantage of these recovery accounts.


How Much is the Texas Real Estate Commission?

Honestly speaking, this rate of commission can be different. It depends on a variety of elements. In terms of legal regulations, there is no legislation that governs what real estate agents charge to sell your property. Besides, you want a sense of what you could pay, the national average is around 2% to 2.5% of the sale price of your home – with a low of 1.6% and a high of 4%.

If you are considering buying or selling a home in Texas, you probably know that there are many costs.

In residential purchase/sale transactions, the standard is 6% of the property’s sale value, which is divided by 3% for each of the agents involved in the transaction (the buyer’s representative and the seller’s). In residential rental transactions, the standard is 10% of the annual contract value or one month’s rent. They divide the commission equally for each of the agents participating in the transaction.

The property owner is always responsible for paying the commission, both in the case of sale and rental. On the closing day, the title company or attorney representing the transaction is responsible for paying the commission.

All in all 
In this article, you learned that the Texas Real Estate Commission (TREC) sets the standards for becoming a licensed real estate agent and real estate broker in Texas. Agents and brokers have a fiduciary duty to their clients, which means that they must put the client’s needs first. Additionally, the Texas real estate commission monitors complaints and disciplinary actions. Besides, we explained the rate of commission in Texas which is almost 3%.