Realtors in Texas get paid through a commission on the home’s sale price, negotiated with the listing brokerage and paid at closing from the seller’s proceeds. The total typically runs 5% to 6%, with no state law setting a minimum or maximum. That money is then split between the listing and buyer brokerages, and each brokerage divides its share with the individual agent who worked the deal. Recent changes from a 2024 national settlement and a new Texas law taking effect January 1, 2026, have shifted how the buyer’s agent gets paid in particular, so the old assumption that “the seller pays everyone” no longer holds automatically.
Who Pays the Commission and How Much
In a traditional Texas sale, the seller signs a listing agreement with a brokerage that commits them to pay a commission when the home sells. The seller does not write a check up front. The commission comes out of the sale proceeds at closing, so the buyer’s purchase price effectively funds it.
On a $400,000 home at a 5.5% total commission, that’s $22,000, historically split between the listing brokerage and the buyer’s brokerage.
Texas law does not fix the rate. Everything is negotiable between the seller and the listing broker, and always has been. The 5% to 6% range is common, but some brokerages charge less depending on the services offered or the property. Flat fees — a set $5,000 or $10,000 regardless of sale price, for example — are another option.
The seller’s obligation is created by a written listing agreement, usually the Residential Listing Agreement, Exclusive Right to Sell published by the Texas Association of Realtors.1texasrealestate.com. Commissions Legal Webinar Outline and Content That document fixes whether the fee is a percentage or a flat amount and when the brokerage has earned it.
How the Money Reaches the Individual Agent
A sales agent in Texas cannot be paid directly by a buyer, seller, or any other party in the transaction. Every dollar of compensation has to flow through the agent’s sponsoring broker.2State of Texas. Texas Occupations Code Title 7, Subtitle A, Chapter 1101, Section 1101.651 – Certain Practices Prohibited A broker also cannot pay commissions to an unlicensed person for doing brokerage work.3State of Texas. Texas Occupations Code Chapter 1101 – Real Estate Brokers and Sales Agents
Once the brokerage receives its share, it splits with the agent according to their independent contractor agreement. Common splits are 70/30 or 80/20 in the agent’s favor. Top producers, or agents at firms that provide fewer support services, often negotiate better terms. Before the agent sees the money, the brokerage may deduct franchise fees, technology fees, or administrative charges, and those deductions vary widely from firm to firm.
The actual payout happens at closing. In Texas, that’s usually handled by a title company acting as the settlement agent. The settlement agent checks the closing disclosure against the listing agreement, the buyer representation agreement, and any broker-to-broker compensation agreement, confirms the numbers match, then wires or writes checks to the brokerages once the deed is recorded and the property transfers. Each brokerage then pays its agent.
What Changed for Buyer’s Agents
Two recent changes matter if you’re buying.
No More Buyer-Agent Compensation on the MLS
Before the 2024 NAR settlement, a listing broker could post on the Multiple Listing Service exactly what commission split the buyer’s agent would receive. That is now prohibited. The MLS cannot accept listings that advertise an offer of compensation to buyer brokers, and it cannot run a workaround platform to do the same thing.4National Association of REALTORS®. No Offers of Compensation in MLS (Policy Statement 8.11) The total commission the seller negotiated with their listing broker is no longer shown either.
The listing broker can still agree to pay the buyer’s broker. It just has to be worked out separately, through a broker-to-broker agreement, before the buyer tours the home.5NAR.realtor. Compensation, Commission and Concessions
Written Buyer Representation Agreements Required in 2026
Starting January 1, 2026, any Texas agent working with a prospective residential buyer must have a signed written buyer representation agreement in place before showing a home or submitting an offer. The requirement is codified in new Section 1101.563 of the Texas Real Estate License Act.6Texas Real Estate Commission. What Changes in 2026 About Buyer/Tenant Representation in Texas
The agreement has to state a definite amount or rate — not a range. A flat dollar figure like $5,000 or a specific percentage like 2.5% is fine. The rule covers in-person and virtual showings. You can still visit an open house on your own without signing anything, but if the agent hosting the open house doesn’t represent the seller, that agent has to get a signed agreement from you before showing you the property.6Texas Real Estate Commission. What Changes in 2026 About Buyer/Tenant Representation in Texas
Three Ways the Buyer’s Agent Can Get Paid
Under the new framework, the buyer’s agent fee set in the representation agreement can be covered in three ways, in any combination:
- The buyer pays the agent directly, as agreed in the representation agreement.
- The seller agrees in the sales contract to contribute a specific dollar amount toward the buyer’s brokerage fees. In the standard Texas resale contract, Paragraph 12A(1)(b) allows this, capped at the lesser of the stated amount or what the buyer actually agreed to pay their agent.
- The listing broker shares part of its commission with the buyer’s broker through a separate cooperative compensation agreement.
A seller contribution written into the sales contract is binding on the seller. The figure that appears on Page 10 of the standard contract reflecting a listing broker’s payment to the buyer’s broker is informational only; it must be backed by a separate broker-to-broker agreement to be enforceable.7Texas Real Estate Commission. Clearing Up Compensation Confusion, Water Disclosure Discussion, and More: BLC Recap Whatever the source, the buyer’s agent cannot collect more than the amount set in the buyer representation agreement.5NAR.realtor. Compensation, Commission and Concessions
Commission Rebates
Texas lets agents give back part of their commission. An agent can rebate a portion of the fee to a client they represent, so a buyer’s agent might credit the buyer at closing. If the rebate goes to someone the agent doesn’t represent, the agent has to get consent from their own client first.8Texas Real Estate Commission. Can a License Holder Rebate a Portion of His Commission to a Seller? What About a Buyer? Rebates are usually documented in the representation agreement and show up on the closing disclosure.
If the Commission Isn’t Paid
If a seller or other party refuses to pay an earned commission, the broker can sue only if there’s proper paperwork. Texas law requires a written agreement, signed by the party who owes the money, that identifies both the obligation to pay and the specific property.9texas.public.law. Texas Occupations Code 1101.806 – Liability for Payment of Compensation Without that written document, a Texas court will not hear the case. A vague or unsigned agreement won’t do, and the property description has to be clear enough to be enforceable. For the consumer, the practical point is the same: whatever you agree to pay should be in writing, and whatever you don’t agree to in writing, no one can force you to pay.