TXR-1101 Paragraph 5 - Broker Compensation

How to Nail Commission Details in Your Texas Listing Agreements

Set yourself up for success by properly completing the commission section of your listing agreements! One of the most common questions Texas real estate agents ask is:

👉 “How do I complete the listing agreement commission section to ensure what the seller and I agreed to actually happens?”

Understanding how to structure commissions correctly will help you avoid disputes and ensure smooth transactions. Let’s break it down!

Understanding Commission Terms in the Listing Agreement

The commission section of the listing agreement begins with an important reminder:

✅ Compensation between brokers is not set by law
✅ It is not controlled, fixed, recommended, or suggested by any association, MLS, or listing service
✅ Brokers independently determine their fees—they are fully negotiable

After this disclaimer, the form instructs you to complete either Section 5A or Section 5B, depending on how the commission will be structured.

Scenario 1: The Seller Pays the Listing Brokerage and Buyer’s Brokerage

If the seller agrees to pay the listing brokerage commission, which will then be split with the buyer’s brokerage, you will use Section 5A.

• 5A(1)(A): Enter the total commission (either a percentage or flat fee) paid to the listing brokerage.
• 5A(1)(B): Enter any additional agreed-upon fees.
• 5A(2)(A): Specify the portion of the total commission that will be paid to the buyer’s brokerage (as a percentage or flat fee).
• 5A(2)(B): If sub-agency compensation is involved, this section is for that allocation.

Scenario 2: The Seller Only Pays the Listing Brokerage

In some cases, the seller might only agree to pay the listing brokerage and not the buyer’s agent commission. Instead, the buyer’s agent commission would be paid by the buyer or negotiated separately during the sale.

For this situation, do not complete Section 5A. Instead, fill out Section 5B.

• 5B(1)(A): Enter the amount the seller agrees to pay the listing brokerage—and that’s it!

📌 Key takeaway: The word “ONLY” in Section 5B is crucial. If the seller is only agreeing to pay the listing brokerage, this section must be used instead of Section 5A.

Final Thoughts: Avoid Commission Disputes & Ensure a Smooth Transaction

Properly completing the listing agreement commission section ensures clarity between you and your seller.

✅ Always double-check whether to use 5A or 5B
✅ Clearly outline commission splits to avoid confusion
✅ Educate your sellers on their options

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Frequently Asked Questions

What is TXR 1101?

TXR 1101 is the Texas Realtors Residential Real Property Listing Agreement. It’s the standard listing agreement used by Texas real estate agents to establish the terms of their engagement with sellers, including commission structure, listing price, marketing authorization, and the broker compensation framework outlined in Paragraph 5.

How do I fill out Paragraph 5 of the TXR 1101?

Paragraph 5 covers broker compensation — how the listing broker gets paid and whether they’ll share compensation with a cooperating broker. Section 5A covers scenarios where the seller pays both brokerages. Section 5B covers alternative arrangements. The key is making sure the dollar amounts or percentages add up correctly and match what was agreed to with the seller.

Can a transaction coordinator help with listing agreement compliance?

Yes. A transaction coordinator reviews the listing agreement for completeness, ensures all required fields are filled correctly, verifies that compensation figures match the agent’s instructions, and files the agreement in the broker’s compliance system. This catches errors before they become problems at closing.

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