In Texas, what is an exclusive agency contract?

An exclusive agency contract is characterized by the owner retaining the right to sell the property independently while granting an agent the authority to represent them in the sale. In this arrangement, the agent typically earns a commission only if they secure a buyer, while the owner can sell the property themselves without owing any commission if they find a buyer independently. This structure incentivizes the agent to actively market the property, knowing they will earn a commission if they facilitate a sale, while allowing the owner flexibility to sell without incurring additional costs if they are successful on their own.

The other options do not accurately capture the essence of an exclusive agency contract. An agreement granting sole rights to an agent describes an exclusive right to sell contract, which does not allow the owner to sell the property without paying a commission. A verbal agreement that requires no written form misrepresents the conventional expectations for agency contracts, which typically are formalized in writing to provide legal clarity and enforceability. Finally, a contract that prohibits the owner from selling their property describes a scenario far more restrictive than an exclusive agency contract allows, which maintains the owner's rights to sell independently.