TREC Form 20-19, the current One to Four Family Residential Contract (Resale), replaces Form 20-18 and carries a form revision date of 05-04-2026. Per TREC and Texas REALTORS® guidance, the revised form is available for voluntary use now and becomes mandatory for contracts executed on or after 07/01/2026, with no grace period after that date. This guide describes only what the current form's language says about brokerage compensation. It's not legal advice, and it doesn't address the enforceability or legal effect of any specific compensation arrangement — talk to a Texas real estate attorney about how these provisions apply to a specific transaction, listing agreement, or buyer representation agreement.
¶12B — Brokerage Compensation, verbatim
The new ¶12B reads in full:
"BROKERAGE COMPENSATION: Brokerage compensation is not set by law and is fully negotiable. Each party shall pay their respective brokers pursuant to the terms of the parties' obligations to compensate their brokers contained in separate written agreements. The contributions under 12B(1) and 12B(2) below shall be applied to and shall not change the parties' obligations to pay compensation pursuant to those agreements. The following contributions must be paid at closing: (1) Seller will pay (check one box only): $ ___ or ___% of the Sales Price to be applied toward the brokerage compensation owed by Buyer to Buyer's broker. (2) Buyer will pay (check one box only): $ ___ or ___% of the Sales Price to be applied toward the brokerage compensation owed by Seller to Seller's broker."
Two things stand out in the form's own wording. First, it states outright that brokerage compensation is "not set by law and is fully negotiable." Second, it's explicit that the ¶12B(1)/(2) checkbox contributions are applied on top of — and don't change — whatever the buyer and seller each already separately agreed to pay their own broker under a listing agreement or buyer representation agreement.
What's actually new: ¶12B(2)
The new piece is ¶12B(2): for the first time on the promulgated resale contract, the buyer can check a box agreeing to contribute toward the compensation the seller owes the seller's broker — not just the reverse. Texas REALTORS®' own forms-update memo confirms this directly: "Brokerage Compensation has been moved to a new paragraph, Paragraph 12B, and adds a new option that allows the buyer to contribute to the seller's broker's compensation." ¶12B(1), the seller contributing toward the buyer's broker compensation, existed in substance before this revision — 12B(2) is the addition.
Where this language used to live
Per the same Texas REALTORS® memo, the statement about each party paying their own broker "has been moved from Paragraph 8B to Paragraph 12B." On the current 20-19, ¶8 is retitled "BROKER OR SALES AGENT DISCLOSURE" and covers a narrower, different topic entirely — a broker or sales agent's duty to disclose when they (or a spouse, parent, child, business entity they own more than 10% of, or a trust they're trustee or beneficiary of) is a party to the transaction. The general brokers'-fees language that used to sit in ¶8 no longer appears there; it's now folded into ¶12B.
¶12C — Expense Limitation, renumbered and narrowed
¶12C reads in full:
"EXPENSE LIMITATION: If a governmental loan program regulation prohibits Buyer from paying charges or fees, then the amount of any concession in 12A(1)(b) shall be first applied to pay such prohibited expenses and then to other Buyer's Expenses but not brokerage compensation or contribution."
Texas REALTORS®' memo describes this as "the lender expense limitation paragraph" having been "moved to Paragraph 12C and reworded to align with the other changes made to Paragraph 12." On the current form, ¶12C is narrow and specific: it governs how a seller's ¶12A(1)(b) concession gets applied when a government loan program prohibits the buyer from paying certain charges or fees — and it explicitly carves brokerage compensation and contributions out of that concession-priority order.
The rest of ¶12's reorganization
¶12A is now titled "EXPENSES," and per Texas REALTORS® "clearly specifies that the expenses referenced in 12A do not include brokerage fees" — separating the buyer's-expenses/seller's-expenses list from the compensation question entirely. ¶12A(1)(b) is the seller's optional concession amount, capped at a stated dollar figure, applied "to Buyer's Expenses other than brokerage compensation or contributions under Paragraph 12B."
Why this exists
This revision tracks the broader industry shift following the 2024 NAR settlement — cooperative compensation coming off the MLS, and Texas REALTORS®' own residential listing agreement (TXR 1101) dropping broker-to-broker compensation from its Paragraph 5 in the same forms cycle. TREC's contract-level fix documents brokerage compensation as a matter between each party and their own broker under separate written agreements, with the ¶12B checkboxes as the mechanism for either side to contribute toward the other's broker at closing. This guide describes what the form itself says; it does not interpret the legal effect, enforceability, or antitrust implications of any specific compensation arrangement. Consult a Texas real estate attorney for how this applies to a specific transaction.