Can a broker compensate an out-of-state broker?

The correct answer is that a broker can compensate an out-of-state broker as long as the other broker does not negotiate in Texas. This is aligned with Texas regulations regarding real estate transactions. The state's laws permit a Texas broker to pay a commission to a broker from another state, provided that the out-of-state broker is not engaging in negotiations regarding the sale or lease of property within Texas. This is to ensure that only licensed Texas brokers are allowed to negotiate and perform acts that require a real estate license within the state, which helps maintain compliance with state regulations and protects consumers.

In summary, while brokers can work collaboratively across state lines, they must adhere to the stipulations that govern their home state's real estate practices. The specific condition that the out-of-state broker does not negotiate inside Texas is crucial to ensure compliance with Texas law.