A significant change is coming to the residential real estate scene in Washington. Our state is at the forefront of improving a document that each buyer and seller receives near the start of the purchase and sale process, and for the first time, our industry will be required to have a contract with buyers.
These two changes aim to improve transparency and clarify the commission structure before moving forward with searching for and making offers on a home. They take effect on Jan. 1, 2024.
The Law of Real Estate Agency pamphlet has been renamed and rewritten in a consumer-friendly manner that helps describe the home buying and selling process. Your real estate broker will continue to be the primary contact for all real estate questions, and many clients will be supported by a team consisting of a lender, home inspector, appraiser, real estate attorney, accountant and/or others with expertise that helps fulfill the needs of the transaction.
The new Real Estate Brokerage in Washington pamphlet requires brokers to enter into a written services agreement to represent either a buyer or a seller. Agreements must address the broker’s compensation, the scope of representation and all related terms. Under this change, buyers will agree to the amount to pay their brokers, and buyers can then negotiate for the seller to help cover that cost as part of the purchase. The agency term of 12 months will be the standard but buyers can agree to any length in writing.
Sellers have always signed a listing agreement with their real estate professional, but buyers were never required to do the same – until now.
These consumer-focused changes follow the passing of legislation in Olympia and signed by the governor in May 2023. In addition to revising the real estate pamphlet and requiring that all parties sign a services agreement with a broker, the state set out to:
- Change the term “dual agent” to “limited dual agent” to reflect that a broker representing both a buyer and a seller is limited in the representation that the broker can provide;
- Give buyers and sellers a clear choice whether to consent to an individual broker acting as a limited dual agent by requiring the consent to a limited dual agency to be separately initialed by the consumer;
- Clarify that a broker owes certain duties in state law (RCW 18.86.030) to all parties in a transaction; and
- Ensure complete transparency regarding compensation by requiring that real estate firms disclose to all parties any compensation offered to the firm by another party or another real estate firm.
The state’s focus is clear: to enhance agency relationships between brokers and buyers by making compensation practices more transparent and to simplify the real estate pamphlet that both buyers and sellers receive.
Washington lawmakers set out to make our corner of the country one of the most consumer-centric real estate environments anywhere. These improvements will better protect everyone while making the real estate process more clear.