In the ever-evolving landscape of real estate, it’s crucial for both buyers and sellers to stay informed about legislative changes that can impact the way business is conducted. Recently, the state of Washington has made significant amendments to its “Agency Law,” reshaping the dynamics of brokerage relationships. Let’s explore the two monumental changes that are set to redefine how real estate transactions are handled.
Equal Treatment for Buyers and Sellers:
The Washington State statute governing brokerage relationships, known as the “Agency Law,” has undergone a significant revision, changing a law that has been in place for more than two decades.
Two HUGE changes to how real estate business will be done moving forward that you NEED to know!
For YEARS, brokerages were only required to have a written agreement with SELLERS. But NOW, the law requires this for Buyers as well.
First, to ENSURE transparency and consumer protection for Buyers. So no more handshakes or loyalty relationships. And Brokers, will no longer just be able to casually open doors for Buyers anymore.
The primary motive behind this change is to ensure transparency and consumer protection for buyers. No longer can transactions be sealed with mere handshakes or rely solely on loyalty relationships. Brokers are now obligated to provide the same level of commitment and transparency to both buyers and sellers. This means that brokers can no longer casually open doors for buyers without a formal agreement in place.
Clarity on Broker Compensation:
Traditionally, brokerages received their compensation from sellers through the equity of the property. While this method could still be applicable, the recent amendment provides more clarity on how brokers get paid.
Second, to clarify how Brokers get paid. Traditionally, Sellers paid Brokers through their equity, and that COULD still be the case.
However, if the offered compensation is not what you and your Broker agreed to, they can negotiate with the Seller or you can pay them directly… OR a combination.
If the offered compensation doesn’t align with the agreement between the buyer and the broker, negotiations can take place. Buyers have the option to negotiate directly with the seller or pay the broker directly—or even opt for a combination of both. This newfound flexibility is a positive development for all parties involved, especially for buyers.
Implementation and Compliance:
Brokers are now required to provide buyers with the Agency Law pamphlet and a written services agreement before or as soon as they start serving the client. Failure to do so is a violation of the law. These services encompass various aspects, such as planning sessions, property research, opening doors, and writing offers.
Your Broker should provide you with the Agency Law pamphlet AND a written services agreement BEFORE, or as soon as they begin serving you. IF THEY DON’T, they are already breaking the law.
These services can be a planning session, researching properties, opening a door, writing an offer, etc.
This shift in procedure might be unfamiliar to buyers in Washington, especially since they traditionally did not pay their brokers directly. It is paramount for clients to ask questions, ensure their broker is competent, and fully comprehend these changes to receive the highest level of service.
In conclusion, the recent revisions to Washington State’s “Agency Law” mark a significant milestone in the real estate industry. These changes, aimed at enhancing transparency and clarifying compensation structures, are ultimately beneficial for all parties involved, particularly buyers. As the industry adapts to these new norms, it’s essential for clients to engage with competent and transparent brokers who can guide them through this transformative period. If you’re seeking a reliable team to navigate these changes with, we would be honored to be your preferred choice.
Let’s start a conversation and explore how we can best serve your real estate needs in this dynamic landscape.