Evolution of Agency Law

 
 

Pre-1997

In Washington State, Real Estate was practiced by Common Law derived from English Law. Home buyers didn’t have representation and all agents were either the listing agent or a sub-agent to the listing agent.

1997-2023

RCW 18.86 (Agency Reform Act of 1997) created a buyer agency to give the buyer a form of representation and advocacy. Buyers were represented by a “selling broker”; Sellers were represented by a “seller’s broker”.

2024

Revising RCW 18.86 (SB-5181) to modernize agency law to provide additional protections and transparency and to highlight the importance of buyer and tenant representation. Buyers are now represented by a “buyer’s broker” and sellers are represented by a “seller’s broker”.

 
 

2024’s Major changes

 

  • Agency pamphlet now called “Real Estate Brokerage in Washington” - An easier-to-read explanation of a real estate brokerage’s scope of practice.

  • New standardized terminology such as “limited dual agency” and “buyer’s agent”

  • Acknowledged the importance of buyer and tenant representation

  • A firm must enter into a written service agreement with the principal (seller or buyer) “before, or as soon as reasonably practical after” commencing broker services

  • Duties are owed to all parties regardless of whether a broker is an agent of the party

  • Duty to disclose all compensation including additional “broker bonuses” not made public to either buyer or listing agent

  • Limited dual agency is practiced but:

    • must have separate consent from both buyer and seller

    • Not advocate terms favorable to one principal to the detriment to the other

    • No adverse or detrimental action to either party’s interest

    • Timely disclose conflicts of interest

    • Not disclose confidential information about either party

 

My Opinion

 

This is great for the industry’s progress towards a more professional service. This gives considerably more transparency to the consumer while also limiting the liability of less productive or inexperienced agents indirectly. Both are better for the consumer and thus better for the industry.

I’d still like to see higher standards for educational, legal, and practical training for our agents in their first two years and as continual education. I’d love to also see a required mentorship or apprenticeship program for the first two years as seen in many other professional and trade careers. Lastly, a requirement for all agents to be full-time as it requires a professional to be immersed in real estate work at least 40 hours a week to serve a home buyer and seller adequately. My view is not popular in my industry where most agents are part-time.

I digress. These changes the Senate unanimously passed will result in excellent change, but both consumers and politicians must keep pushing the needle as housing is becoming more impactful to each individual and the economy.

-Brian Huie, BH GROUP | COMPASS