Maybe you’ve heard about the class action lawsuits in other states, or maybe you’ve clicked a link discussing how REALTORs® conspired to artificially inflate home prices through price fixing of commissions. What you probably haven’t seen is that in Washington our REALTORs® and our NWMLS have been actively working to make the real estate marketplace more transparent and consumer friendly since 2019. Through our requests of the legislature Real Estate Agency Law is changing on January 1, 2024. It will significantly affect how you, the consumer, engage a real estate broker among other things. If you’re thinking about buying a home in the Seattle area ever again, read this.
Washington was among the first states in the country to adopt buyer agency in the late 90’s. Before this ground-breaking consumer protection, all agents were considered agents of the seller; if a buyer was working with a real estate professional, that person wasn’t a “buyer’s broker” but rather a “sub-agent” for the seller. Under current law, all agents are agents for the buyer unless there’s an agreement to the contrary. An agency relationship is created the moment you ask, “how is the market?” or an agent hands you a business card. That means that almost immediately as a home buyer you have protections afforded to you by the law of our state. An agent only becomes an agent for the seller through written agreement.
Somewhere along the way (and there are lots of possible explanations for this, practical rather than nefarious), written agreements between buyers and their brokers were deemed unimportant. Very few practitioners have these agreements signed by their clients, even though they are encouraged to do so. The law automatically protects both parties and the seller sets the compensation, so it was a pretty natural path: focus on the other 1,000 things you need to educate the consumer on instead of discussing such gauche topics as how we generate revenue as business people. AKA: how we feed our families. AKA: what does buying a home truly cost.
The law is being updated to become even more consumer friendly and that means an important change: If you are a home buyer shopping for a home you must sign a “brokerage services agreement” with your broker after January 1, 2024. This agreement must discuss the fee that your broker will charge and where that money will come from. It’s a wonderfully positive change that we as Washington REALTORs® lobbied for in Olympia in January 2023 (our owner, Rachel Mehmedagic, was there!). REALTORs® asked for more regulation on themselves. This will take us to a higher level of professionalism, bring it on! If your broker doesn’t ask you to sign an agreement, they are not up to date on what is going on in their industry. Start shopping for a new broker.
The NWMLS has created a form for all members to use, but that is not the only form that you may be presented with. Be careful to read what you’re signing. Ask questions. Be a diligent consumer. Demand professionalism from your broker. We will rise to the occasion, we’re confident of this.
For more on what the NWMLS has done to stay ahead of the national conversation: https://www.nwmls.com/northwest-mlss-members-provide-buyers-and-sellers-with-choices-control-and-complete-transparency/. This is not the only change to Agency Law, just the one piece of what we wanted to discuss today. To read the new law: https://app.leg.wa.gov/rcw/default.aspx?cite=18.86 or see the line-item changes here.
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