As you may be aware, real estate laws in Washington State are changing. While navigating through the evolving landscape of Washington's agency agreements, it's essential to recognize that legal frameworks often adapt to the dynamic nature of industries. One significant change occurred in 2019 when the requirement for offering buyer broker compensation to list a property was eliminated. In the interest of transparency, another law enacted in the same year made the buyer-broker compensation offered in the listing visible to the public.
Fast forward to 2022, new laws were introduced to ensure that the offer of buyer broker compensation is separate and distinct from the offer to the seller's broker. Concurrently, our Northwest Multiple Listing Service took a step toward increased transparency by including the amount of buyer-broker compensation in the purchase and sale agreement, fostering complete openness within the transaction.
Additional positive changes benefiting both buyers and sellers include a revamped agency law pamphlet, which has been streamlined for enhanced readability and comprehension—reducing it from 8 complex pages to a more concise 4 pages. Moreover, there is now a mandatory requirement for buyers to sign a contract, ensuring that the selection of their representation is a deliberate choice rather than a random occurrence.
Before January 1, 2024, Washington State law only obligated brokers representing sellers to engage in a brokerage agreement. However, as of January 1, 2024, Chapter 18.86 RCW mandates that brokers representing buyers in residential transactions must promptly enter into a written brokerage service agreement. Washington stands as the pioneering state in implementing this groundbreaking legislation. This contractual arrangement encompasses essential elements, including the duration of the partnership, exclusivity terms, and the agreed-upon compensation rate. The intent behind this change is to ensure that buyers have a clear understanding of the scope of representation, associated costs, and payment modalities before agents provide any real estate services.
Impact on Sellers:
In general, the new changes have a limited impact on sellers. The primary alteration they may notice is that agents could present a Seller Brokerage Service Agreement earlier than previously practiced. Under the updated listing agreement, sellers now have the option to sign up to 90 days in advance of the property being listed on the market.
Impact on Buyers:
Buyers should anticipate a couple of changes in the process. Firstly, they will be invited to make an early commitment to a Buyers broker, emphasizing the importance of their choice of a working partner. Buyers can now expect to receive an agency agreement before any services are rendered by their agents. While the prompt request for commitment might seem unconventional, it's important to note that Windermere brokers have a history of respecting client autonomy and utilize an agreement that empowers buyers to terminate the agency relationship at any time. It's advisable to thoroughly review the agreement and understand the procedures for canceling the buyer-broker agreement. Reputable agents often provide a cancellation document or instructions upfront, ensuring clients can make an informed decision without concerns about being bound if expectations are not met.
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