Benefit To Buyers
By Jim Palmer Jr.

 On January 1, 2024, major changes to the Law of Agency will go into effect. These changes were in large part due to pressure from real estate professionals in Washington State wanting to elevate the level of transparency and offer better consumer protection surrounding buyer representation. Senate Bill 5191 was voted into law, requiring adjustments in how brokers operate when working with buyers.

Beginning on January 1st, the agency law will require firms to enter into a written brokerage services agreement with any party the firm represents. That means both sellers and buyers. For years firms were only required to enter into written listing contracts with sellers, but not agreements with buyers, who usually roam the real estate world bouncing from broker to broker without any real commitment of loyalty to any one broker.

This change is to ensure that buyers clearly understand the terms of a firm’s representation and compensation and even their ability to negotiate compensation. The written agreement must include the term (or how long) buyer and broker are committed to each other, the name of the appointed agent, whether the agreement is exclusive or non-exclusive, consent (or not) for limited dual agency, and the amount of compensation and who will be the payee of that compensation.

In the past, the level of commitment a buyer and broker had for each other has been ambiguous. The confusion that was often created by that uncertainty has even become a point of contention in many cases. Confused or willingly-aloof buyers often dumped a broker quickly when they didn’t get the attention they expected because the broker had no written commitment from the buyer for compensation of their services.

In practice, this new law forces brokers to create written agreements with buyers in order to get paid, which may seem to consumers (on the surface) to only benefit brokers. However, buyers will still be allowed to be “willingly aloof ” if they desire a non-exclusive contract. But in theory and in practice, when buyers sign an exclusive representation agreement, the broker will be more willing to dig deeper for listings, drive farther for showings and be much more committed in their efforts for buyers because they will fear less that their efforts might be in vain.

Gone are the days when an uncommitted buyer can call for a quick showing of a property without any expectation of commitment. Brokers will not be allowed to provide such services without first creating a written contract.