Improved Consumer Protections
By Jim Palmer Jr.

Consumer pressure on the real estate industry inevitably works its way into reality.  Significant change is on the horizon for the real estate industry in Washington State, where Realtors® and legislators have been working together in an effort to provide more transparency and better consumer protections for real estate buyers. 

The biggest change coming this January is a historic revision to agency law. This change (SB 5191) affects buyers in a major way.  When the law goes into effect after the new-year, buyers will be required to sign written buyer agency agreements, much like sellers sign a listing agreement. Buyers must commit to a compensation agreement with their broker “as soon as reasonably practical after a broker commences rendering brokerage services.”

This new buyer agency agreement theoretically offers more transparency and clarity of legal duties of the buyer agent, how they get paid, and gives the agent permission from the buyer to negotiate with the seller on the commission.  While this is a dramatic change from the past custom where a seller agrees to pay all of the commission and buyers could not negotiate that commission except by negotiating the sales price, the end result of this change may just be semantics and may be something of a wash.

While this buyer agency agreement is not required to include geographic scope provisions or restatement of agency law or statutory duties, it will be structured to allow for additional terms provisions in addition to the statutory requirements.

The other major change concerns a re-casting of the term currently called Dual Agency.  Buyers and sellers are already required to sign written disclosure agreeing to dual agency, however, the revamped version will define it as a, “single agent, dual agency relationship” and will include a more comprehensive written disclosure concerning the limitations inherent with dual agency relationships.

In addition, the new law will clarify that the statutory duties in the Agency Law apply between a broker and ALL parties involved in a transaction, not solely between a broker and a broker’s client. All of these changes will be wrapped up a new neat package, in a shorter and easier to read pamphlet that is more consumer friendly than the previous version that merely restated statutes.

Buyers who routinely operate in an aloof manner, free from making a written commitment to any certain broker, may find that they won’t be able to operate as freely.  The perceived benefit of these new changes may not outweigh the new responsibility!

Back to Real Estate Trends Articles