Law of Real Estate Agency

Quick Explanation about Agency

• Agents can work for either buyers or sellers.
• You should have someone represent you.
• It's free, in most cases, for buyers to have representation if they are buying a listed property.
• Piece of advice: whether you're a buyer or a seller, be careful what you say to whom, it might be used against you in a negotation.

Longer Explanation about Agency

How does real estate agency work in Washington State? Agents can work for either buyers or sellers. This means:

• When you're a buyer, you should have a Buyer's Agent working for you. (Sometimes Buyer's Agents are called the Selling Agent in a transaction, confusingly enough.)
• When you're a seller, you should have a Listing Agent working on your behalf. (Sometimes referred to as the Seller's Agent.)

The law says that agents must let you know who they're working for in a transaction, so if you're not sure who is working for whom...just ask. This sounds so simple, why are we even talking about it? Candidly, it beats the heck out of us, but we see people all the time that are going into situations unrepresented.

Specifically as a potential buyer, there is no reason not to have representation since the seller pays the commission. (Read about how commission is paid here.) It really makes your life easier to have one go-to person to work with when you're looking for a home. Then you don't have to explain what you're looking for over and over again. We might be biased, but we really think it makes sense for home sellers to have representation too. It's not free, but it is money well spent.

What does this mean to you?

Knowing about agency is important in a real estate transaction. It makes it clear who is working for you and who is not. Whenever you talk to a real estate agent, make sure you know who they are representing. Here are a few things to keep in mind:

• If you call an agent directly about their listing, they are probably working solely on behalf of the seller. If you walk into an open house, the friendly agent inside is probably representing the seller. If you tell them about your particular situation, they will be obligated to pass along the contents of your discussion to the seller. For example, suppose your particular situation requires that you find a house and be moved in by a certain date. If you mention that piece of information to the listing agent and then decide to make an offer later, they can use that information against you in the negotiating process knowing that you have a time constraint.
• If you're selling your home and you talk to an agent that is representing the buyer, they are obligated to tell the buyer anything you tell them about the sale. Suppose you mention that your asking price is $450,000, but that you put the house on the market expecting a lower offer and would consider an offer of $435,000. The agent that is representing the buyer will pass that along, and you may cheat yourself out of money if the buyer was willing to pay more than $435,000.

More reasons to work with an agent, specifically a Realtor.

• Buyer - Many people think that agents just help people find houses. While using their expertise to help a buyer locate a good match is definitely part of the job, it's certainly not the whole job. Where your agent can really earn their keep in the negotiating process, as well as keeping things going through the sometimes complicated series of events that occurs between the time an offer is made and accepted and you walk away with the keys.
• Seller - Many people think that agents just find buyers. That's a very important part of the job but it's not the whole job. Like mentioned above, where your agent can really earn their keep in the negotiating process, as well as keeping things going through the sometimes complicated series of events that occurs between the time an offer is made and accepted and you walk away with the proceeds of the sale.
• Why a Realtor? Not all agents are Realtors. The Realtor name indicates membership in one of the largest trade organizations going. Realtors subscribe to a code of ethics that goes above and beyond the requirements of the law in some cases. Psst...we're not just agents, we're Realtors.

Next steps to representation and more information

We work with both buyers and sellers, so feel free to contact us with your questions or to set up a relationship where we can represent you. There's a handy pamphlet put out by the state that summarizes the law. We'd be happy to send you one, just provide us your address and we'll send it out to you in a jiffy.