What is Agency Law?

The Washington law titled “Real Estate Brokerage Relationships” (RCW 18.86) is commonly referred to as the “Agency Law”. It is the state law that addresses requirements associated with the relationship between real estate brokers and consumers.

What has changed?

Washington State’s Agency Law was revised effective January 1, 2024. The revised law codifies the best industry practices into law for both buyers and sellers. Brokers representing sellers AND buyers are now required to negotiate and enter into a written contract with you, as the client, ensuring you have a clear understanding of your agency relationship and the cost of real estate brokerage services. Brokers must enter this contract before providing significant services to you.

What can I expect?

Whether you are selling your home or looking to purchase, you can expect your real estate broker to explain your agency relationship and the cost of the broker’s services. Once you decide to work with a real estate broker, they will provide you with a written Agency Agreement that defines your agency relationship, the cost of the broker’s services, and how the broker’s compensation will be paid. In the agreement, you will find:

  • The terms of the agreement;
  • The name of the broker appointed as your agent;
  • Whether the agency relationship is exclusive or non-exclusive;
  • A provision that allows you to choose whether you consent to your agent representing the other party in your same transaction (referred to as “limited dual agency”);
  • A provision that allows you to consent to your agent’s designated broker/managing broker’s limited dual agency if the other party is represented by another broker in your agent’s real estate firm;
  • The amount the firm will be compensated and who will pay the compensation; and
  • Any other agreements between you and your broker.
What did Washington REALTORS® have to do with the Agency Law Revisions?

Washington REALTORS® sifted broker practices across the nation, rejected those that lead to consumer confusion and embraced those practices that create clarity for consumers when buying or selling real estate. These consumer-friendly practices prioritize fairness, transparency and flexibility for the consumer. We collaborated closely with legislators to elevate these practices to legal mandates, ensuring that these changes serve the best interests of consumers and brokers. Our advocacy and dedication led to the unanimous passage of this legislation during the 2023 Legislative Session.