Washington License Types and Supervision

Washington has a unique license structure with specific terminology.

License Types

Individual Licenses

Broker

A broker is the entry-level license in Washington:

• Must work under a licensed firm
• Cannot operate independently
• Cannot receive compensation directly from clients
• Cannot supervise other licensees
• Must have designated broker supervision

Managing Broker

A managing broker has additional authority:

• Can supervise brokers
• Can manage branch offices
• Can serve as designated broker
• Requires 3 years broker experience + 90 hours additional education

Designated Broker

A designated broker is the managing broker who:

• Supervises an entire firm
• Is responsible for all firm activities
• Must be a managing broker
• Cannot be designated broker for multiple competing firms

Firm License

Every real estate firm must be separately licensed:

• Corporation, LLC, partnership, or sole proprietorship
• Must have a designated broker
• Registers each branch office
• Maintains trust accounts

Supervision Requirements

Designated Broker Responsibilities

The designated broker must:

1. Supervise all affiliated licensees (brokers and managing brokers)
2. Maintain written policies for supervision and compliance
3. Handle trust funds properly
4. Review transactions for compliance
5. Maintain records (minimum 3 years)
6. Respond to DOL inquiries and audits

Branch Office Requirements

Firms operating from multiple locations must:

1. Register each branch with DOL
2. Pay branch license fee ($146.25 per 2-year cycle)
3. Ensure adequate supervision at each location
4. Maintain required signage at each office

Branch Supervision

Branch offices must have:

• A managing broker or designated broker responsible for supervision
• Proper signage displaying firm name
• Access to transaction records

License Transfers

When a broker changes firms:

1. Current firm releases the broker through DOL system
2. New firm submits affiliation paperwork
3. Broker cannot practice between firms
4. Background check may not be required if transfer is timely

Compensation Rules

In Washington:

The Cardinal Rule

Brokers can ONLY receive compensation from their firm.

A broker cannot:

• Accept payment directly from a buyer or seller
• Accept payment from another firm
• Accept payment from another firm's broker
• Receive commission without firm involvement

Independent Contractor vs. Employee

Most Washington real estate brokers work as independent contractors:

Key Point: Regardless of employment status, all brokers must be supervised by their designated broker for licensed activities.