2.1 Washington Real Estate Agency Law (RCW 18.86)
Key Takeaways
- RCW 18.86 (The Real Estate Brokerage Relationships Act) governs all agency relationships in Washington
- Washington recognizes seller agency, buyer agency, and dual agency relationships
- The pamphlet "The Law of Real Estate Agency" must be provided to all parties at first contact
- A written agency agreement is required to establish a client relationship
- Washington presumes a buyer agency relationship unless a written agreement specifies otherwise
RCW 18.86, the Real Estate Brokerage Relationships Act, is Washington's primary law governing real estate agency relationships.
Key Agency Terminology
| Term | Definition |
|---|---|
| Principal | The party (buyer or seller) who has an agency relationship with a broker |
| Agent | The broker who has an agency relationship with a principal |
| Firm | The licensed real estate company |
| Client | Party who has signed a written agency agreement |
| Customer | Party not represented but may receive limited services |
Types of Agency Relationships
Seller Agency
The broker represents the seller:
- Owes fiduciary duties to seller
- Must promote seller's interests
- May show buyer properties and perform ministerial acts
Buyer Agency
The broker represents the buyer:
- Owes fiduciary duties to buyer
- Must promote buyer's interests
- Washington presumes buyer agency when working with unrepresented buyers
Dual Agency
The broker represents both buyer and seller in the same transaction:
- Requires written consent from both parties
- Limited ability to advocate for either party
- Must treat both parties honestly and fairly
Critical Point: Washington presumes buyer agency. If a broker works with a buyer without a written agreement specifying otherwise, buyer agency is presumed by law.
Creating Agency Relationships
A client relationship requires:
- Written agreement signed by both broker and client
- Clear identification of the type of representation
- Disclosure of compensation arrangements
- Description of services to be provided
Required Disclosures Under RCW 18.86
The Pamphlet: "The Law of Real Estate Agency"
Washington requires brokers to provide the DOL pamphlet "The Law of Real Estate Agency" to all parties:
| When | To Whom |
|---|---|
| First contact | All prospective buyers and sellers |
| Before services | Anyone receiving real estate services |
| Documentation | Receipt should be acknowledged |
The pamphlet explains:
- Types of agency relationships
- Duties owed by brokers
- How agency relationships are created
- Dual agency implications
Agency Disclosure Timing
| Trigger | Action Required |
|---|---|
| First meeting | Provide agency pamphlet |
| Before showing property | Disclose who you represent |
| Before receiving confidential info | Clarify relationship |
| Before drafting offers | Confirm agency relationship |
Broker Duties Under Washington Law
Duties to All Parties (Regardless of Agency)
All Washington brokers owe these duties to every party:
- Honesty and good faith - Deal honestly with all parties
- Present all offers - Unless instructed otherwise by principal
- Disclose material facts - Known facts affecting the property
- Account for money/documents - Proper handling of all items
- Provide agency pamphlet - To all parties
- Exercise reasonable skill and care
Additional Duties to Principals (Clients)
Brokers owe these additional duties to their principals (clients):
- Loyalty - Act in the principal's best interest
- Confidentiality - Protect confidential information
- Disclosure - Disclose all relevant information to principal
- Obedience - Follow lawful instructions
- Reasonable care and skill - Perform competently
- Accounting - Account for all money and property
What document must a Washington broker provide to all parties at first contact?
In Washington, what agency relationship is presumed when a broker works with a buyer without a written agreement?