DBrief Episode 02: New Real Estate Brokerage Services Agreement Standards
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Welcome to the second installment of our DBrief video series, specifically tailored for Designated Brokers, Managing Brokers, and our Broker-owner community. This episode aims to address real estate brokerage service agreements, at topic that's becoming increasingly relevant as January 1st approaches.
A Legal Perspective from Annie Fitzsimmons
The language of the statute necessitates that the agreement be signed "as soon as reasonably practical" after the provision of real estate brokerage services. But what does this truly mean?
While many brokers hope this implies they can engage with buyers informally, perhaps even showing homes over several days before obtaining a formal commitment, this isn’t the case. The true intent is much sooner than many expect.
Consider this example: a broker meets a potential buyer at an open house. If they schedule a subsequent meeting to discuss potential homes to view, this second meeting is when the agency agreement should be signed. The services were already provided at the open house, and the follow-up meeting is when it becomes "reasonably practical" to finalize an agreement.
Challenges Ahead for Designated Brokers
Unsurprisingly, many brokers might find this new standard somewhat rushed. The challenge is that brokers might feel pressured to enter an agreement without adequately knowing the buyer. But there's a solution: the non-exclusive agency agreement. Starting January 1st, the buyer agency form will offer an option to check "exclusive" or "non-exclusive." For brokers who want flexibility and less commitment initially, marking "non-exclusive" can be the answer. As the relationship matures, this can then be amended to an "exclusive" agreement if both parties agree.
Training & Resources
Designated brokers and managing brokers have an immense responsibility to understand and communicate these new standards. At Washington REALTORS®, we're here to equip and empower you. On the WR DBrief page at warealtor.org/DBrief, you'll find resources to assist in training your brokers. Stay tuned for upcoming PowerPoint slides to scenario-based exercises, these tools are designed to facilitate discussion and clarity.
Furthermore, a training class will be available on December 5th, following the success of our October 31st class. This "train the trainer" session aims to educate DBs on effectively communicating these new guidelines to your brokers. Register for that class here.
If there are further questions or concerns, remember that the Washington REALTOR® Legal Hotline is an available resource. We thank you for being a valued member of the Washington REALTOR® community and encourage feedback to continually improve our offerings.