All Articles

DBrief Episode 05: Listing Brokers and Real Estate Agency Law Changes

DBrief Episode 05 is out and in this episode, Annie Fitzsimmons, your Washington REALTORS® Legal Hotline Lawyer, addresses important topics that DBs and industry leaders should be able to communicate to office brokers regarding the upcoming agency law changes effective January 1st, 2024.

Understanding Commissions and Firm Policies

A common query revolves around the notion of commissions being negotiable versus firms setting minimum compensation requirements. Historically, the real estate industry has emphasized the negotiability of commissions due to antitrust concerns. This principle remains true - commissions are always negotiable. However, it’s crucial to understand that this doesn’t restrict a designated broker from establishing minimum compensation amounts within their own firm for the services provided.

Annie clarifies that while commissions are negotiable and there's no industry-wide set or typical commission rate, individual firms can rightfully decide their own rates. This flexibility allows different real estate companies to charge varying percentages, respecting the competitive and diverse nature of the industry.

Advising Sellers on Compensation for Buyer Brokers

The next focal point is the role of listing brokers in advising sellers about offering compensation to buyer brokers. This becomes particularly relevant with the changing landscape of real estate transactions post-January 1st, 2024.

Listing brokers often face uncertainty about what advice they should offer to sellers regarding this. Annie suggests that brokers need to remember their primary role at the seller's table: to assist in attracting buyers and navigating the sale process. They should come prepared with strategies not only regarding pricing and property presentation but also regarding incentives to attract buyers.

Exploring Different Incentives to Attract Buyers

Annie encourages brokers to discuss various incentives with sellers, such as handling a portion of the buyer's closing costs, offering financing options, or even contributing to the buyer broker's compensation. Post-2024, buyers will have to consider three main financial aspects: down payment, closing costs, and now, buyer broker compensation. Sellers, therefore, need to think strategically about making their property more marketable by easing these financial burdens for potential buyers.

The Importance of Open Communication and Flexibility

Listing brokers should maintain open communication with sellers, advising them while respecting their autonomy in decision-making. For instance, if a seller opts not to offer any compensation, brokers should respect this choice but encourage them to remain open to negotiation if it becomes a stumbling block in the sale process.

Final Thoughts and Support for Brokers

We can't emphasize enough the importance of designated brokers and trainers in guiding listing brokers through these changes. While the suggestions provided are just that - suggestions - they are aimed at helping brokers navigate this transition smoothly. While the changes might seem daunting now, they will soon become the new norm in the real estate industry.

We are here to assist you! For further support and clarification, reach out through the Washington REALTORS® Legal Hotline!