When & How Should You Sign A Buyer Rep Agreement?

For more than 20 years, buyer representation agreements have been the best practice for both buyers and brokers. They set a clear, written understanding of each parties responsibilities and expectations as they navigate the process of purchasing a home. As Washington State continues to evolve our industry leading practices for real estate brokerage & agency, these agreements became required by law in the beginning of 2024 if a broker wants to get paid for their time and service to buyers. Failure to have an agreement in place while representing a buyer could result in forfeiture of compensation and potential action against the broker/brokerage license including reprimand, fine or suspension.
 

When Must It Be Signed?

The implementation of this change has mostly been smooth as most brokers are using straightforward boilerplate agreements which clearly communicate the responsibilities and commitments of each side. Though the most frequently misunderstood part of this new law by buyers and brokers is when these agreements must be executed with many thinking can wait days or weeks. However, the law is clear when you read RCW 18.86.020 (Agency relationship—Services agreement) Section 2a:

"A firm must enter into a services agreement with the principal before, or as soon as reasonably practical after, its appointed broker commences rendering real estate brokerage services to, or on behalf of, the principal."

While "rendering estate brokerage services" is not specifically defined in law, it's generally accepted among legal experts that most any service beyond an initial interview with a client is considered rendering service. Even early consultations can meet this definition as clients are often disclosing personal information which should be protected via agency laws and brokers are developing & recommending preparations and strategies. Certainly, strategic searches for property, showings & evaluations of homes and planning offers all well into the rendering of services.

Brokers Who Don't Know & Don't Care?

So, if or when, you hear a broker say "no worries, let's go view a few properties or wait a few weeks... and then we'll review & sign a buyer rep agreement" or worse yet, the broker doesn't discuss these agreements at all... just know either they don't know the law or they don't care about its specifics. Frankly, we don't know which is worse... if they don't know or care about these details, then what other important details are they missing in how they represent clients?

 What Should You Do?

Knowing all this, what are the best steps you can take when beginning your search as a buyer?

1. Knowledge: Look for brokers who understand and articulate this requirement.... and ensure they understand the importance of the timeline... if they don't probably best to move on.
2. Before signing an agreement, Ask:
• How will you help me as a buyer?
  They should articulate a full process from initial consultation through preparation, searches, showings, evaluation, offers and closing.
• How will you be compensated?
  They should provide the specific process and market data.
• How can the contract be terminated if you do not deliver the services promised?
  This is trickier as it can be subjective... however if they don't meet their promises they should provide a reasonable and fair path to separation without waiting months. Likewise there should be protection for the broker to ensure if they help you prepare to buy, and find the property you want, you won't just walk away and have a 'friend with a license' write up the contract and get the compensation for their time & efforts.  
3. Trial Period: If you want a 'trial' period to see if you like how they operate, negotiate fair terms to you and the broker.
   While the State states the 'default' term of these agreements are 60 days (RCW 18.86.020.2.b.i), they can be shorter or longer, and can even be limited to a single property or date of service. Though please recognize just as most people don't like unstable employment, neither do great brokers and they will focus their time and expertise on those clients who are committed to their goals of purchasing a home and to the broker as their advisor. Once you feel confident in their ability to help you, consider making a longer commitment of 30/60/90 days.

Thankfully, these new laws are increasing transparency for buyers which is a great evolution for our industry and we're grateful. We just hope providing clarity to the details of these new laws will help you find the best brokers in the business... as right now the 'chill' and 'easy' brokers who don't discuss these agreements or delay them aren't actually operating at the highest levels of service to you or the industry.