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Real Estate Ethics

At Navigation Real Estate, we are committed to ethical practices in all aspects of our real estate firm and your transaction.

When choosing us to represent you, be rest-assured that our representation involves advocating your sale objectives with the highest ethical standards.

In the state of Washington, brokers and agents are required by law to obtain a license from the state when representing clients in the purchase and sale of real estate. Upon receiving their license, Washington law sets forth various duties that an agent owes to both the public and their clients.

In fact, Washington law (RCW 18.86.120) requires agents to provide each client a pamphlet on the law of real estate agency during the course of the agent's representation. Here is an overview of the statutes contained in the agency pamphlet:

  • RCW 18.86.010 contains the definitions contained in the other relevant statutes
  • RCW 18.86.020 describes how an agency relationship is formed
  • RCW 18.86.030 contains the legal duties an agent owes to both clients and all members of the public
  • RCW 18.86.040 contains the legal duties an agent owes to his or her client

For your review, we have published the various state laws (RCW's) regarding an agent's duties when representing clients in a real estate transaction:

RCW 18.86.010
Definitions

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

  1. "Agency relationship" means the agency relationship created under this chapter or by written agreement between a licensee and a buyer and/or seller relating to the performance of real estate brokerage services by the licensee.
  2. "Agent" means a licensee who has entered into an agency relationship with a buyer or seller.
  3. "Business opportunity" means and includes a business, business opportunity, and goodwill of an existing business, or any one or combination thereof.
  4. "Buyer" means an actual or prospective purchaser in a real estate transaction, or an actual or prospective tenant in a real estate rental or lease transaction, as applicable.
  5. "Buyer's agent" means a licensee who has entered into an agency relationship with only the buyer in a real estate transaction, and includes subagents engaged by a buyer's agent.
  6. "Confidential information" means information from or concerning a principal of a licensee that:

    (a) Was acquired by the licensee during the course of an agency relationship with the principal;

    (b) The principal reasonably expects to be kept confidential;

    (c) The principal has not disclosed or authorized to be disclosed to third parties;

    (d) Would, if disclosed, operate to the detriment of the principal; and

    (e) The principal personally would not be obligated to disclose to the other party.

  7. "Dual agent" means a licensee who has entered into an agency relationship with both the buyer and seller in the same transaction.
  8. "Licensee" means a real estate broker, associate real estate broker, or real estate salesperson, as those terms are defined in chapter 18.85 RCW.
  9. "Material fact" means information that substantially adversely affects the value of the property or a party's ability to perform its obligations in a real estate transaction, or operates to materially impair or defeat the purpose of the transaction. The fact or suspicion that the property, or any neighboring property, is or was the site of a murder, suicide or other death, rape or other sex crime, assault or other violent crime, robbery or burglary, illegal drug activity, gang-related activity, political or religious activity, or other act, occurrence, or use not adversely affecting the physical condition of or title to the property is not a material fact.
  10. "Principal" means a buyer or a seller who has entered into an agency relationship with a licensee.
  11. "Real estate brokerage services" means the rendering of services for which a real estate license is required under chapter 18.85 RCW.
  12. "Real estate transaction" or "transaction" means an actual or prospective transaction involving a purchase, sale, option, or exchange of any interest in real property or a business opportunity, or a lease or rental of real property. For purposes of this chapter, a prospective transaction does not exist until a written offer has been signed by at least one of the parties.
  13. "Seller" means an actual or prospective seller in a real estate transaction, or an actual or prospective landlord in a real estate rental or lease transaction, as applicable.
  14. "Seller's agent" means a licensee who has entered into an agency relationship with only the seller in a real estate transaction, and includes subagents engaged by a seller's agent.
  15. "Subagent" means a licensee who is engaged to act on behalf of a principal by the principal's agent where the principal has authorized the agent in writing to appoint subagents.

RCW 18.86.020
Agency relationship

  1. A licensee who performs real estate brokerage services for a buyer is a buyer's agent unless the:

    (a) Licensee has entered into a written agency agreement with the seller, in which case the licensee is a seller's agent;

    (b) Licensee has entered into a subagency agreement with the seller's agent, in which case the licensee is a seller's agent;

    (c) Licensee has entered into a written agency agreement with both parties, in which case the licensee is a dual agent;

    (d) Licensee is the seller or one of the sellers; or

    (e) Parties agree otherwise in writing after the licensee has complied with RCW 18.86.030(1)(f).

  2. In a transaction in which different licensees affiliated with the same broker represent different parties, the broker is a dual agent, and must obtain the written consent of both parties as required under RCW 18.86.060. In such a case, each licensee shall solely represent the party with whom the licensee has an agency relationship, unless all parties agree in writing that both licensees are dual agents.
  3. A licensee may work with a party in separate transactions pursuant to different relationships, including, but not limited to, representing a party in one transaction and at the same time not representing that party in a different transaction involving that party, if the licensee complies with this chapter in establishing the relationships for each transaction.

RCW 18.86.030
Duties of licensee

  1. Regardless of whether the licensee is an agent, a licensee owes to all parties to whom the licensee renders real estate brokerage services the following duties, which may not be waived:

    (a) To exercise reasonable skill and care;

    (b) To deal honestly and in good faith;

    (c) To present all written offers, written notices and other written communications to and from either party in a timely manner, regardless of whether the property is subject to an existing contract for sale or the buyer is already a party to an existing contract to purchase;

    (d) To disclose all existing material facts known by the licensee and not apparent or readily ascertainable to a party; provided that this subsection shall not be construed to imply any duty to investigate matters that the licensee has not agreed to investigate;

    (e) To account in a timely manner for all money and property received from or on behalf of either party;

    (f) To provide a pamphlet on the law of real estate agency in the form prescribed in RCW 18.86.120 to all parties to whom the licensee renders real estate brokerage services, before the party signs an agency agreement with the licensee, signs an offer in a real estate transaction handled by the licensee, consents to dual agency, or waives any rights, under RCW 18.86.020(1)(e), 18.86.040(1)(e), 18.86.050(1)(e), or

    18.86.060(2) (e) or (f), whichever occurs earliest; and

    (g) To disclose in writing to all parties to whom the licensee renders real estate brokerage services, before the party signs an offer in a real estate transaction handled by the licensee, whether the licensee represents the buyer, the seller, both parties, or neither party. The disclosure shall be set forth in a separate paragraph entitled "Agency Disclosure" in the agreement between the buyer and seller or in a separate writing entitled "Agency Disclosure."

  2. Unless otherwise agreed, a licensee owes no duty to conduct an independent inspection of the property or to conduct an independent investigation of either party's financial condition, and owes no duty to independently verify the accuracy or completeness of any statement made by either party or by any source reasonably believed by the licensee to be reliable.

RCW 18.86.040
Seller's agent - Duties

  1. Unless additional duties are agreed to in writing signed by a seller's agent, the duties of a seller's agent are limited to those set forth in RCW 18.86.030 and the following, which may not be waived except as expressly set forth in (e) of this subsection:

    (a) To be loyal to the seller by taking no action that is adverse or detrimental to the seller's interest in a transaction;

    (b) To timely disclose to the seller any conflicts of interest;

    (c) To advise the seller to seek expert advice on matters relating to the transaction that are beyond the agent's expertise;

    (d) Not to disclose any confidential information from or about the seller, except under subpoena or court order, even after termination of the agency relationship; and

    (e) Unless otherwise agreed to in writing after the seller's agent has complied with RCW 18.86.030(1)(f), to make a good faith and continuous effort to find a buyer for the property; except that a seller's agent is not obligated to seek additional offers to purchase the property while the property is subject to an existing contract for sale.

  2. (a) The showing of properties not owned by the seller to prospective buyers or the listing of competing properties for sale by a seller's agent does not in and of itself breach the duty of loyalty to the seller or create a conflict of interest.

    (b) The representation of more than one seller by different licensees affiliated with the same broker in competing transactions involving the same buyer does not in and of itself breach the duty of loyalty to the sellers or create a conflict of interest.

Questions
We welcome your questions regarding real estate agency and a real estate agent's duties under Washington law.

Please feel free to contact us at: (206) 903-1836, or by email at: info@navigationre.com.