Broker

Key Takeaways

• Washington does not issue a salesperson license. The entry-level real estate license in this state is the broker license (RCW 18.85.481).
• A Washington broker license requires 90 hours of approved instruction, including three hours on fair housing and consumer protection, plus a passing exam score (RCW 18.85.101).
• A broker is licensed to one firm at a time and is supervised by that firm's designated broker or a managing broker (RCW 18.85.101).
• A broker who supervises or controls other brokers must hold a managing broker license (RCW 18.85.275).

What It Means

A broker in Washington is a licensed individual who performs real estate work for one licensed firm, under supervision. RCW 18.85.011 defines a broker as a natural person acting on behalf of a real estate firm to perform real estate brokerage services under the supervision of a designated broker or managing broker. That last phrase carries the limits of the license: a broker has no authority to operate independently and no authority to supervise another licensee.

Brokerage Services cover more ground than most students expect. RCW 18.85.011 lists listing, selling, purchasing, exchanging, optioning, leasing, and renting real estate, negotiating those transactions, advertising that one is engaged in brokerage, advising buyers, sellers, landlords, or tenants, issuing a broker's price opinion, collecting or holding funds, and performing property management.

Washington also dropped the old two-tier structure that most national textbooks still describe. Since July 1, 2010, the entry-level license here is the broker license and the supervisory license is the Managing Broker license.

How It Works in Washington

RCW 18.85.101 sets the entry requirements. An applicant must be at least 18 years old and hold a high school diploma or its equivalent. On top of that come 90 hours of approved instruction in real estate fundamentals and practices, three of those hours on fair housing and consumer protection, with each course completed within two years of the exam application. Then comes a passing score on the broker license examination. The first renewal adds another 90 hours, including a real estate law course that carries its own three fair housing and consumer protection hours. Missing a renewal is expensive, and our guide to renewing and reinstating a Washington broker license walks through the recovery path.

Once licensed, a broker is licensed to one firm at a time and is supervised by that firm's Designated Broker or an assigned managing broker (RCW 18.85.101). For the first two years of licensure, RCW 18.85.275 requires the supervising managing broker to provide Heightened Supervision. A broker who begins supervising other licensees has outgrown the license, because RCW 18.85.275(5) requires a managing broker license for anyone who supervises or exercises right of control over other brokers.

The license is also the ticket to getting paid. RCW 18.85.331 makes it unlawful to act as a broker without one, and blocks any suit to collect a commission unless the plaintiff proves licensure. RCW 18.85.301 adds that a broker may be paid only through the firm's designated broker.

Example

Maya passes the Washington broker exam in March and affiliates with Cascade Realty, a licensed firm whose designated broker is Ellen. Ellen assigns Rick, a managing broker, to supervise her, and because Maya is in her first two years, Rick reviews her paperwork before it goes out.

In June, Maya lists a Tacoma house and it sells for $510,000. The listing side of the fee is 2.5 percent of the sale price, or $12,750. That money is paid to Cascade Realty, not to Maya, because RCW 18.85.301 allows a broker to be paid only through the firm's designated broker. Cascade Realty then pays Maya on her 70/30 split: $8,925 to Maya, $3,825 retained by the firm. If Maya had taken the listing before her license was issued, RCW 18.85.331 would have barred her from suing for any of it.

Common Mistakes and Exam Traps

• A question that offers "salesperson" as the Washington entry-level license is testing the 2010 change. Existing salesperson licenses became broker licenses (RCW 18.85.481).
• Broker and designated broker are different roles. The designated broker owns or holds a controlling interest in the firm and carries a designated broker endorsement on a managing broker license (RCW 18.85.011).
• National materials often use "broker" to mean the person in charge of the office. In Washington the broker is the entry-level licensee.
• A broker cannot be licensed to two firms at once. RCW 18.85.101 ties the license to one firm at a time, so changing firms is a transfer, not an addition.