Customer

Key Takeaways

• A customer works with a broker without being represented by one, so no services agreement is in place.
• The duties in RCW 18.86.030, including honesty and disclosure of known material facts, are owed to every party and may not be waived.
• Loyalty and confidentiality are owed only to the represented party, which is why a listing broker may repeat an unrepresented buyer's comments to the seller.
• Washington's agency statute does not define customer; RCW 18.86.010 defines principal for the represented party and RCW 18.86.120 speaks of an unrepresented party.

What It Means

A customer is a buyer or seller who works with a real estate broker without being represented by one. No services agreement has been signed, so no Agency Relationship exists, and the broker is not that person's advocate in the transaction.

That does not leave a customer unprotected. Washington's agency statute sets a short list of duties owed to every party in a transaction, and they cannot be waived: reasonable skill and care, honest and good faith dealing, timely presentation of written offers and notices, disclosure of material facts the broker knows and the party cannot readily discover, an accounting for money and property received, delivery of the state agency pamphlet with an acknowledgment of receipt, and written disclosure of the agency representation and compensation terms.

What a customer does not get is the second tier. Loyalty, confidentiality, disclosure of conflicts of interest, and advice to seek expert help go to the Client only. A customer who tells the listing broker how high they are willing to go should expect the seller to hear the number, because the broker owes loyalty to the seller and owes the customer no confidentiality at all.

How It Works in Washington

In Washington, going unrepresented is a defined status with rules attached rather than a gap in the law. RCW 18.86.030(1) sets the duties a broker owes to a principal and to all parties and says they may not be waived, so a broker cannot ask a customer to sign away honesty or material fact disclosure. RCW 18.86.120 requires the pamphlet titled Real Estate Brokerage in Washington to go to every party the broker renders services to and to any unrepresented party, which is how a customer finds out what representation would have added.

Direction matters too, and this is where Washington surprises people. Under RCW 18.86.020, a broker who performs brokerage services for a buyer is that buyer's agent unless the firm has appointed the broker to represent the seller, appointed the broker as a limited dual agent, or the broker is the seller. A Washington buyer working with a broker therefore becomes a represented Principal by default, and staying a customer is the exception, usually because the broker is already committed to the other side of the deal. Our guide to Washington's written services agreements covers how firms document that choice.

Example

Dale lists his Tacoma duplex at $540,000 with Nia, a broker at a local firm. Ben drives by, calls Nia directly, and asks her to write him an offer. Ben signs no buyer services agreement, so Nia stays the seller's agent and Ben is a customer.

Nia still owes Ben real things. She gives him the state agency pamphlet and collects his acknowledgment, tells him in writing that she represents Dale, presents his offer on time, and discloses the failed side sewer she already knows about. She writes Ben's offer at $525,000. When Ben mentions he could stretch to $535,000, Nia owes loyalty to Dale, so she passes the number along. Dale counters at $535,000, Ben accepts, and he pays $10,000 more than his opening figure. Nothing Nia did was improper. Ben simply had nobody on his side of that $10,000.

Common Mistakes and Exam Traps

• A customer is not owed loyalty, but a customer is still owed honesty, disclosure of known material facts, and an accounting under RCW 18.86.030.
• Helping a buyer does not automatically make that buyer a customer, because RCW 18.86.020 runs the other way in Washington and treats buyer agency as the default.
• A customer who contributes to the commission is still a customer, since representation comes from the services agreement and not from compensation.
• Information a customer volunteers can be passed straight to the broker's principal, because confidentiality is owed only to the represented party.