Designated agency

Key Takeaways

• Designated agency places one appointed broker with the buyer and a different appointed broker with the seller inside a single real estate firm.
• Under RCW 18.86.060(5), each appointed broker solely represents the party that broker was appointed to represent.
• The firm's designated broker and any managing broker supervising both brokers become limited dual agents in that transaction under RCW 18.86.060(5).
• A services agreement must state whether the principal consents to the firm's designated broker and supervising managing broker acting as limited dual agents, per RCW 18.86.020(2)(b)(v).

What It Means

Designated agency is how one real estate firm handles both sides of a single deal without folding both parties into one representative. The firm appoints one broker as the buyer's agent and a different broker as the seller's agent. Each of those brokers works only for the party they were appointed to, so the buyer's broker can push for a lower price and the seller's broker can push back, even though both are paid through the same office.

Washington course materials sometimes call the same arrangement split agency. The label changes nothing. What makes designated agency distinctive is the layer above the two brokers. Somebody in that firm supervises both of them, and that supervisor cannot take a side. Washington resolves the conflict through Limited Dual Agency at the supervisory level rather than pretending a firm with brokers on both sides has undivided loyalty.

That is why Washington treats designated agency as a consented form of Dual Agency rather than a clever way to avoid one.

How It Works in Washington

RCW 18.86.060(5) is the controlling sentence. In a transaction in which different brokers affiliated with the same firm represent different parties, the firm's designated broker, and any managing broker responsible for the supervision of both brokers, is a limited dual agent. In that situation each appointed broker solely represents the party with whom the appointed broker has an agency relationship.

Consent is never assumed. RCW 18.86.060(1) permits a broker to act as a limited dual agent only with the written consent of both parties, set forth in the services agreement. RCW 18.86.020(2)(b)(v) requires the services agreement to state whether the principal consents to the firm's Designated Broker and any supervising managing broker acting as limited dual agents in exactly this situation. A separate item, RCW 18.86.020(2)(b)(iv), covers consent to the appointed broker personally acting as a limited dual agent, and that consent must be separately initialed by the principal. Missing initials are a documentation failure, and the school's guide to audit-proofing a Washington practice walks through how those files get reviewed.

RCW 18.86.010(2) closes the loop by defining an agent to include the firm's designated broker and any managing broker responsible for supervising that broker.

Example

Olympic Peninsula Realty has 22 brokers and one designated broker, Renee. Broker Andre is appointed as the seller's agent for a Sequim home listed at $540,000. Broker Priya, at the same firm, is appointed as the buyer's agent for the Nguyen family, who offer $518,000.

Andre still works only for the seller and Priya still works only for the Nguyens, so Priya is free to point out that the home has sat 71 days and to argue the $22,000 gap is justified. Renee is in a different position. Because two of her brokers represent opposite parties, RCW 18.86.060(5) makes Renee a limited dual agent in this transaction, so she may not coach Andre on the Nguyens' top number and may not advocate terms that favor one side. Both services agreements had to state whether each party consented to Renee serving in that role, and in this file both did.

Common Mistakes and Exam Traps

• Designated agency does not make the two appointed brokers dual agents, because RCW 18.86.060(5) has each one solely represent their own principal.
• The people who become limited dual agents are the firm's designated broker and any managing broker supervising both brokers, not the two appointed brokers and not the firm's owner.
• Split agency is another name for designated agency, so a question using either term is asking about the same arrangement.
• Limited dual agency always requires written consent set forth in the services agreement under RCW 18.86.060(1), and it is never created silently by the firm's structure.