Non-agency

Key Takeaways

• In a non-agency relationship the person is a customer rather than a client, and receives no loyalty and no confidentiality from the broker.
• Since January 1, 2024, a broker who performs brokerage services for a buyer is that buyer's agent unless the firm appointed the broker to the seller, appointed the broker to both parties as a limited dual agent, or the broker is the seller (RCW 18.86.020(1)).
• Skill and care, honesty and good faith, timely delivery of written communications, disclosure of known material facts, and timely accounting are owed to all parties in a transaction and may not be waived (RCW 18.86.030(1)).
• A party not represented by a broker must still receive the Real Estate Brokerage in Washington pamphlet before signing an offer or as soon as reasonably practical (RCW 18.86.030(1)(f) and RCW 18.86.120).

What It Means

Non-agency describes a working relationship in which a broker helps someone without representing them. That person is a Customer rather than a Client, and receives the baseline duties every Washington broker owes, but none of the agency duties such as loyalty and confidentiality.

Washington narrowed this ground on January 1, 2024. RCW 18.86.020(1) now provides that a broker who performs real estate brokerage services for a buyer is a buyer's agent unless the firm appointed that broker to represent the seller, appointed the broker to represent both parties as a limited dual agent, or the broker is the seller. Senate Bill 5191 deleted the older option that let the parties simply agree in writing that the broker represented no one, and it struck the words neither party from the list of choices in the written agency disclosure at RCW 18.86.030(1)(g).

What survives is the unrepresented party. A seller's agent dealing with a buyer who has engaged no firm is in a non-agency relationship with that buyer.

How It Works in Washington

The Washington floor is RCW 18.86.030(1), which since January 1, 2024 provides that a broker owes the listed duties to their principal and to all parties in a transaction, and that they may not be waived. Those duties are reasonable skill and care, dealing honestly and in good faith, presenting written offers, notices and other written communications in a timely manner, disclosing all existing material facts known to the broker and not apparent or readily ascertainable, and accounting in a timely manner for money and property received. A customer gets every one of them.

What a customer does not get are the agency duties in RCW 18.86.040 and RCW 18.86.050: loyalty, confidentiality, timely disclosure of conflicts, and the referral to expert advice. Written Agency Disclosure is still required under RCW 18.86.030(1)(g), and the pamphlet must reach any party not represented by a broker before that party signs an offer or as soon as reasonably practical (RCW 18.86.120).

Example

Broker Priya is the seller's agent for a Spokane duplex listed at $389,000. Ben sees the sign, calls Priya directly, and asks her to write his offer. He has no services agreement with any firm.

Priya is not Ben's agent. She gives him the Real Estate Brokerage in Washington pamphlet and the written agency disclosure stating that she represents the seller. When Ben mentions he could stretch to $395,000, Priya may pass that along to her seller, because she owes Ben no confidentiality. She must still tell Ben that the north unit's furnace failed inspection last month, since that material fact is known to her and RCW 18.86.030(1)(d) runs to all parties. Ben offers $380,000, the seller counters at $392,000, and they close at $386,000. The seller's firm earns the 3 percent set in the listing agreement, or $11,580, and Ben pays no brokerage compensation because he engaged no firm.

Common Mistakes and Exam Traps

• Non-agency is not a lower standard of honesty. The duties in RCW 18.86.030(1) run to all parties in the transaction and cannot be waived by anyone.
• Customer and client are not interchangeable. A client has a services agreement and an appointed broker, a customer does not.
• After January 1, 2024, a Washington firm can no longer work with a buyer as a non-agent by written consent. That buyer's broker is the buyer's agent unless one of the three exceptions in RCW 18.86.020(1) applies.
• An unrepresented buyer still receives the Real Estate Brokerage in Washington pamphlet. Delivery is not limited to clients.