On July 1, 2010, real estate salespeople in Washington State will become brokers. It’s taken the Department of Licensing a total of seven years from initial research to the final implementation having started in 2003 on this project. The revisions passed the legislature in 2008 and the law is now in effect. There are many, many questions still to be answered during the rule-making process which makes the transition challenging but not impossible. Here are some of the higlights:
- There are now two levels of licensure for individuals: broker and managing broker.
- The ‘salesperson’ category has been eliminated. The entry-level license for an individual is now “broker.”
- A person with three years of experience as a broker will now be able to become a managing broker.
- The 2010 license law requires the licensing of brokerage firms. A real estate firm is any business entity (including a corporation, partnership, or sole proprietorship) that conducts real estate activities.
- All real estate services contracts are between the client and brokerage firm, instead of between the client and any individual licensee. A listing agreement is the property of the brokerage firm.
- A designated broker is responsible for meeting all recordkeeping and trust fund requirements, plus he/she has supervisory responsibility over all the firm’s licensees.
- All first-time broker license applicants must submit fingerprint identification.
- Those renewing their licenses must also submit fingerprints and have their backgrounds checked every six years.
- Educational requirements have been increased for first time broker licensees as well as managing brokers. Existing licensees must take a transition course to update them on the licensing law changes.
- A broker with less than two years’ experience (remember, I’m talking about a new real estate agent, now referred to as a “broker) is subject to one additional responsibility: working under a heightened degree of supervision. He or she must conduct all brokerage activities under the direct supervision of a designated or managing broker, and submit all signed documents to the designated broker for her review, within five days of the signing, and submit evidence of their required education courses to the designated or managing broker.
There are more changes relating to recordkeeping, trust accounts, the role of firms, and property management. The complete law and its rules can be found here.
I highly recommend all real estate agents brokers and other interested stakeholders join the DOL’s listserve. DOL sends out a new set of Frequently Asked Questions each week and has been doing a great job of keeping us up to date during the transition.
During the Transition Course, I’ve been asking my students at the end of class if they believe the new law changes will help the industry, hurt, or make no difference. The majority of students believe the changes will help the industry raise the bar. The three biggest changes they are happy with are: 1) the increased level of supervision required of new licensees; 2) the mandatory fingerprint/background check; and, 3) the increased level of required prelicensing education for new agents brokers.
As a side-note, I’ve had more than a handful of students ask what kinds of conviction on the background check would dis-qualify them from keeping their real estate license. For the answer to that question, follow this link and scroll down to the section on “fingerprinting.”