[WSBARP] real estate commissions

[Kary Krismer]

Just to follow up on this a bit more, there are at least two RCWs in 
play.  18.85.301 (Sharing commissions) and 18.85.151(8) (Exemptions from 
licensing).

The former prevents sharing commissions with unlicensed 
persons/entities, and would seemingly be problematic regarding rebates 
to a buyer.  However, a rebate has apparently been seen as being merely 
an agreement to reduce compensation.  Personally I'm not familiar with 
the legal basis for such a rational, particularly when the reduction of 
commission does not go back to the person/entity paying the commission.  
I'd be interested in seeing that private letter ruling on rebating 
commission, but it may be only of historical interest at this point.

Note that now under the new statewide listing agreements it's typically 
the seller paying the commission to the buyer's broker's brokerage, 
under a third party beneficiary theory.  So it's no longer the firm 
sharing the commission, as opposed to clearly reducing the commission, 
and it really would be more akin to a seller paying a portion of buyer's 
closing costs.  So 18.85.301 may no longer be much of a concern on this 
issue, particularly given the forms contemplate such a rebate.  The 
standard listing agreement indicates that the compensation may be 
modified by the PSA, and there's form 41C providing for rebates.

The latter statute creates an exception to licensing for referral fees 
as long as the referral fee is not contingent on the closing of a 
transaction.  So technically that would not be sharing a commission 
since it's due and owing regardless of whether a commission is earned.

Kary L. Krismer
John L. Scott, Inc.
206 723-2148

On 11/10/2022 9:57 AM, Erik Marks wrote:
>
> When I first acquired a broker’s license, I would routinely rebate 50% 
> of the buyer’s agent commission to my client when the client found the 
> home on their own and I didn’t need to do any showings.  (This was 
> 2008-2012 timeframe, when that sort of thing was easy to achieve.)  At 
> the time I did pursue the question about legality of the rebate, and I 
> got to a personal comfort level that such commission rebates to the 
> buyer were allowed.  My recollection is that I achieved that comfort 
> level through research, a phone call with DOL, and review of a private 
> letter ruling issued by DOL to another brokerage who was operating 
> with a similar structure.
>
> Erik
>
> -- 
>
> */Erik G Marks/*
>
> */Attorney at Law/*
> PO Box 16247
>
> Seattle, WA 98116
>
>
> (206) 612-8653
> _erik at egmrealestate.com <mailto:erik at egmrealestate.com>_
>
> Physical Office:
> 4220 SW Spokane St
> Seattle, WA 98116
>
>
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