The Real Estate Business in Seattle and Washington State
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If you are from somewhere such as New England or New York, the legalities and customs of the real estate business in Washington State may seem bizarre. For an out-of-stater, familiarity with business practice here can be invaluable and save you thousands of dollars. So we always suggest you pay attention to it. Here's the story in excruciating detail:
Every real estate agent working here has to be licensed by the State of Washington. The licensee must post his or her real estate license with a broker in an office with a sign and public entrance. This can be a large company or a small one- or two-person office. Every real estate agent, however, operates his or her own business regardless of where the license is posted. The point is that you need to examine the agent much more carefully than the office he or she works out of.
There are many real estate companies in the greater Seattle area and thousands of real estate agents. Not surprisingly, there are some very good agents and some very bad agents. The latest figure from the state is that if you divide all the transactions by the total number of agents that the average agent does about 2 transactions per year. As you can see, most agents don't do very much business and many only work part time. In fact the state average is a 50% turnover every year.
Large companies like RE/MAX and Windermere are franchised. Their offices are owned and operated by different people, or Brokers. So don't be fooled into thinking that big is better, or that XYZ Company has a good reputation so all their agents must be good. Not true. It's the quality and expertise of your agent, not the company that really matters. The opposite is true as well, don't just think big is bad -- it depends on the individual agent. If you are interested in finding an agent you may want to take a look at our assessment of critical Realtor qualities here.
In
about 1993 in a new trend in the real estate business started to
emerge, Buyer Agency, where real estate agents actually represented
the buyer instead of the seller. But until just a few years ago,
most agents represented the seller in the transaction. That all
changed in January 1997 when a new state agency law was passed.
That law stated that the agent you work with represents you, unless
otherwise disclosed in writing. It established a legal structure
that provides for one agent, the Listing Agent, to represent the
seller and one agent, the Buyers Agent (aka "selling agent"), to
represent the buyer. If you are a buyer it is critical for you to
find an agent that truly understands this new role of Buyer Agency.
Many still don't. It's not good enough just to hear from an agent,
"Oh sure, I represent buyers." There are many agents that just represent
the "deal", they just want to sell the house and may not give their
client, the buyer, all the necessary information to make an intelligent
decision. We have a situation happen to us from time to time where
a buyer feels desperate to buy and will make a very bad buying decision.
We will advise the buyer that this isn't the right home to buy for
whatever the reason is, but buying can and usually is a very emotional
thing and we have to sit the client down and show them why this
isn't a good decision. It would have been much easier for us to
just write up the offer and move on, but that is not our business
philosophy.
Every part of the country has its own method of conducting a real estate transaction. On the East Coast, attorneys negotiate and close transactions. Here we typically use Escrow Agents for the closing and real estate agents do most or all of the negotiations. Lawyers rarely get involved here. In some other areas of the country a buyer gets possession of the property on signing the closing papers while sitting across a table from the sellers in the seller's home. The seller hands over the keys and the buyer hands over a check. It is very different here as the buyer usually never meets the seller, the buyer and seller sign at different times -- usually 2 or 3 days prior to closing. Also closing doesn't always mean possession. It is quite common here for possession to take place 3 days after closing. This creates some potential liabilities, but a smart agent knows how to deal with that effectively.
The Relationship of Geography and Value
When you think of Seattle, think wet. Even Seattle geography is defined and constrained by water. Puget Sound confines Seattle's western edge and Lake Washington limits the east. Lake Union and farther north, Green Lake, swim in the city like small inland seas. The ship canal cuts through neighborhoods from Montlake to Wallingford to Fremont to Queen Anne to Ballard to Shilshole Bay.
To go from one Seattle area neighborhood to another you usually have to cross a bridge. Because of the lack of foresight by the early city and transportation planners, traffic is -- and will continue to be -- a major problem and concern. The proximity of a neighborhood to the city center, principal areas of employment, or freeways affect that area's popularity and consequently its property values.
Over time, the area you live in influences future property value. For example, from 1997 to 1998 some areas of Seattle appreciated as much as 30 percent while others only increased about 5 percent. Insightful knowledge of neighborhoods can be critical to a Seattle area homebuyer or seller.
Of course, your unique needs, life style, and long-term goals will affect where you will best find a home in the Seattle area. We have an acute understanding of the historic vagaries of the Seattle housing market and what factors did and currently influence it. You might be interested in looking at What Should I Know Before I Buy? or What Should I Know Before I Sell?, our two sections on current market conditions.
If you have any further questions about how real estate works in Seattle, please get in touch. Call 206-283-9100 or email us below.
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among just 7% of agents in the Greater Seattle Area
to be chosen as FIVE STAR Real Estate Agents.