DC Real Estate Agency And Agreements

Author: Susan Isaacs | The Isaacs Team

Learn about real estate agency and agreements in the District of Columbia. Our page of explainers and resources to help you understand the roles, agreements and choices available for your transaction.

DC Listing Agreements And Terms | Sellers

Understanding the types of real estate agency for DC home sellers and basic provisions of the listing agreement.

TYPES OF LISTING AGREEMENTS

  • Open Listing:  Owners can sell their home themselves under the terms of this non-exclusive agreement. Owners may have listings with more than one brokerage. Commission is paid to the agency who is the procuring cause  for a ready, willing and able buyer who makes an offer on the property.  Should the owners find the buyer themselves, no commission is due. Full service real estate brokerages, therefore, are not motivated to accept open listings;
  • Exclusive Agency Listing: The broker will be the only brokerage representing the owner, but the owner may still sell the property themselves and avoid paying commission under the terms of that provision. The broker may cooperate with other brokerages to bring in a buyer and the listing commission is split between the two brokerages. Exceptions and deadlines may be included in the agreement.
  • Multiple Agencies Listing:  When a seller uses more than one brokerage to list their home, the listing agreement used must be for the jurisdiction where the property is located. It may be difficult to get brokerages to agree to a multiple agency agreement as their agents will put a great deal of time, effort and expense into listing the home, but are not guaranteed they’ll be paid for their work.
  • Single Agent Buy & Sell Transaction: This is different than Dual Agency, where the agent represents both the buyer and seller of the same property. Sellers of a home purchasing their next home using their listing agent as their buyer agent fall into this category.
  • Designated Agent: Two agents affiliated with the same brokerage represent the property owner and the buyer of the property. Each agent is designated by the brokerage as the representative of one party only.
  • Dual Agency: Single agent representing both the property owner and the buyer of the same property.

KEY TERMS OF LISTING AGREEMENTS

  • Jurisdiction
  • Type of agreement
  • Length of agreement
  • Listing price
  • Commission percentage, fees and provisions
  • Private Exclusive, public MLS or hybrid
  • Keys & lockboxes
  • Inclusions/Exclusions
  • Property condition
  • Property disclosure of material facts
  • Lead paint disclosures
  • Pest Inspection terms
  • Encumbrances/Liens/Title
  • Authority to disclose existing offers

LISTING TOPICS TO DISCUSS

In addition to reviewing each section of the Agreement with your agent, you’ll want to discuss terms of the agreement. Here are some of the points you might consider:

What are commission fees?
Discuss the 2024 NAR settlement and how it affects commission rules and practices.

  • Must sellers offer buyer side commission (the answer is no)?
  • If sellers choose to compensate buyer agents, in what percentage?
  • Will the cooperative compensation be built into the list price?
  • How is cooperative compensation legally applied?
  • When and how are brokerages and their agents paid? Are there any additional fees, such as a brokerage “additional commission” fee?

How will the listing price be determined?

  • What type of price flux can be expected in the current market?
  • Discuss listing termination/expiration and whether or not an early termination fee will be included

Discuss showing restrictions

  • Are there days and times the property will be unavailable?
  • Will showings be ‘go and show’ or require an appointment?

Discuss the offer process

  • How will offers be handled?

Is the property a condo or co-op?

  • Discuss condo association documents, fees & turnaround time. There are three separate sets of documents involved in a condominium resale; the Condominium Questionnaire (lenders), the Condominium Closing statement (supplied to title. Some are free, some associations charge the seller up to $150. Many title companies include this fee in the Seller’s closing cost escrow, but some title attorneys and title companies may require it to be paid upfront), and the Resale Certificate Package (commonly known as “condo documents,” this package may be generated electronically or printed. The fee to Sellers commonly ranges from $250.-$400. depending on the association and management company).
  • Discuss condo listing rules: Are there rules regarding open houses, signage, elevator use for staging and renovation materials/crew, etc.? It is up to the seller to divulge these to the agent at the time the listing is taken.

Is the seller in process of, or planning to renovate?

  • Discuss scope, timeline, permitting and project management with the agent
  • Discuss any board requirements pertaining to condos and coops if your property is of that type.

Is any portion of the property leased?

  • If all or a portion of your property is leased, or the property is multifamily, discuss lease terms and provide copies of leases, discuss required tenancy documentation and contract addendums, as well as TOPA.

Who pays what?

  • Who pays costs of photography, floor plans, virtual and/or physical staging, marketing & advertising? If staging, which company will be used, what style and color scheme are preferred, what is the timeline for staging, term of the staging agreement, and target date for removal?

Will the listing be active on MLS, on MLS or Compass Coming Soon, or be a Private Exclusive listing?

  • Discuss the procedures and implications for each. For Private Exclusive listings, how long will the PX term continue? Will the listing be moved to Active status on MLS after a specified period of time?

Will the listing be a 1031 Exchange?

  • Who will act as the Intermediary? Will it be a simultaneous, delayed, reverse, improvement or boot exchange? Has the replacement property been identified? Timeline?

DC Buyer Agency Agreements & Terms

Understanding the basic provisions of the DC Buyer Agency Agreement is key to a smooth and successful transaction.

WHAT IS BUYER AGENCY?

It is a real estate agency relationship between a a buyer principal and real estate brokerage, designating a licensed real estate agent to perform specified duties for the buyer.

The buyer agency agreement (BAA), is a contractual agreement between the buyer and brokerage/agent that dictates the provisions, terms and conditions of their working relationship.

Buyer Agency protects buyers and ensures their DC real estate agent works in their best interests, not the seller’s, providing the duties of loyalty, care, confidentiality and other fiduciary duties. Agents who are not acting as buyer agents are effectively subagents of the seller.

TYPES OF DISTRICT OF COLUMBIA BUYER AGENCY

  • Single Agency: An agent from brokerage A represents the seller and another agent from brokerage B represents the buyer in a transaction
  • Single Agent Buy & Sell Transaction (see above)
  • Multiple Agents: As a buyer, you can choose to have one agent covering Virginia real estate, one covering DC real estate and one covering MD real estate if you’re looking at property in all those jurisdictions and you think working with different agents will benefit you. Agents may choose not to work with you under this scenario as it becomes a complex situation requiring extensive communication and disclosure,  overlapping neighborhood boundaries can become an issue, and scheduling showings/tours can become a logistical issue, especially if agents are affiliated with different brokerages.  This can lead to disputes and violations of agreements that may result in agents taking action against one another and/or the buyer
  • Transaction Agents: These agents do not owe a fiduciary duty to either the buyer or the seller and do not represent either side. Instead, they facilitate the transaction by providing the paperwork for one or both sides and managing the transaction in the most basic manner
  • DualAgency:”Dual Representation” occurs when Seller or Landlord has entered into a listing agreement with a licensee and the Buyer or Tenant has entered into a buyer brokerage agreement with the same licensee. When the parties agree to dual representation, the ability of the licensee and the brokerage firm to represent either party fully and exclusively is limited. The confidentiality of all clients shall be maintained. Prior to entering into a contract in which the buyer and seller are represented by Dual Agency, this relationship must be disclosed/confirmed in writing. The Isaacs Team LLC does not practice Dual Agency except under very limited special circumstances
  • Designated Agent: Agent who is designated by the broker to represent either the buyer or the seller in a dual agency transaction. “Designated Representation” occurs when the Seller or Landlord has entered into a listing agreement with a licensee and the Buyer or Tenant has entered into a buyer brokerage agreement with a different licensee affiliated with the same firm. Each of the licensees, known as Designated Representatives, represents fully the interest of his/her individual clients. The Supervising Broker is a Dual Representative of both the Buyer and Seller, and must not disclose information obtained in confidence to other parties in the transaction.

Notes on Designation:

  • If the Seller or Landlord does not consent to Designated Representation, the property may not be shown by any licensees affiliated with the brokerage firm that have entered into a representation agreement with a prospective Buyer or Tenant.
  • If the Buyer does not consent to Designated Agency, the Buyer may not be shown any properties listed by other licensees affiliated with the brokerage firm. Prior to entering into a contract in which the buyer and seller are represented by Designated Representatives, the relationship of both Designated Agents must be disclosed/confirmed in writing.

TOPICS TO DISCUSS

In addition to aforementioned terms of the agency agreement, you’ll want to ask:

  • How commission will be paid. In the aftermath of national class-action lawsuits brought against the NAR, brokerages and Multiple Listing Services, commission practices are changing. As of mid-July 2024, there will be specific revisions to the way commissions are paid.  Commissions and many existing terms of listing and agency agreements remain negotiable. Follow our link below to learn about upcoming commission changes
  • Discuss types of representation desired, the pros and cons of each type
  • Define the length (term) of your agreement
  • Discuss locations of interest. Agents do not necessarily hold licenses throughout the DCMA. Know where agents are licensed and determine if this meets your needs
  • Discuss fees like brokerage-imposed “admin” and “additional commission” charges. Ask your agent to explain these provisions and their implications for your transaction.

NOITCE

Commission payment practices are changing in mid-July 2024. Read our Commissions page, latest blog post, and learn why a good buyer agent matters.

CHOOSING A BUYER'S AGENT IN DC

It’s not just that some DC real estate agents are more talented, skilled, experienced and  knowledgeable than others (they are), their motivation and dedication, availability, work ethic and specialization will have a significant impact on your transaction. Review:
 

  • Communication:
    Will the agent return your communications in a timely manner? Are they explaining strategies and market circumstances, or simply dictating the process? Will the agent strategize with you to better ensure that you reach your goals? Educate you on the process? Buyers and sellers have different needs, but your agent should do more than function as a human key and paperwork facilitator. Find a proactive partner like us!
  • Honesty:
    Will the agent share hard truths, or play into unrealistic expectations instead? Working with an agent who helps you set realistic expectations and achievable goals will make your transaction less frustrating and more successful;
  • Volume:
    Is the agent’s transaction volume their primary calling card? Buyers should know that while volume history can be a measure of experience, it is not a measure of quality or skill. It is not even assured that volume quoted even reflects transactions with participation by that agent! Ask us to explain how this works and how volume representation is often skewed for promotion and marketing purposes. We don’t promote ourselves based on volume for that very reason;
  • Brokerage:
    What type of brokerage is the agent affiliated with? Is the agent a full-time, full-service single agent or affiliated with a full service team? If your agent is part of a team, will you work them or be handed off to a newbie and/or assistant?
  • Website:
    Does the agent have a website? If so, what’s included? Is it local? A cookie-cutter standard brokerage-issue site? Informational or generic? Does it provide value to you, or is it primarily designed to generating leads for the agent? Website content can tell you a lot about the agent’s focus and expertise;
  • Social Media:
    Does the agent interact on social media? Check out their posts, comments, and videos to see what kind of information they provide and get a sense of their focus;
  • Reviews:
    What are others saying about the agent? No one can be expected to have perfect reviews from every client and some people troll businesses, but an agent with few or no reviews really leaves you guessing;
  • Is the agent a “ghost?”
    It’s almost impossible these days not to have some mention on Internet search engines if you’re active in the real estate business–so if the agent you’re considering is not showing up, you may wonder if they have the experience and reach necessary for your transaction.

AGENTS AND DC NEW CONSTRUCTION

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THE ISAACS TEAM

Compass
1313 14th St
NW DC 20005

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