DC REAL ESTATE AGENCY AND AGREEMENTS
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. Be sure to reach out when you're ready to get started!
DC REAL ESTATE 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 IN DC LISTING AGREEMENTS
- Jurisdiction
- Type of agreement
- Length of agreement
- Listing price
- Commission percentage, fees and provisions
- Marketed publicly on MLS?
- Marketed off-market (on brokerage Private Exclusive channel)?
- Pocket Listing?
- 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
- Additional Terms written in
QUESTIONS TO ASK
In addition to reviewing each section of the Agreement with your agent, you’ll want to ask:
- What are commission fees, when and how are they paid? Are there any additional fees, such as a brokerage "admin" fee? Is there an early termination fee in the agreement?
- How will the listing price be determined? What type of price flexibility can the seller anticipate? Will the agent assist the owner in creating a net sheet? *A net sheet is calculated by subtracting any encumbrances on the property (outstanding mortgage being the most common), closing costs and miscellaneous fees from the home sale price. These are broad estimates until an ALTA statement is issued, because some numbers are unavailable at the onset of a listing, and many must be calculated based on the final sales price instead of the listing price.
- Will the listing include any Selling agent or Buyer bonuses and/or incentives?
- Discuss listing termination/expiration
- Discuss showing restrictions
- 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. KVS Title and many others 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 docs". This package may be generated electronically or as a printed set. 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. If you’re renovating, discuss scope and permitting with the agent, as well as board requirements pertaining to condos and coops and who will be supervising the renovation.
- Who pays costs of photography, floor plans, virtual and/or physical staging, marketing & advertising?
- If staging,, which company is suggested, what style and color scheme are suggested, what is the timeline for staging and removal?
- Discuss open houses. How often will they be held and what results are expected?
- How will offers be handled?
- For Private Exclusive listings, how will the property be marketed within the allowed PX channel, for how long, and will the listing be moved on-market after a specified period of time?
DC REAL ESTATE BUYER AGENCY AGREEMENTS AND TERMS | BUYERS
What is buyer agency?
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 Buyers 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 exemplary communication and disclosure, overlapping neighborhood boundaries can become an issue, and scheduling showings/tours can become a logistical nightmare, 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 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
- Dual Agency: "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
- 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 or Tenant does not consent to Designated Agency, the Buyer or Tenant 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.
PLAN TO DISCUSS
In addition to standard terms of the agency agreement, you’ll want to ask DC real estate agents about how FSBO properties will be handled, how discrepancies in commission will be handled, types of representation, term of agreement, locations and ancillary fees like “admin” and “additional commission” charges. Ask your agent to explain these provisions and their implications for your transaction.
IMPORTANT FACTORS IN SELECTING YOUR DC REAL ESTATE AGENT | BUYERS AND SELLERS
It’s not just that some DC real estate agents are more talented, skilled, experienced or knowledgeable than others–motivation and dedication, availability, work ethic and specialization impact your transaction, too.
- 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 relay you hard truths or play into unrealistic expectations? Working with an agent who helps you set realistic expectations and achievable goals will make your transaction less frustrating and more successful
- 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 or assistant?
- Website: Does the agent have a website? If so, what’s included? Is it local? Informational or generic? Does it provide value to you, or is it a cookie-cutter template primarily focused on the agent, and generating leads? That can tell you a lot about how your transaction will go.
- 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 who they are;
- 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 zero 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.
- Is the agent a Realtor? The designation of “Realtor” is an important one, used by real estate agents who are members of the National Association of Realtors. Realtors must subscribe to the NAR’s Code of Ethics, which offers added protection and quality of service for the client.
DC Real Estate Agents And New Construction
One of our specialties! Read our pages on Buying New Construction, New Home Sales Reps Won’t Tell You and Flips And Renovations. But the first thing to know is that the smiling face at the developer’s sales center belongs to a licensed real estate agent who represents that developer. It may seem like a good idea to go first to the source if you’re considering the purchase of new construction—but you can cost yourself advantages that a Realtor expert in development can provide, without gaining any benefits. ALWAYS let your agent do the contacting and never tour until they have.
