Do I Have To Use A Realtor/Real Estate Agent To Buy Or Sell?

Andrew M. McKenzie, Edmonds Lawyer

Real estate sales usually involve professional realtors who earn commissions when a sale closes.  But buyers and sellers have no obligation to use a realtor.  Generally speaking, parties to a real estate transaction have three options: (1) realtor representation; (2) self-representation; and (3) lawyer representation.  You should give consideration to all three options before deciding what is best for you.  In many cases, hiring an experienced real estate lawyer is your best option, and can both save money and reduce risk.

Realtor/Real Estate Agent Representation

“Realtor” is an industry term that generally refers to a licensed real estate agent (typically a member of the National Association of Realtors).  Licensed real estate agents, depending upon their level of experience, can possess a wealth of localized real estate knowledge.  Familiarity with local markets and personal connections with other local agents can benefit clients both with: (a) the ability to predict, and advise clients on, the strength of offers; and (b) credibility and insider knowledge when it comes to negotiating with other agents.  Real estate agents and brokerages who subscribe to the local multiple listing service (“MLS”) tend to have an advantage in both marketing property for sale and in gathering less visible data.  Properties listed on the local MLS often have confidential remarks made by the listing agent which are only easily visible to other licensed agents who subscribe to the service.  The MLS also typically compiles local market data and makes it available to licensed agents who are members of the MLS.  Agents often spend significant time with clients showing properties and researching potential properties for purchase.  Many buyers find it useful to have a buyer’s agent assist them in finding potential properties, and in accompanying the buyers to multiple showings before the buyers decide to make an offer.  But there is also a significant percentage of buyers who feel comfortable searching for properties on their own and only end up having a buyer agent because of their familiarity with the relevant forms and the transaction process.

However, real estate agents who are not lawyers also possess inherent limitations.  First and foremost, they are prohibited from practicing law in the traditional sense.  This means they can neither provide legal advice nor draft legal documents (other than filling out official pre-existing forms).  This can greatly restrict what the agent can do; for example, in Washington, standard Form 34 from the Northwest MLS is a catch-all blank form for special terms in a transaction.  Anything beyond the most basic of terms on this form should be drafted by a lawyer, rather than a real estate agent.  Real estate agents are supposed to refer their clients to competent third party professionals whenever there is an issue requiring analysis outside the ordinary expertise of an agent. 

Real estate agents and brokers almost always work on commission.  Prevailing industry norms provide that about 6% commission is paid on real estate transactions in the United States.  The seller has traditionally paid this cost, and the commission is often split 50/50 between the seller’s agent (referred to as the listing agent or listing broker) and the buyer’s agent (confusingly referred to sometimes as the “selling agent”).  While commissions are technically negotiable, this “industry standard” of 6% has been around for a very long time, and it is often difficult to negotiate commissions significantly below 6% (5% total commission has become increasingly common).  A recent antitrust case out of Missouri resulted in a $1.8 billion jury verdict against the National Association of Realtors, based upon an alleged conspiracy to artificially keep commissions high.  Changes are underway in some jurisdictions to make the commission negotiation process more transparent and less rigid for both buyers and sellers.  But it may be some time before we notice any significant reduction in the total commissions actually being paid on real estate sales.  Suffice it to say that the typical commission structure for agents tends to take a significant bite out of the available dollars in a transaction.  The practical effect is that the seller must raise the sale price (at the buyer’s expense) to pay these significant transaction costs.


Representing yourself in a real estate transaction is a risky proposition.  If you are not experienced with real estate transactions or trained to identify and investigate certain issues, there is a high likelihood that you will make mistakes which cannot be undone later.  Sellers trying to represent themselves may fail to understand their disclosure obligations, and may further fail to understand their post-sale obligations to defend the buyer’s title to the property (depending on the form of deed used to convey title at closing).  Buyers trying to represent themselves may not know how to properly perform due diligence, such as finding comparative market data, performing physical inspections, understanding title reports or recorded title documents, or understanding their rights and obligations under the contract and relevant statutes.  And both buyers and sellers may lack the skills to negotiate effectively with the other side.  I would not recommend self-representation unless you are an unusually sophisticated buyer or seller.

Lawyer Representation

Licensed real estate lawyers in Washington have the ability to represent buyers and sellers even without being licensed as a real estate agent or broker.  A competent lawyer can provide legal advice to the client and draft contract documents beyond just standard forms.  The lawyer can be involved in everything from drafting the contract to analyzing and providing advice regarding a title report.  Competent real estate lawyers can provide critical input on contract interpretation, helping the client avoid or navigate through actual or potential disputes during and after the transaction.  If a dispute arises, the lawyer can represent the client and offer representation that is both credible and authoritative, supported by relevant facts, applicable statutes, and controlling case law. 

The compensation structure for lawyers representing and advising clients in real estate transaction is usually different than that of agents/brokers.  The lawyer is likely to charge an hourly rate or a much smaller percentage of the sale price than what agents typically receive.  Particularly in sizeable transactions, there can be a huge cost savings by using a lawyer instead of a real estate agent.  For sellers, this is most advantageous in situations when the seller has already found a likely buyer before the property is ever listed on the MLS.  For buyers, hiring a lawyer gives the buyer leverage to negotiate a reduction in the purchase price (which the seller can justify by knowing that the seller will not have to pay compensation to a buyer’s agent).

All things considered, buyers and sellers who take the time to read this post will realize that it may make the most sense to hire a real estate lawyer for their transaction.  The lawyers at Beresford Booth have been helping buyers and sellers in real estate transactions for decades.  We would love to help you save transactional costs in your purchase or sale, while mitigating your risks.

To Learn More about Do I Have To Use A Realtor/Real Estate Agent To Buy Or Sell?, please do not hesitate to contact us at or by phone (425) 776-4100 for assistance.

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