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CAUTIONOMB Approval No: 2502-0538(exp. 07/31/2009)U.S. Department of Housingand Urban DevelopmentFederal Housing Administration (FHA)For Your Protection:Why a Buyer Needs a Home InspectionA home inspection gives the buyer more detailed information about the overall condition of the home priorto purchase. In a home inspection, a qualified inspector takes an in-depth, unbiased look at your potentialnew home to:a Evaluate the physical condition: structure, construction, and mechanical systems;a Identify items that need to be repaired or replaced; anda Estimate the remaining useful life of the major systems, equipment, structure, and finishes.Appraisals are Different from Home InspectionsAn appraisal is different from a home inspection. Appraisals are for lenders; home inspections are for buyers.An appraisal is required to:a Estimate the market value of a house;a Make sure that the house meets FHA minimum property standards/requirements; anda Make sure that the property is marketable.FHA Does Not Guarantee the Value or Condition of your Potential New HomeIf you find problems with your new home after closing, FHA can not give or lend you money for repairs,and FHA can not buy the home back from you. That is why it is so important for you, the buyer, to getan independent home inspection. Ask a qualified home inspector to inspect your potential new homeand give you the information you need to make a wise decision.Radon Gas TestingThe United States Environmental Protection Agency and the Surgeon General of the United States haverecommended that all houses should be tested for radon. For more information on radon testing, call thetoll-free National Radon Information Line at 1-800-SOS-Radon or 1-800-767-7236. As with a home inspection,if you decide to test for radon, you may do so before signing your contract, or you may do so after signing thecontract as long as your contract states the sale of the home depends on your satisfaction with the results ofthe radon test.Be an Informed BuyerIt is your responsibility to be an informed buyer. Be sure that what you buy is satisfactory in every respect. Youhave the right to carefully examine your potential new home with a qualified home inspector. You mayarrange to do so before signing your contract, or may do so after signing the contract as long as your contractstates that the sale of the home depends on the inspection.HUD-92564-CN (6/06)CAUTIONCAUTIONCAUTIONGet a Home Inspection

Home Inspectors We KnowDarrol SchefferHOME INSPECTIONSPO Box 245Friday Harbor, WA 98250Work: 360-378-3274Work: 360-378-4969Cell: 360-622-7031Email : dscheffer@rockisland.com Tim HanceAll Islands Home InspectionsOrcas phone: 360-376-5555Cell phone: 360-298-1163Web Site:http://www.allislandsinspections.comSend E-Mail To:tim@allislandsinspections.com Jonathan QuigleySan Juan Islands Home InspectionsFriday Harbor, juanislandshomeinspection.com Rick BunzelPacific Crest Home InspectionsAnacortes,WA360-588-9956866-618-7764Lic pections.com/

THE LAW OF REAL ESTATE AGENCYThis pamphlet describes your legal rights in dealing with areal estate firm or broker. Please read it carefullybefore signing any documents.The following is only a brief summary of the attached law.SEC. 1.Definitions. Defines the specific terms used in the law.SEC. 2.Relationships between Brokers and the Public. Prescribes that a broker who works with abuyer or tenant represents that buyer or tenant — unless the broker is the listing agent, a seller’ssubagent, a dual agent, the seller personally or the parties agree otherwise. Also prescribes thatin a transaction involving two different brokers licensed to the same real estate firm, the firm’sdesignated broker and any managing broker responsible for the supervision of both brokers,are dual agents and each broker solely represents his or her client — unless the parties agree inwriting that both brokers are dual agents.SEC. 3.Duties of a Broker Generally. Prescribes the duties that are owed by all brokers, regardlessof who the broker represents. Requires disclosure of the broker’s agency relationship in a specifictransaction.SEC. 4.Duties of a Seller’s Agent. Prescribes the additional duties of a broker representing the selleror landlord only.SEC. 5.Duties of a Buyer’s Agent. Prescribes the additional duties of a broker representing thebuyer or tenant only.SEC. 6.Duties of a Dual Agent. Prescribes the additional duties of a broker representing both partiesin the same transaction, and requires the written consent of both parties to the broker acting asa dual agent.SEC. 7.Duration of Agency Relationship. Describes when an agency relationship begins and ends.Provides that the duties of accounting and confidentiality continue after the termination of anagency relationship.SEC. 8.Compensation. Allows real estate firms to share compensation with cooperating real estatefirms. States that payment of compensation does not necessarily establish an agency relationship.Allows brokers to receive compensation from more than one party in a transaction with theparties’ consent.SEC. 9.Vicarious Liability. Eliminates the liability of a party for the conduct of the party’s agent orsubagent, unless the principal participated in or benefited from the conduct or the agent orsubagent is insolvent. Also limits the liability of a broker for the conduct of a subagent.SEC. 10. Imputed Knowledge and Notice. Eliminates the common law rule that notice to or knowledgeof an agent constitutes notice to or knowledge of the principal.SEC. 11. Interpretation. This law establishes statutory duties which replace common law fiduciary dutiesowed by an agent to a principal.SEC. 12. Short Sale. Prescribes an additional duty of a firm representing the seller of owner-occupiedreal property in a short sale.

SECTION 1:(e) The principal personally would not beobligated to disclose to the other party.DEFINITIONS.(8) “Dual agent” means a broker who has enteredinto an agency relationship with both the buyer andseller in the same transaction.Unless the context clearly requires otherwise, thedefinitions in this section apply throughout this chapter.(1) “Agency relationship” means the agencyrelationship created under this chapter or by writtenagreement between a real estate firm and a buyerand/or seller relating to the performance of realestate brokerage services.(9) “Material fact” means information thatsubstantially adversely affects the value of theproperty or a party’s ability to perform its obligationsin a real estate transaction, or operates to materiallyimpair or defeat the purpose of the transaction.The fact or suspicion that the property, or anyneighboring property, is or was the site of a murder,suicide or other death, rape or other sex crime,assault or other violent crime, robbery or burglary,illegal drug activity, gang-related activity, politicalor religious activity, or other act, occurrence, or usenot adversely affecting the physical condition of ortitle to the property is not a material fact.(2) “Agent” means a broker who has entered intoan agency relationship with a buyer or seller.(3) “Broker” means broker, managing broker, anddesignated broker, collectively, as defined in chapter18.85 RCW, unless the context requires the terms tobe considered separately.(4) “Business opportunity” means and includes abusiness, business opportunity, and goodwill ofan existing business, or any one or combinationthereof when the transaction or business includesan interest in real property.(10) “Owner-occupied real property” means realproperty consisting solely of a single-familyresidence, a residential condominium unit, or aresidential cooperative unit that is the principalresidence of the borrower.(5) “Buyer” means an actual or prospectivepurchaser in a real estate transaction, or an actualor prospective tenant in a real estate rental or leasetransaction, as applicable.(11) “Principal” means a buyer or a seller who hasentered into an agency relationship with a broker.(12) “Real estate brokerage services” means therendering of services for which a real estate licenseis required under chapter 18.85 RCW.(6) “Buyer’s agent” means a broker who has enteredinto an agency relationship with only the buyer ina real estate transaction, and includes sub-agentsengaged by a buyer’s agent.(13) “Real estate firm” or “firm” have the samemeaning as defined in chapter 18.85 RCW.(7) “Confidential information” means information fromor concerning a principal of a broker that:(14) “Real estate transaction” or “transaction” meansan actual or prospective transaction involving apurchase, sale, option, or exchange of any interest inreal property or a business opportunity, or a lease orrental of real property. For purposes of this chapter, aprospective transaction does not exist until a writtenoffer has been signed by at least one of the parties.(a) Was acquired by the broker during the courseof an agency relationship with the principal;(b) The principal reasonably expects to be keptconfidential;(15) “Seller” means an actual or prospective seller in a realestate transaction, or an actual or prospective landlordin a real estate rental or lease transaction, as applicable.(c) The principal has not disclosed or authorizedto be disclosed to third parties;(d) Would, if disclosed, operate to the detrimentof the principal; and(16) “Seller’s agent” means a broker who has enteredPAGE 2

into an agency relationship with only the seller ina real estate transaction, and includes subagentsengaged by a seller’s agent.shall solely represent the party with whom thebroker has an agency relationship, unless all partiesagree in writing that the broker is a dual agent.(17) “Subagent” means a broker who is engaged toact on behalf of a principal by the principal’s agentwhere the principal has authorized the broker inwriting to appoint subagents.(3) A broker may work with a party in separatetransactions pursuant to different relationships,including, but not limited to, representing a partyin one transaction and at the same time notrepresenting that party in a different transactioninvolving that party, if the broker complies with thischapter in establishing the relationships for eachtransaction.SECTION 2:RELATIONSHIPS BETWEEN BROKERSAND THE PUBLIC.SECTION 3:(1) A broker who performs real estate brokerageservices for a buyer is a buyer’s agent unless the:DUTIES OF A BROKER GENERALLY.(a) Broker’s firm has appointed the broker torepresent the seller pursuant to a written agencyagreement between the firm and the seller, inwhich case the broker is a seller’s agent;(1) Regardless of whether a broker is an agent,the broker owes to all parties to whom the brokerrenders real estate brokerage services the followingduties, which may not be waived:(b) Broker has entered into a subagencyagreement with the seller’s agent’s firm, inwhich case the broker is a seller’s agent;(a) To exercise reasonable skill and care;(c) Broker’s firm has appointed the broker torepresent the seller pursuant to a written agencyagreement between the firm and the seller,and the broker’s firm has appointed the brokerto represent the buyer pursuant to a writtenagency agreement between the firm and thebuyer, in which case the broker is a dual agent;(c) To present all written offers, written notices andother written communications to and from eitherparty in a timely manner, regardless of whetherthe property is subject to an existing contract forsale or the buyer is already a party to an existingcontract to purchase;(b) To deal honestly and in good faith;(d) To disclose all existing material facts knownby the broker and not apparent or readilyascertainable to a party; provided that thissubsection shall not be construed to imply anyduty to investigate matters that the broker hasnot agreed to investigate;(d) Broker is the seller or one of the sellers; or(e) Parties agree otherwise in writing after thebroker has complied with RCW 18.86.030(1)(f).(2) In a transaction in which different brokersaffiliated with the same firm represent differentparties, the firm’s designated broker and anymanaging broker responsible for the supervision ofboth brokers, is a dual agent, and must obtain thewritten consent of both parties as required underRCW 18.86.060. In such case, each of the brokers(e) To account in a timely manner for all moneyand property received from or on behalf ofeither party;(f) To provide a pamphlet on the law of realestate agency in the form prescribed inPAGE 3

RCW 18.86.120 to all parties to whom the brokerrenders real estate brokerage services, beforethe party signs an agency agreement with thebroker, signs an offer in a real estate transactionhandled by the broker, consents to dual agency,or waives any rights, under RCW 18.86.020(1)(e),18.86.040(1)(e), 18.86.050(1)(e), or 18.86.060(2)(e)or (f), whichever occurs earliest; and(c) To advise the seller to seek expert adviceon matters relating to the transaction that arebeyond the agent’s expertise;(g) To disclose in writing to all parties to whomthe broker renders real estate brokerage services,before the party signs an offer in a real estatetransaction handled by the broker, whetherthe broker represents the buyer, the seller, bothparties, or neither party. The disclosure shall beset forth in a separate paragraph entitled “AgencyDisclosure” in the agreement between the buyerand seller or in a separate writing entitled “AgencyDisclosure.”(e) Unless otherwise agreed to in writingafter the seller’s agent has complied withRCW 18.86.030(1)(f), to make a good faithand continuous effort to find a buyer for theproperty; except that a seller’s agent is notobligated to seek additional offers to purchasethe property while the property is subject to anexisting contract for sale.(d) Not to disclose any confidential informationfrom or about the seller, except under subpoenaor court order, even after termination of theagency relationship; and(2) (a) The showing of properties not owned bythe seller to prospective buyers or the listingof competing properties for sale by a seller’sagent does not in and of itself breach the dutyof loyalty to the seller or create a conflict ofinterest.(2) Unless otherwise agreed, a broker owes noduty to conduct an independent inspection of theproperty or to conduct an independent investigationof either party’s financial condition, and owesno duty to independently verify the accuracy orcompleteness of any statement made by eitherparty or by any source reasonably believed by thebroker to be reliable.(b) The representation of more than one sellerby different brokers affiliated with the same firmin competing transactions involving the samebuyer does not in and of itself breach the dutyof loyalty to the sellers or create a conflict ofinterest.SECTION 4:DUTIES OF A SELLER’S AGENT.SECTION 5:(1) Unless additional duties are agreed to in writingsigned by a seller’s agent, the duties of a seller’sagent are limited to those set forth in RCW 18.86.030and the following, which may not be waived exceptas expressly set forth in (e) of this subsection:DUTIES OF A BUYER’S AGENT.(1) Unless additional duties are agreed to in writingsigned by a buyer’s agent, the duties of a buyer’sagent are limited to those set forth in RCW 18.86.030and the following, which may not be waived exceptas expressly set forth in (e) of this subsection:(a) To be loyal to the seller by taking no actionthat is adverse or detrimental to the seller’sinterest in a transaction;(a) To be loyal to the buyer by taking no actionthat is adverse or detrimental to the buyer’sinterest in a transaction;(b) To timely disclose to the seller any conflictsof interest;PAGE 4

(b) To timely disclose to the buyer any conflictsof interest;RCW 18.86.030(1)(f), which consent must include astatement of the terms of compensation.(c) To advise the buyer to seek expert adviceon matters relating to the transaction that arebeyond the agent’s expertise;(2) Unless additional duties are agreed to in writingsigned by a dual agent, the duties of a dual agentare limited to those set forth in RCW 18.86.030 andthe following, which may not be waived except asexpressly set forth in (e) and (f) of this subsection:(d) Not to disclose any confidential informationfrom or about the buyer, except under subpoenaor court order, even after termination of theagency relationship; and(a) To take no action that is adverse or detrimentalto either party’s interest in a transaction;(e) Unless otherwise agreed to in writingafter the buyer’s agent has complied withRCW 18.86.030(1)(f), to make a good faith andcontinuous effort to find a property for the buyer;except that a buyer’s agent is not obligated to:(b) To timely disclose to both parties anyconflicts of interest;(c) To advise both parties to seek expert adviceon matters relating to the transaction that arebeyond the dual agent’s expertise;(i) seek additional properties to purchase whilethe buyer is a party to an existing contract topurchase; or(d) Not to disclose any confidentialinformation from or about either party, exceptunder subpoena or court order, even aftertermination of the agency relationship;(ii) show properties as to which there is nowritten agreement to pay compensation tothe buyer’s agent.(e) Unless otherwise agreed to in writing after thedual agent has complied with RCW 18.86.030(1)(f),to make a good faith and continuous effort tofind a buyer for the property; except that a dualagent is not obligated to seek additional offersto purchase the property while the property issubject to an existing contract for sale; and(2) ( a ) The showing of property in which a buyer isinterested to other prospective buyers by abuyer’s agent does not in and of itself breachthe duty of loyalty to the buyer or create aconflict of interest.(b) The representation of more than one buyerby different brokers affiliated with the same firmin competing transactions involving the sameproperty does not in and of itself breach theduty of loyalty to the buyer or create a conflictof interest.(f) Unless otherwise agreed to in writing after thedual agent has complied with RCW 18.86.030(1)(f),to make a good faith and continuous effort tofind a property for the buyer; except that a dualagent is not obligated to:(i) seek additional properties to purchase whilethe buyer is a party to an existing contract topurchase; or(ii) show properties as to which there is nowritten agreement to pay compensation tothe dual agent.SECTION 6:DUTIES OF A DUAL AGENT.(3) (a) The showing of proper ties not ownedby the seller to prospective buyers or the listingof competing properties for sale by a dual agentdoes not in and of itself constitute action that is(1) Notwithstanding any other provision of thischapter, a broker may act as a dua

For more information on radon testing, call the toll-free National Radon Information Line at 1-800-SOS-Radon or 1-800-767-7236. As with a home inspection, if you decide to test for radon, you may do so before signing your contract, or you may do so after signing the contract as long as your contract states the sale of the home depends on your .