Washington Real Estate Study Guide 2026 — Free Cheat Sheet

A branch manager is a natural person who holds a managing broker's license and has been given delegated authority by the designated broker to manage a single physical location of a branch office. The department issues a specific endorsement for branch managers.

• ✓A branch manager must hold a managing broker's license
• ✓Authority to manage a branch is delegated by the designated broker
• ✓A branch manager manages only a single physical branch location
• ✓The department issues a 'branch manager' endorsement

A branch office is a separate physical office of the real estate firm that has a different mailing address than the main firm office and uses the real estate firm's UBI (unified business identifier) number. All three conditions must be met.

• ✓Must be a separate physical office of the real estate firm
• ✓Must have a different mailing address than the main firm office
• ✓Must use the real estate firm's UBI (unified business identifier) number
• ✓All three criteria must be satisfied to qualify as a branch office

Affiliated licensees are natural persons licensed as brokers or managing brokers who are employed by a firm and are licensed to represent that firm in performing any of the acts specified in chapter 18.85 RCW.

• ✓Affiliated licensees must be brokers or managing brokers
• ✓They must be employed by a firm
• ✓They are licensed to represent the firm in acts specified under chapter 18.85 RCW

Brokerage service contracts include, but are not limited to, purchase and sale agreements, lease or rental agreements, listings, options, agency agreements, and property management agreements. This is a non-exhaustive list.

• ✓Includes purchase and sale agreements, leases/rental agreements, and listings
• ✓Includes options, agency agreements, and property management agreements
• ✓The list is illustrative and not exhaustive ('include, but are not limited to')

Words and terms used in this chapter carry the same meaning as under chapter 18.85 RCW unless the chapter clearly provides otherwise or the context clearly indicates a different meaning.

• ✓Terms default to their meaning under chapter 18.85 RCW
• ✓A different meaning applies only if the chapter clearly provides one or the context clearly requires it

All checks received in connection with real estate transactions—including earnest money, security or damage deposits, rent, lease payments, and contract or mortgage payments on real property or business opportunities owned by clients—must be made payable to the real estate firm as licensed. The only exception is when the principals mutually agree in writing that the deposit be paid to the seller or a named escrow agent, and the firm must retain a copy of that written agreement.

• ✓Checks for earnest money, deposits, rent, lease, contract or mortgage payments must be payable to the real estate firm as licensed
• ✓A written mutual agreement by the principals may direct payment to the seller or a named escrow agent instead
• ✓The firm must retain a copy of the written agreement

Real estate firms must keep individual broker and managing broker licenses available at the address on the license, and must publicly display all firm and branch office licenses. This ensures the public and regulators can verify licensure at the place of business.

• ✓Licenses of real estate brokers and managing brokers must be available at the address appearing on the individual license
• ✓All firm and branch office licenses must be displayed in an area visible to the public

The director regulates real estate brokerage for consumer safety because real estate transactions are often the largest financial transactions in a consumer's lifetime. A real estate license is a privilege granted by the state, conditioned on meeting licensing requirements, maintaining records, and complying with all laws—including cooperating with audits and investigations. The director uses two primary enforcement methods: audits and investigations.

• ✓A real estate license is a privilege, not a right, granted to those who meet requirements, maintain records, and comply with all governing laws
• ✓Cooperation with an audit/investigation of brokerage activities is a condition of licensure
• ✓The two primary enforcement methods are audits and investigations
• ✓The standard of practice for licensees is that of an attorney when completing real estate brokerage transaction documents for consumers

The chapter defines core roles. A 'designated broker' is a natural person who owns a sole proprietorship firm, or a person with a controlling interest designated by a business entity to act for the firm, whose managing broker license carries a 'designated broker' endorsement. A 'managing broker' acts on behalf of a firm under the designated broker's supervision and may supervise other brokers. A 'licensee' is anyone holding a firm, managing broker, or broker license. 'Controlling interest' means the ability to control operational or financial decisions of a firm.

• ✓A designated broker must be a natural person who either owns a sole proprietorship or has a controlling interest and is designated by the business entity
• ✓A managing broker works under the designated broker's supervision and may supervise other brokers/managing brokers
• ✓A 'licensee' includes real estate firms, managing brokers, and brokers
• ✓'Commission' means the real estate commission of Washington; 'Department' means the Department of Licensing; 'Director' means the director of the Department of Licensing

'Real estate brokerage services' covers services offered directly or indirectly to another for compensation (or by a licensee on their own behalf), including: listing, selling, purchasing, exchanging, optioning, leasing, or renting real estate; negotiating such transactions; advertising or holding oneself out as engaged in brokerage; advising/counseling buyers, sellers, landlords, or tenants; issuing a broker's price opinion (BPO); collecting/holding/disbursing transaction funds; and performing property management services (marketing, leasing, renting, maintenance, or supervision thereof).

• ✓A broker's price opinion (BPO) is an oral or written report of property value prepared by a licensee and is NOT an appraisal unless it complies with chapter 18.140 RCW
• ✓Brokerage services include property management such as marketing, leasing, renting, and physical/administrative/financial maintenance
• ✓Compensation, or the promise/expectation of compensation, triggers the brokerage services definition

An 'inactive license' is a license that is not expired but is not affiliated with a firm; the holder may not conduct real estate brokerage services. An 'independent contractor relationship' exists when no written agreement makes the broker an employee AND substantially all compensation is for real estate brokerage services provided by the firm. This status does not relieve the managing broker or firm of supervisory duties.

• ✓An inactive license is not expired but is not affiliated with a firm
• ✓Independent contractor status does not relieve the firm/managing broker of supervisory duties
• ✓Independent contractor requires no employee written agreement plus substantially all compensation being for real estate services

A 'real estate firm' or 'firm' means a sole proprietorship, partnership, LLP, corporation, LLC, or other legally recognized business entity conducting real estate brokerage services in Washington and licensed by the department as a real estate firm.

• ✓A firm must be licensed by the department as a real estate firm to conduct brokerage services
• ✓A firm may be organized as a sole proprietorship, partnership, LLP, corporation, LLC, or other legal entity

The real estate commission consists of the director (who chairs it) plus six members serving in an advisory capacity to the director. The governor appoints the six members for six-year terms. At least two members must come from west of the Cascades and at least two from east of the Cascades. Members need at least five years' experience in brokerage services or at least three years in similar investigative work. The commission meets four times a year or at the director's call.

• ✓The commission has the director as chair plus six governor-appointed advisory members serving six-year terms
• ✓At least two members must be from west of the Cascades and at least two from east of the Cascades
• ✓Members need 5 years' brokerage experience or 3 years' related investigative experience
• ✓The commission meets four times per year or at the call of the director

The director, with commission advice/approval, issues rules governing brokers, managing brokers, designated brokers, and firms. The director enforces licensing laws, grants/denies licenses, holds hearings, sets reciprocity standards, may require criminal background checks (applicant pays), adopts advertising standards, and runs a real estate education program including minimum continuing education levels. The director may discipline real estate schools/instructors with sanctions up to $1,000 per day per violation.

• ✓The director may require all applicants to submit to a criminal background check at the applicant's expense
• ✓The director sets standards for reciprocity/licensure of out-of-jurisdiction applicants including written recognition agreements
• ✓Fines against real estate schools may not exceed $1,000 per day per violation, each day being a separate violation

Real estate licensees or persons with a controlling interest in a real estate business may not give or receive kickbacks/fees to induce title insurance business where they have a financial interest, may not solicit or accept anything of value a title company is prohibited from giving, and may not require a consumer to obtain title insurance from a title agent in which the licensee has a financial interest as a condition of service. They also cannot bar delivery of appropriate title insurance promotional material meeting stated conditions.

• ✓Licensees may not give or accept kickbacks/things of value related to title insurance business where they have a financial interest
• ✓A licensee may not require a consumer to use a title agent in which the licensee has a financial interest as a condition of providing service

All fees under the chapter are set by the director per RCW 43.24.086, paid to the state treasurer, and placed in the real estate commission account. All money from fines is deposited in the real estate education program account (RCW 18.85.321).

• ✓License fees are set by the director and deposited into the real estate commission account
• ✓Money from fines goes to the real estate education program account

While employed with the department, the director and employees who regulate real estate must relinquish interest in any regulated real estate business; a licensee employed by the director has their license placed on inactive status until employment ends. Persons licensed under this chapter employed by a town, city, or county conducting transactions on behalf of that government may hold active licenses, and their designated/managing brokers are not responsible for those transactions.

• ✓A licensee employed by the director is placed on inactive status until the employment ends
• ✓City/county/town employee licensees conducting transactions for their government employer may hold active licenses, and their supervising brokers are not responsible for those transactions

To be licensed, a firm must designate a managing broker as the 'designated broker' with authority to act for the firm and provide owner/controlling-interest names, assure no controlling-interest person is subject to a final order suspending/revoking a license, and not adopt a name that is the same/similar to existing licenses or implies it is a nonprofit, research, public bureau, or group. The application requires the firm name, UBI number, business addresses, contact info, application fee, and other required information. Renewal requires the renewal fee and notice of any change in controlling interest or secretary of state registration.

• ✓A firm must designate a managing broker as 'designated broker' with authority to act for the firm
• ✓A firm cannot adopt a name the same/similar to existing licenses or implying nonprofit/research/public status
• ✓The firm must provide a unified business identifier (UBI) number and notify the department of controlling-interest changes at renewal

The designated broker must keep specific trust account records on behalf of the firm. These records document all money flowing through the firm's trust accounts and must be complete and organized to allow tracking of every transaction and property management account.

• ✓Must keep a duplicate receipt book or cash receipts journal recording all receipts
• ✓Must maintain sequentially numbered, nonduplicative checks with check register, cash disbursements journal or check stubs
• ✓Must keep validated duplicate bank deposit slips or daily verified bank deposits
• ✓Must maintain a client's accounting ledger summarizing all moneys received and disbursed for each transaction or property management/contract/mortgage collection account
• ✓Must keep separate ledger sheets for each tenant (including security deposit), lessee, vendee or mortgagor
• ✓Must retain reconciled bank statements and canceled checks for all trust bank accounts

Beyond trust account records, the designated broker must maintain transaction-related records including logs, copies of contracts, and complete transaction folders. All required records must be kept at a single licensed location.

• ✓Must keep an accurate, up-to-date log of all agreements or contracts for brokerage services submitted by affiliated licensees
• ✓A legible copy of the transaction or brokerage service contracts must be retained in each participating firm's files
• ✓Must maintain a transaction folder containing all agreements, receipts, contracts, documents, leases, closing statements, broker price opinions, referral agreements, and material correspondence for each transaction
• ✓All required records must be maintained at one location where the firm is licensed, which may be the main or any branch office

New applicants for their first broker's license, and applicants for their first managing broker's license using alternative qualifications, must submit to a fingerprint background check with the department's authorized vendor. Background checks are required for every active renewal every six years, but if a check was done within the last six years no new check is needed to activate a license. An application without the required check is incomplete.

• ✓First broker license applicants and alternative-qualification managing broker applicants must complete a fingerprint background check with the authorized vendor
• ✓Fingerprint background checks are required for every active renewal every six years
• ✓If a background check was completed within the last six years, no new check is required to activate a license
• ✓An application submitted without the required fingerprint check is considered incomplete

When fingerprints are rejected, the licensee or applicant must follow the vendor's resubmission procedures within 21 calendar days. Failure to do so results in suspension of the real estate license until the procedures are followed, and the licensee/applicant is responsible for any additional fees.

• ✓Rejected fingerprints must be resubmitted per vendor procedures within 21 calendar days
• ✓Failure to follow procedures within 21 days results in license suspension until compliance
• ✓The licensee or applicant is responsible for any additional fees due

Brokers and managing brokers must physically deliver all funds, moneys, negotiable instruments, or items of value to the appropriate managing broker, branch manager, or their designated broker within a set time limit. Delivery must occur within the shorter of two business days of the client's signature, or sooner if the contract terms require quicker delivery. Business days exclude Saturdays, Sundays, and legal holidays as defined in RCW 1.16.050.

• ✓Funds must be delivered within two business days of the client's/customer's signature
• ✓Delivery must be sooner if contract terms necessitate quicker delivery
• ✓Business days do not include Saturday, Sunday, or legal holidays per RCW 1.16.050
• ✓The 'shorter of' the two timeframes controls delivery deadline

The real estate licensee is responsible for negotiating the agreement between seller and purchaser. At closing, the licensee must furnish (or cause to be furnished) a complete detailed closing statement to each buyer and each seller in every real estate or business opportunity transaction where brokerage services are provided. The firm must retain a copy of all buyer and seller closing statements even when funds are not handled by a licensee and closing occurs elsewhere.

• ✓A complete detailed closing statement must be provided to each buyer and each seller at the time the transaction closes
• ✓The firm must retain copies of all closing statements even if closing is done elsewhere and funds are not handled by a licensee
• ✓Statements are required in every transaction where the licensee provides brokerage services

Net proceeds of sale on all real estate transactions closed by a licensee must be paid directly to the seller unless otherwise provided by written agreement. When more than one licensee is involved and funds are deposited by the purchaser before closing, the firm first receiving the funds retains custody and is accountable until the funds are distributed or delivered per written instructions signed by all parties.

• ✓Net proceeds must be paid directly to the seller unless a written agreement provides otherwise
• ✓The firm first receiving purchaser funds retains custody and accountability until distributed
• ✓Funds may only be distributed per written instructions signed by all parties to the transaction

Closing statements for all real estate or business opportunity transactions in which a firm participates must show the date of closing, the total purchase price, and an itemization of all adjustments, money, or things of value received or paid—identifying to whom each item is credited or debited. The dates of adjustments must be shown along with the names of the payees, makers, and assignees of all notes paid, made, or assumed.

• ✓Closing statement must show date of closing and total purchase price
• ✓Must itemize all adjustments, money, or things of value with credit/debit attribution
• ✓Must show dates of adjustments and names of payees, makers, and assignees of all notes

All licensees must keep the party to whom they provided brokerage services informed of the earnest money deposit status. Licensees must also retain and provide copies of receipts to the principals and participating firms.

• ✓Licensees must keep their client informed of the earnest money deposit status
• ✓Licensees must retain and provide copies of receipts to principals and participating firms

When a firm changes its office location, the designated broker must promptly notify the real estate program. This is done by submitting a completed change of address application, returning all licenses, submitting completed transfer applications, and paying the correct fees within the required timeframe.

• ✓The designated broker must submit the change within ten days
• ✓Must submit a completed change of address application, return all licenses, provide completed transfer applications, and pay the correct fees

Licensees must create and maintain records of their real estate brokerage activities for regulatory purposes. Records must be kept and made available to the director for three years from the conclusion of the related services or transaction. Licensees have no privacy interest in records they are required by statute or rule to maintain.

• ✓Records must be maintained and made available to the director for three years from the conclusion of the related services or transaction
• ✓Licensees have no privacy interest in records they are required by statute or rule to keep
• ✓Licensees must create and maintain records of their brokerage activities

All required real estate records must be accurate, current, and kept at the licensed office. Records must be retained and available for inspection for a minimum period. Closed transactions may be moved to a central Washington facility under certain conditions.

• ✓All required records must be accurate, posted and kept up to date
• ✓Records must be kept at an address where the firm is licensed to maintain a real estate office
• ✓Transactions closed for at least one year may be maintained at one central facility located in Washington
• ✓A listing of all transactions stored remotely must be maintained at the firm's licensed office and be readily retrievable upon department demand
• ✓All records must be retained and available for inspection by the director for a minimum of three years

Records may be stored electronically or on remote devices provided all documents can be immediately retrieved, viewed, and printed at the firm's licensed office. The designated broker must maintain functioning equipment and an indexed storage system.

• ✓Records may be stored electronically or on remote devices only if retrieval of all documents is immediate
• ✓Retrieval must be possible at the firm's licensed office and allow viewing and printing of all documents
• ✓Stored documents include listing agreements, price reductions/status changes, offers and counteroffers, electronic communications, negotiations, trust account records, and final disposition
• ✓The designated broker must maintain equipment in good repair and index document storage for immediate retrieval

A real estate broker who receives funds from any principal or party to a real estate/business opportunity transaction, property management agreement, contract/mortgage collection agreement, or advance fees must hold those funds in trust and may not use them for the benefit of the broker, managing broker, firm, or anyone not entitled. Designated brokers are responsible for ensuring affiliated licensees safeguard client funds. Funds must be deposited in a federally insured (FDIC or NCUA) bank, savings association, or credit union that can accept service in Washington state.

• ✓Trust funds may not be used for the benefit of the broker, firm, or unauthorized persons
• ✓Designated brokers are responsible for ensuring affiliated licensees safeguard client funds
• ✓Funds must be deposited in an FDIC- or NCUA-insured institution able to accept service in Washington state
• ✓Designated broker is responsible for depositing, holding, disbursing, receipting, posting, recording, accounting, notifying, and reconciling

All funds received pertaining to sale, renting, leasing, optioning of real estate/business opportunities, contract/mortgage collections, or advance fees must be deposited in the firm's real estate trust bank account no later than the next banking day following receipt, with exceptions. Cash must be deposited by the next banking day. Checks received as earnest money may be held when the earnest money agreement states the check is to be held for a specified time or until a specific event. Saturdays, Sundays, and legal holidays are not banking days.

• ✓Trust funds must be deposited no later than the next banking day following receipt
• ✓Cash must be deposited no later than the next banking day
• ✓Earnest money checks may be held if the agreement states the check is held for a specified time or until a specific event
• ✓Saturday, Sunday, and legal holidays (RCW 1.16.050) are not banking days

The reconciled trust bank account balance must at all times equal outstanding trust liability to clients plus the 'open account' ledger funds. The designated broker must prepare a monthly trial balance of the client's ledger, reconciling with both the trust bank statement and check register/bank control account. The checkbook balance, bank reconciliation, and client ledgers must always agree. A trial balance lists all client ledgers with owner name/control number, date of last entry, and ledger balance.

• ✓Reconciled trust account balance must always equal outstanding client liability plus open account ledger
• ✓Designated broker must prepare a monthly trial balance reconciling ledger, bank statement, and check register
• ✓Checkbook balance, bank reconciliation, and client ledgers must be in agreement at all times

No deposits of funds belonging to the broker or firm may be made to the trust account, except a minimal amount to open or keep the account from being closed; and no funds unrelated to a client's transaction may be deposited. No disbursements may be made for items not pertaining to a specific transaction, in excess of amounts held for that transaction, for commissions to persons licensed to the firm, for firm business expenses, or for bank charges (with limited exceptions). Commissions and business expenses must be paid from the firm's regular business bank account. Bank charges are firm overhead and must be charged to the business account.

• ✓Only minimal firm funds to open/maintain the account may be deposited
• ✓No trust disbursements for items not pertaining to a specific transaction
• ✓No disbursement in excess of the actual amount held for a transaction
• ✓Commissions to firm licensees and firm business expenses must be paid from the regular business account, not the trust account
• ✓Bank charges are firm overhead and generally may not be paid from the trust account

Bank accounts must be designated as trust accounts in the firm name or assumed name as licensed. Interest credited to a client's account must be recorded as a liability on the client ledger. Interest assigned to the firm by written agreement may not remain in the trust account; the designated broker must arrange for the financial institution to credit it to the firm's general account.

• ✓Bank accounts must be designated as trust accounts in the firm/assumed name as licensed
• ✓Interest credited to a client must be recorded as a liability on the client ledger
• ✓Interest assigned to the firm by written agreement may not be kept in the trust account

The designated broker must maintain a records system providing an audit trail of all funds received and disbursed, with all funds identified to each individual client. An individual client ledger sheet must be established for each client, showing all receipts and disbursements. Credit entries must show date, amount, and item covered (e.g., earnest money deposit, down payment, rent, damage deposit, interest, advance fee). Debit entries must show check date, check number, amount, payee, and item covered. An 'opening account' ledger is required for firm funds used to open or keep the account from being closed.

• ✓Records must provide an audit trail with all funds identified to each individual client
• ✓An individual client ledger must be established and maintained for each client
• ✓Credit entries must show date of deposit, amount, and item covered
• ✓Debit entries must show check date, number, amount, payee, and item covered
• ✓An 'opening account' ledger is required for minimal firm funds

All disbursements of trust funds must be made by check or electronic transfer drawn on the trust bank account and identified to a specific transaction or agreement. Check number, amount, date, payee, items covered, and the specific client's ledger debited must be shown, and no check numbers may be duplicated. No disbursement based on wire transfer receipts may be made until the deposit is verified. A follow-up hard-copy debit memo must be provided for wire-transfer disbursements, and signed owner instructions identifying the receiving entity/account must be retained in the transaction file.

• ✓All disbursements must be by check or electronic transfer drawn on the trust account and identified to a specific transaction
• ✓No check numbers on a single trust account may be duplicated
• ✓No disbursement based on wire transfer receipts until the deposit is verified
• ✓A follow-up hard-copy debit memo is required for wire-transfer disbursements
• ✓Signed owner wire instructions identifying receiving entity and account must be retained

Commissions owed to another firm may be paid from the real estate trust bank account and must be paid promptly upon receipt of funds. Commissions shared with another firm are treated as a reduction of the gross commissions received.

• ✓Commissions owed to another firm may be paid from the trust account and must be paid promptly
• ✓Commissions shared with another firm are a reduction of gross commissions received

Voided checks written on the trust account must be permanently defaced and retained. The rules apply to both manual and computerized accounting systems. Computerized systems must back up all data files, maintain registers/journals/reconciliations/trial balances available for immediate retrieval or printing on department demand, and the designated broker must keep a dated source document/index file to support changes to records.

• ✓Voided trust account checks must be permanently defaced and retained
• ✓Trust account rules apply to both manual and computerized systems
• ✓Computerized systems must back up all data and allow immediate retrieval on department demand

The director adopts RCW 34.05.482 through 34.05.494 to administer brief adjudicative proceedings. These proceedings are conducted by request and/or at the director's discretion under RCW 34.05.482 for the categories of matters set forth in WAC 308-09-525.

• ✓Brief adjudicative proceedings are governed by RCW 34.05.482 through 34.05.494
• ✓They may be conducted by request or at the director's discretion
• ✓Applicable categories of matters are set forth in WAC 308-09-525

A person desiring to take a broker or managing broker exam must contact the testing service at least one business day prior to the desired test date to schedule and pay, and only after receiving written notice that requirements have been met. Candidates who received clock hours in another jurisdiction must first submit proof of education to be substituted under WAC 308-124A-755.

• ✓Candidates must contact the testing service at least one business day prior to the desired test date to schedule and pay
• ✓Exam scheduling is only allowed after written notice that requirements have been met
• ✓Out-of-jurisdiction clock hours require proof of education submitted for substitution under WAC 308-124A-755

Every licensee must notify the real estate program within a set timeframe of certain criminal, civil, and professional licensing actions involving them. This applies regardless of any pending appeal.

• ✓Notification must be made within twenty days after service or knowledge
• ✓Must report any criminal complaint, information, indictment, or conviction (including guilty or nolo contendere pleas) naming the licensee as a defendant
• ✓Must report entry of a civil court order, verdict, or judgment against the licensee involving real estate or business-related activity, regardless of pending appeal
• ✓Must report any professional license, certification, or permit that was fined, suspended, revoked, or refused by any governmental agency

Trust bank accounts, deposit slips, checks, and signature cards must be designated as trust accounts in the firm/assumed name. Trust accounts for real estate sales or business opportunity transactions must be interest-bearing demand deposit accounts per RCW 18.85.285. The firm must maintain a pooled interest-bearing housing trust fund account for deposits of $10,000 or less, with interest paid to the department after reasonable bank charges (excluding check printing/bookkeeping fees). For deposits over $10,000, the licensee must disclose in writing that the depositor may choose a separate interest-bearing account (interest to the party) or the pooled account (if parties agree in writing).

• ✓Real estate sales/business opportunity trust accounts must be interest-bearing demand deposit accounts
• ✓Trust funds of $10,000 or less must go in the pooled interest-bearing housing trust fund account, with interest paid to the department
• ✓For deposits over $10,000, licensee must disclose in writing the option between a separate account (interest to party) or the pooled account (if parties agree in writing)

A separate check must be drawn on the trust bank account, payable to the firm as licensed, for each commission earned after the final closing of the real estate or business opportunity transaction. Each commission check must be identified to the transaction to which it applies.

• ✓A separate check payable to the firm must be drawn for each commission earned
• ✓Commission may only be drawn after final closing of the transaction
• ✓Each commission check must be identified to its specific transaction

No disbursements from the trust account may be made before closing or before a condition in the purchase and sale agreement occurs, to any person for any reason, without a written release from both purchaser and seller—except: if the agreement terminates by its own terms before closing, funds are disbursed as the agreement provides without a written release; and funds may be disbursed to the designated escrow agent reasonably before closing to permit checks to clear.

• ✓No disbursement before closing without a written release from both purchaser and seller
• ✓Exception: if the agreement terminates by its own terms, funds are disbursed per the agreement without a written release
• ✓Exception: funds may be disbursed to the designated escrow agent reasonably prior to closing to let checks clear

When bank charges/fees exceed interest earned, causing the balance to fall below trust account liability, the designated broker must deposit firm/nontrust funds within one banking day of receiving notice to bring the account into balance. For separate accounts (over $10,000), the broker may be reimbursed by the depositor if authorized in writing. For the pooled housing trust fund account, the designated broker must absorb the excess charges as a business expense.

• ✓Designated broker must deposit funds within one banking day of notice if charges exceed interest and cause a shortage
• ✓For separate accounts, the broker may be reimbursed by the depositor only if authorized in writing
• ✓For the pooled housing trust fund account, the broker absorbs the excess charges as a business expense

When a transaction provides for the earnest money deposit/note/instrument to be held by a party other than the firm, the licensee must deliver the earnest money to the party designated in the purchase and sale agreement, obtain a dated receipt, and deliver the receipt to the designated/managing broker. The dated receipt must be placed and retained in all participating firms' transaction files. The designated broker has ultimate responsibility for delivery of the funds.

• ✓Licensee must deliver earnest money to the party designated in the purchase and sale agreement
• ✓Licensee must obtain a dated receipt and deliver it to the designated/responsible managing broker
• ✓The dated receipt must be retained in all participating firms' transaction files
• ✓The designated broker has ultimate responsibility for delivery of the funds

For an application for an original or renewal license, approval of an education course/curriculum, or issuance of a cease and desist order, the preliminary record consists of the application (or cease and desist order) and associated documents, all documents relied upon by the program in proposing denial or in issuing the order, and all correspondence between the applicant/respondent and the program regarding the matter.

• ✓Record includes the application or cease and desist order plus associated documents
• ✓Record includes all documents the program relied upon to deny or to issue the order
• ✓Record includes all correspondence between the applicant/respondent and the program

For determining compliance with a previously issued final order or agreement, the preliminary record consists of the prior final order/agreement, all reports or documents submitted by or at the direction of the license holder toward fulfilling its terms, all correspondence regarding compliance, and all documents relied upon showing failure to comply.

• ✓Record includes the previously issued final order or agreement
• ✓Record includes reports/documents submitted toward fulfilling the terms
• ✓Record includes correspondence about compliance and documents showing noncompliance

For all other issues subject to a brief adjudicative hearing, the preliminary record consists of all documents relied upon by the program in proposing disciplinary action under RCW 18.235.110 and all correspondence between the license holder and the program regarding alleged violations.

• ✓Record includes documents relied upon in proposing discipline under RCW 18.235.110
• ✓Record includes correspondence between the license holder and program about alleged violations

A real estate licensee must perform all acts required by a real estate agreement as expeditiously as possible. Intentional or negligent delays in performance are considered detrimental to the public interest and constitute a violation of RCW 18.85.361(23).

• ✓Licensees must perform all acts required by a real estate agreement as expeditiously as possible
• ✓Intentional or negligent delays violate RCW 18.85.361(23) and are detrimental to the public interest

Every firm and branch office must be identified to the public by displaying the firm's licensed name or its licensed assumed name at the office address on the license.

• ✓Any firm or branch office must display the name of the firm or assumed name as licensed
• ✓The displayed name must be visible to the public at the address appearing on the license

During an investigation or audit, licensees may be required to provide written statements and/or explanations. Such a request can only be issued by an authorized representative of the director—such as an investigator, auditor, program staff, or other designee.

• ✓Licensees may be required to provide written statements and/or explanations during an investigation or audit
• ✓A request for a written statement or explanation can only be issued by an authorized representative of the director (investigator, auditor, program staff, or designee)

Candidates requesting a morning or afternoon exam are scheduled immediately and given a registration number. A candidate is assessed the full examination fee if they fail to give the testing service two days' notice to change the exam date, or fail to arrive and take the exam at the scheduled/rescheduled time.

• ✓Two days' notice must be given to the testing service to change an examination date
• ✓Failure to give two days' notice or to appear results in assessment of the full examination fee
• ✓Candidates are provided a registration number confirming their reservation

All properties managed by a firm must be supported by a written management agreement signed by the owner and designated broker, and it must be retained. The agreement must state at a minimum: the firm's compensation; the type and number of units or square footage (if non-residential); whether the firm is authorized to collect and disburse funds and for what purposes; any authorization to hold security deposits and how they may be disbursed; and the frequency of furnishing summary statements to the owner.

• ✓A written management agreement signed by the owner and designated broker is required and must be retained
• ✓The agreement must state the firm's compensation, property type/units, fund collection/disbursement authority, security deposit handling, and summary statement frequency
• ✓All rented or leased properties must be supported by a written rental or lease agreement

Each owner of managed property must be provided a summary statement (as provided in the management agreement) for each property managed. The statement must show: balance carried forward from the previous summary, total rent receipts, owner contributions, other itemized receipts, itemization of all expenses paid, ending balance, and the number of units rented or square footage if non-residential. The designated broker must retain a true copy of each summary statement.

• ✓A summary statement must be provided to each owner for each managed property
• ✓The statement must show carried-forward balance, rent receipts, owner contributions, other receipts, itemized expenses, ending balance, and units/square footage
• ✓The designated broker must retain a true copy of each summary statement

A firm may provide other services to owners of managed properties only if it makes full written disclosure of the broker's relationship with all persons providing such services, discloses fees charged in advance, and obtains the owner's permission. Any amendment or modification to the management agreement must be in writing, signed by the owner and designated broker, and retained.

• ✓Additional services require full written disclosure of relationships, prior fee disclosure, and owner permission
• ✓Any amendment or modification to a management agreement must be written, signed by owner and designated broker, and retained

All firm advertising must operate under the firm's licensed name or a licensed assumed name. This applies to all advertising and solicitations for brokerage services across all media, including internet-based advertising, web pages, email, newspapers, and other visual media.

• ✓A firm must operate under its firm name or an assumed name as licensed
• ✓All advertising and solicitations for brokerage services, including internet, web pages, email, newspaper, and other visual media, must include the firm name or licensed assumed name

Brokers and managing brokers who advertise using an unlicensed name, title, or brand must always display the firm's licensed name or assumed name in a clear and conspicuous manner alongside it. The name, title, or brand cannot suggest a separate legal entity or another firm/office, and prior written approval from the designated broker is required.

• ✓Must always use and display the firm's licensed name or assumed name clearly and conspicuously with any name, title, or brand
• ✓Must not use a name suggesting a separate legal entity such as 'Inc.,' 'LLC,' 'LLP,' 'Corp.,' 'firm,' or 'company'
• ✓Must not use terms commonly referencing a firm or office such as 'realty,' 'realtors,' 'firm,' or 'real estate'
• ✓Must receive advance written approval from the firm's designated broker to use an unlicensed title or brand

The designated broker bears ultimate responsibility for compliance, cooperation with the department, record accessibility, and trust account oversight. These duties are non-exclusive.

• ✓Must assure all real estate brokerage services comply with chapters 18.85, 18.86, 18.235 RCW and related rules
• ✓Must cooperate with the department in investigations, audits or licensing matters
• ✓Must ensure accessibility of the firm's offices and records and make copies of required records available upon demand
• ✓Must ensure monthly reconciliation of trust bank accounts and monthly trial balances are completed, accurate and up-to-date
• ✓Must ensure the trial balance and reconciliation show accounts are in balance
• ✓Must ensure policies/procedures exist for safe handling of customer or client funds or property

The designated broker may delegate duties to managing brokers through written, signed delegation agreements. Delegations must cover specific enumerated duties and can only be made to managing brokers licensed to the firm.

• ✓Must maintain up-to-date written delegation assignments signed by all parties
• ✓Delegations may only be made to managing brokers licensed to the firm
• ✓Delegations must address record maintenance, advertising, trust accounting, safe handling of funds/property, authority to bind, contract review, modify/terminate contracts, supervision of brokers, and heightened supervision of brokers licensed less than two years
• ✓Delegations must address hiring, transferring and releasing licensees to or from the firm

The designated broker must maintain and follow written policies covering home inspector referrals, supervision levels, and mandatory review of contracts involving inexperienced brokers.

• ✓Must maintain a written policy on referring home inspectors that protects the consumer's right to freely choose and prevents collusion
• ✓Home inspector referrals involving a business or familial relationship require full written disclosure prior to use of services
• ✓Must have a written policy on levels of supervision of all brokers, managing brokers and branch managers
• ✓Contracts involving any broker licensed less than two years must be reviewed by the designated broker or delegated managing broker within five business days of mutual acceptance, with documented proof retained

The designated broker must ensure all persons and the firm are properly licensed, ensure timely submission of transaction documents, and follow specific procedures when closing the firm.

• ✓Must ensure all persons performing brokerage services and the firm itself are appropriately licensed
• ✓Must ensure affiliated licensees submit transaction documents within two business days of mutual acceptance
• ✓When closing the firm, must provide the department a closing firm affidavit within five business days
• ✓Within five business days must ensure all brokerage service contracts are terminated or transferred to another licensed firm with written authorization
• ✓Within five business days must notify all parties to pending transactions that the firm is closing and either transfer documents or ensure completion without new licensable activity

Examination results are valid for one year only. A person who passes the broker or managing broker exam must become licensed within one year from the exam date, or they must retake and pass another examination.

• ✓Examination results are valid for one year only
• ✓Applicants must become licensed within one year from the exam date
• ✓Failure to become licensed within one year requires retaking and passing another exam

No disbursements of funds received as damage or security deposits on a lease/rental contract may be made to the owner or anyone else without the tenant's written agreement, until the end of the tenancy when funds are disbursed per the rental/lease agreement. When the management agreement terminates, owner funds are disbursed per the agreement; damage/security deposits go to the owner or successor property manager, and tenants are notified consistent with RCW 59.18.270.

• ✓Security/damage deposits may not be disbursed to the owner or others without the tenant's written agreement until the end of tenancy
• ✓On termination of the management agreement, security deposits go to the owner or successor property manager and tenants must be notified per RCW 59.18.270

Property management trust accounts are exempt from the interest-bearing requirement of RCW 18.85.285, but interest-bearing accounts may be established. Interest-bearing accounts or dividend-earning investment accounts holding only an individual owner's income-property funds may be established when directed by a written property management agreement/directive, with all interest accruing to the owner. Accounts holding only tenant damage/security deposits for a single owner's residential income property may be established with interest paid to the owner if the firm is designated in writing as 'representative of the landlord' under RCW 59.18.270. The broker need not create individual interest-bearing accounts when all owners assign interest to the firm. A common 'clearing account' may be established but must be a trust account.

• ✓Property management trust accounts are exempt from the interest-bearing requirement of RCW 18.85.285
• ✓Interest-bearing accounts require a written management agreement/directive with interest accruing to the owner
• ✓Interest on tenant security deposit accounts may go to the owner only if the firm is designated 'representative of the landlord' under RCW 59.18.270
• ✓A common 'clearing account' must be a trust account

Any property management accounting system must be an accounting of cash received and disbursed. Any other accounting method offered to owners must be supplementary to the firm's accounting of all cash received and disbursed through the trust account(s). All owners' summary statements must include this cash accounting.

• ✓Property management accounting must be an accounting of cash received and disbursed
• ✓Other accounting methods must be supplementary to the firm's cash accounting
• ✓All owner summary statements must include the cash accounting

Preauthorization of disbursements or deductions by the financial institution for recurring expenses (such as mortgage payments) on behalf of the owner is not permitted if the account contains tenant security deposits or funds belonging to more than one client.

• ✓Preauthorized recurring disbursements are prohibited if the account holds tenant security deposits
• ✓Preauthorized recurring disbursements are prohibited if the account holds funds of more than one client

A single check may be drawn on the trust account payable to the firm as licensed for all property management fees and commissions if supported by a schedule of commissions identified to each individual client. Property management commissions must be withdrawn at least once monthly.

• ✓A single check for all PM fees/commissions is allowed if supported by a schedule identifying each client
• ✓Property management commissions must be withdrawn at least once monthly

Brief adjudicative proceedings are conducted by a presiding officer designated by the director. That officer must not have personally participated in the decision that led to the request for the brief adjudicative proceeding, ensuring impartiality.

• ✓The presiding officer is designated by the director
• ✓The presiding officer must not have personally participated in the underlying decision

Parties or their representatives may present written documentation by a date the presiding officer sets. The officer may, at discretion, allow oral argument, but no witnesses may testify. The officer may use agency expertise in addition to the record. The officer cannot issue an oral order and must enter a written initial order within ten days of the final date for submitting materials or oral argument.

• ✓Parties may submit written documentation by the deadline set by the presiding officer
• ✓Oral argument is discretionary; no witnesses may appear to testify
• ✓The officer may employ agency expertise as a basis for the decision
• ✓No oral orders allowed; an initial order must be entered within ten days of the final submission date

Complaints are reviewed to determine whether the allegations describe an apparent violation of laws the department administers. Staff may perform fact-finding to assess merit. Even a meritorious complaint may not be investigated based on the gravity of the alleged violation or department resources and priorities. If additional violations are discovered during an audit/investigation, the auditor or investigator may investigate them and request related records and explanations.

• ✓Complaints are reviewed to determine if they describe an apparent violation of laws the department administers
• ✓The department may decline to investigate even a meritorious complaint based on gravity of the violation or department resources and priorities
• ✓If an auditor/investigator discovers evidence of additional violations beyond the complaint, they may investigate and request records and explanations regarding those additional violations

Real estate firms are subject to routine audits scheduled approximately every three years. Audits are conducted at the firm's licensed location or a department-chosen facility. An audit can be initiated at any time based on previous audit results or a complaint. Audits are unscheduled but normally occur between 8:00 a.m. and 5:30 p.m., Monday through Friday, excluding state holidays. An auditor may appear unannounced during these hours, and the licensee may be required to produce all records they are required to keep at that time.

• ✓Routine audits are scheduled approximately every three years
• ✓Audits are normally conducted between 8:00 a.m. and 5:30 p.m., Monday through Friday, excluding state holidays
• ✓An auditor may appear unannounced during those hours and require production of all records the licensee must keep
• ✓An auditor may not forcibly enter a licensed business location unless accompanied by law enforcement pursuant to a valid search warrant
• ✓Refusal to permit access may result in disciplinary action under chapters 18.85 and 18.235 RCW
• ✓An audit can be initiated at any time based on previous audit results or a complaint

The department may not charge for the cost of routine audits. However, audit costs may be charged to the licensee under RCW 18.235.110(2) when the department audited pursuant to a complaint, violations were found, and the director issued an order imposing sanctions. An auditor and licensee may mutually agree to complete or continue an audit outside the normal time and date limitations.

• ✓The department may not charge for the cost of routine audits
• ✓Audit costs may be charged to the licensee only when the audit was pursuant to a complaint, violations were found, and the director issued a sanction order
• ✓An auditor and licensee may mutually agree to conduct an audit outside the normal time/date limitations

For a firm actively licensed in another jurisdiction where the broker's headquarters is located, 'office' under RCW 18.85.231 means the Washington location where trust account and transaction records are maintained. Records must be kept for three years, open and accessible to the department of licensing, and the transaction parties may access records prepared or retained for them.

• ✓The 'office' is the Washington location where trust account and transaction records are maintained
• ✓Records must be maintained for three years and be accessible to the department of licensing
• ✓Transaction parties have access to the records prepared or retained for them

A firm headquartered and actively licensed in another jurisdiction seeking Washington licensure must obtain a firm license and register a natural person who qualifies as a Washington managing broker and holds a controlling interest in the firm to serve as the Washington designated broker. The firm must notify the real estate program of the Washington records location and include that address with the headquarters address on the application. The Washington license must be posted at the Washington location where records are kept. Within 30 days after the notice of audit is mailed, the broker must appear at the department's Olympia office by appointment to sign the audit report.

• ✓The firm must obtain a Washington firm license and designate a qualifying managing broker with controlling interest as Washington designated broker
• ✓The Washington records location address must be reported and the license posted there
• ✓Within 30 days of the mailed audit notice, the broker must sign the audit report at the department's Olympia office by appointment

The branch manager oversees the branch office including supervision and licensing of its personnel, and may perform delegated trust accounting and other duties if authorized by the designated broker.

• ✓Must assure brokerage services comply with chapters 18.85, 18.86, 18.235 RCW and cooperate with department investigations/audits
• ✓Must ensure all persons at the branch are appropriately licensed and oversee all branch activity including heightened supervision of brokers licensed less than two years
• ✓Must ensure affiliated licensees submit transaction documents within two business days of mutual acceptance
• ✓If delegated, must ensure monthly trust account reconciliation, monthly trial balances, that accounts are in balance, and safe handling of funds/property
• ✓If delegated, may handle record maintenance, proper advertising, contract review, and following the designated broker's written policies including five-business-day contract review for inexperienced brokers

Applicants who lack the three years of full-time broker experience required by RCW 18.85.111 may qualify via practical experience allied with real estate. The application must include a letter requesting approval, a detailed history/resume with documentation, and a certified license affidavit as applicable. Recognized alternatives include: postsecondary real estate study plus one year as an actively licensed broker; one year as a licensed attorney practicing real estate; five years as a licensed mortgage broker/loan originator; five years as a licensed limited practice officer/escrow agent; five years as a licensed/certified appraiser; or five years managing/leasing/selling/buying property for a third-party entity. All experience must have been completed within the six years immediately preceding application.

• ✓Alternative qualification substitutes for the three years of full-time broker experience under RCW 18.85.111
• ✓A letter, detailed history/resume with documentation, and certified license affidavit must accompany the application
• ✓Most alternatives require five years' full-time experience (mortgage broker/loan originator, LPO/escrow agent, appraiser, third-party property management); attorney and real estate education routes require one year
• ✓All qualifying experience must have been completed within the six years immediately preceding the application date

All record requests must be issued by an authorized representative of the director. Requests for records, documents, or detailed explanations must be in writing—by regular mail, fax, email, or in person. Investigators will not request documents/explanations by telephone unless followed by a written request. A licensee cannot be charged with failure to cooperate unless the investigator made a written request describing the records with sufficient specificity. An investigator may inspect a licensee's licensed business location and records without a warrant during normal business hours or an agreed appointment.

• ✓Requests for records, documents, or explanations must be in writing (regular mail, fax, email, or in person)
• ✓Telephone requests are not valid unless followed by a written request
• ✓A licensee will not be charged with failure to cooperate unless the written request describes the records with sufficient specificity
• ✓An investigator may inspect a licensed business location and records without a warrant, between 8:00 a.m. and 5:30 p.m., Monday–Friday (excluding holidays), or during an agreed appointment
• ✓An investigator may not forcibly enter a location unless accompanied by law enforcement pursuant to a valid search warrant
• ✓Refusal to permit access may result in disciplinary action under chapters 18.85 and 18.235 RCW

• A. The rental agreement is month-to-month and the fee is charged after 3 days of nonpayment
• B. The late fee is specified in the written rental agreement and rent remains unpaid after a grace period of at least 5 days from the due date ✓ Answer
• C. The landlord provides the tenant with written notice of the late fee at least 30 days before charging it
• D. The late fee does not exceed 10% of the monthly rent and is registered with the county assessor

• A. 30 days
• B. 60 days
• C. 90 days
• D. 120 days ✓ Answer

• A. Appoint an attorney, at no cost to the tenant, to represent the indigent tenant in the unlawful detainer action ✓ Answer
• B. Require the landlord to post a bond equal to three months' rent before the case may proceed
• C. Automatically stay the proceeding for 90 days so the tenant can apply for rental assistance
• D. Require the tenant to deposit one month's rent into the court registry before filing an answer

• A. It must be deposited in the same trust account as the security deposit and itemized on the same receipt
• B. It is considered a security deposit and subject to all security deposit rules including the 21-day return requirement
• C. It may be held in any account the landlord chooses because it is rent, not a deposit, and earns no interest for the tenant ✓ Answer
• D. It must be kept in a separate interest-bearing account and the interest paid to the tenant annually

• A. A 10-day notice to comply or vacate, giving the tenant the opportunity to cure the lease violation before an eviction action can be filed ✓ Answer
• B. A 14-day notice to pay or vacate, because any lease violation is treated the same as unpaid rent
• C. A 3-day notice to quit with no opportunity to cure, because keeping an unauthorized pet is considered waste or nuisance
• D. A 20-day notice terminating the tenancy at the end of the rental period, because the landlord may end a tenancy for any reason

• A. Only the monthly bank statements for the prior 12 months
• B. Journals, ledgers, bank statements, deposit slips, cancelled checks or check images, and monthly reconciliation records for the period required by WAC 308-124C ✓ Answer
• C. A summary ledger only, provided it is certified annually by a licensed CPA
• D. Records for the current calendar year only, as prior years may be archived off-site and need not be produced within 24 hours