Online Real Estate Licensing System

Winter 2017

The Department of Licensing (DOL) has made some new changes as they embrace the available technology. The DOL has offered the option to renew your license online, but is now going to be expanding the available options for brokers and managing brokers. They will be able to change their information (e.g. name, address, email), change their license status and order duplicate licenses. While the option to complete these tasks in paper form still exists, it is becoming a thing of the past.

The DOL is implementing the complete online system in three phases.

  1. The first phase will offer the ability to renew licenses, update personal information (name, address, adding an email address), and order duplicate licenses. 
  2. The second phase will add functionality specific to firms, branch offices, and designated brokers. 
  3. The third phase will incorporate changes to streamline the broker transfer process.

Real Estate Market Roundup - Winter 2014

Winter 2014

The statewide housing recovery has accelerated throughout Washington during 2013, led by strong home sales in the greater Seattle market. Housing construction, which had been limited to apartments, has now begun to improve in the important single-family sector. Home price increases have outpaced expectations, and caused some to worry if a new bubble is forming. The recovery is uneven, however, and risks abound. Discussions now focus on increasing mortgage rates, whether the automatic conversion of home equity loans taken out during the boom into amortizing loans will spur a new wave of defaults, and whether the continuing stalemates in DC over budgetary issues will trigger future economic dislocations.

Sales and Construction Activity

Home sales activity in Washington during the third quarter of 2013 increased 7.1 percent from the second quarter to a seasonally adjusted annual sales rate of 99,960 home sales. This is the highest sales rate since the second quarter of 2007, and markets the fifth consecutive quarter of increasing sales rates.

Despite the strong statewide performance, sales activity 

declined compared to the second quarter (using seasonally adjusted annual rates) in seven counties, while sales declined compared to the third quarter of 2012 in just two counties. The quarter-to-quarter sales rates declined in four metropolitan areas: Lewiston, ID-WA; Olympia; Walla Walla; and Wenatchee. By contrast, sales increased from the second quarter by more than 10 percent in 20 counties. 

Construction activity, measured by the number of homes and apartments for which building permits were issued by those cities and counties reporting data monthly to the Census Bureau, totaled 7,626 in the third quarter, 2.2 percent above the number in the third quarter of 2012. Once again the multifamily sector saw an increasing number of permits issued, while the number of singlefamily permits issued in the third quarter decline 0.4 percent from the same time last year. These building permit statistics are limited to the 32 counties where at least some of the permitting jurisdictions report to the Census Bureau. The value of single-family permits increased by 2.2 percent compared to a year ago, reaching $1.1 billion throughout the state, and that is exclusive of land values. Since the total value went up while the number of units permitted declined a bit, the value per permitted unit clearly increased.

Home Prices

Reporting home prices has changed dramatically in the last few years. The most common statistics are median and average sales prices, with most analysts preferring medians (half higher, half lower) as more indicative of market conditions, especially since average prices tend to run about 20 percent higher than medians. However, both medians and averages depend on what sold during the period, and are influenced by changes in composition, meaning they are not measures of appreciation or depreciation in the values of individual homes. During the third quarter of 2013 the median price in Washington was $263,400. This represented an increase of 8.4 percent ($20,500) compared to a year earlier. 

Local medians ranged from a high of $438,000 in King County to a low of $70,000 in rural Lincoln County. Only five counties reported a lower median price than a year ago, and only one of those (Chelan) was in a metropolitan area. Double-digit increases in medians were reported in 12 counties, four more than during the third quarter of 2012.

Several groups, especially S&P Case-Shiller and the Federal Housing Finance Agency (FHFA), report repeatsales measures which are a better measure of appreciation. Those measures use only properties where they have access to at least two sales, adjust the sales prices for changes in quality (e.g. substantial rehabilitation or additions), and focus on monitoring changes over time. The data are reported as indexes and changes, not prices in dollars. Because of the sophisticated statistical modeling involved, the data are often released with considerable delays (especially CaseShiller).

No data on non-urban markets are available from either source. CaseShiller only reports 20 markets while FHFA reports all metropolitan areas and statewide measures. FHFA reported that the appreciation in Washington home prices was the fifth highest among the states in the third quarter at 11.92 percent. The four states with more rapid appreciation were hit much harder during the recession. Even after the rapid run-up, FHFA indicated prices remain 8.2 percent below their third quarter 2008 level. 


Housing affordability is not defined exclusively by prices, although they are a significant component of affordability’s three legged stool. The other legs are the mortgage interest rate (since relatively few homes purchased by owner-occupants are cash sales) and the purchaser’s income. Mortgage interest rates jumped early in the quarter, then stabilized at a new higher plateau. Incomes continued their gradual improvement, but the increases were less the overall inflation. 

The Runstad Center produces two measures of housing affordability, following the model developed in 1982 at the National Association of Realtors®. The All-Buyer Housing Affordability Index (HAI) compares the mortgage payments on a median price home to median FAMILY income (2 or more persons, related by blood, marriage or adoption) assuming a 20 percent downpayment and allocating 25 percent of gross income to principal and interest payments. An index of 100 means the family can just afford the median price home, and higher values are more affordable.

The statewide HAI in the third quarter was 144.4, meaning the typical family has 44.4 percent MORE income than the minimum required to qualify for a mortgage on the median price home. Only San Juan County reported an index level below 100. While this affordability level is high by historic standards, it must be noted that it declined by 24.4 points from a year ago, and 22.2 points from only three months ago. Such rapid reduction in affordability is worrisome. Among urban markets the affordability indices ranged from a low of 106.8 in King County to a high of 183.8 in Benton County (Kennewick/Richland).

Renters generally confront greater challenges becoming home owners. Accordingly, the Runstad Center’s First Time Buyer Affordability Index (FTBHAI) assumes a less costly home (85 percent of area median), a lower down payment (10 percent) and a lower income (70 percent of median household income, which includes often lowerincome single person households). The statewide FTBHAI in the third quarter was 80.6, down from 92.6 in the second quarter. That is a 13 percent reduction in affordability in only three months! First-time buyer affordability indexes ranged from 48.8 in San Juan County to a high of 264.0 in rural Lincoln County. The range is metropolitan counties was from 58.9 in King County to 120.5 in Benton County. For reference, it is always challenging for such income restricted households to afford a home of their own, and the Runstad Center believe a FTBHAI of 80 represents a reasonable opportunity for a well-qualified first-time homebuyer to find an acceptable home they can afford.

Retention of Electronic Communications - Winter 2014

Winter 2014

Electronic Communications (EC), including emails, texts, tweets and the like, has become an indispensable tool for licensees in conveying vital information in real estate. EC is used by licensees to receive and send to various parties to the transaction copies of contracts, disclosures and other important documents and information. And like all other documents and writings obtained or executed by a licensee in connection with a transaction, EC must be maintained by the firm as part of the transaction file. However, maintaining EC goes beyond ensuring compliance with record keeping requirements. It is becoming more commonplace in the Real Estate Program’s audits and investigations that firms or licensees are unable to produce crucial EC that would contain information that would demonstrate compliance with Real Estate Law. The purpose of this article is to remind real estate licensees of the importance of maintaining and retaining transaction records, including EC.


The Real Estate Law clearly defines what records must be maintained. The designated broker shall keep adequate records of all real estate transaction handled by or through the firm or firms to which the designated broker is registered. The administrative code specifically requires trust account records, up to date log of all agreements, legible copies of transactions or contracts for brokerage services, all agreements, receipts, documents, leases, closing statements and material correspondence. All records must be kept for a minimum of three years. All of these documents must be maintained at the firm’s licensed location and available upon demand by the department.


For best practices and to ensure compliance in this EC age, every real estate firm should have written office policies and procedures. Office policies and procedures should set forth how EC is created, sent or received in connection with a brokerage services transaction. Maintaining EC goes well beyond simple record keeping compliance. EC often holds the key to proving whether a licensee disclosed a material fact or provided a required disclosure, and retaining and maintaining these important communications may reduce the licensee’s need to defend against unwarranted allegations.

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