New Predatory Home Buying Rules in Seattle

Ordinance 127292 adds a new Chapter 6.610 to the Seattle Municipal Code (“SMC”) entitled Residential Property Transactions.

The ordinance is designed to address “predatory home-buying practices” in the City of Seattle, specifically, when buyers (or buyer’s representatives) solicit owners of residential property that is not publicly listed for sale and offer to purchase those properties.

No. The City’s FAQ states: “Does this ordinance apply to licensed real estate agents/brokers? No, ordinance 127292 does not apply to a buyer or seller who is represented by a licensed real-estate broker.”

While the ordinance may not apply to transactions conducted via licensed brokers, you should still observe good practice, counsel your clients on appraisal and fair-value considerations and be mindful of your duties under other laws.

It requires that when a buyer or buyer’s representative solicits an owner of residential property (that is not publicly listed for sale) and presents a purchase contract, the owner must be given:

• a written notice at least five business days before signing the contract.
• the right to obtain an appraisal.
• the right to hire a real-estate agent and seek legal counsel.
• the right to access fair-market-value resources.
• the right to cancel the contract within specified timeframes after contract signing or receipt of the appraisal.

The ordinance provides that a buyer (or buyer’s representative) may face civil penalties of $7,500 for a first violation and $10,000 for each subsequent violation within a 12-month period. Additionally, individuals or entities with two violations within 12 months may be publicly listed.