Unlike Texas (which mandates TREC-promulgated forms), Washington does not have a single state-mandated purchase and sale form. Instead, the overwhelming majority of residential transactions use forms published by the Northwest Multiple Listing Service (NWMLS) — particularly NWMLS Form 21, the Residential Purchase and Sale Agreement. Attorneys may draft custom agreements, and commercial transactions use forms from other sources.
For exam purposes, understand the structure of NWMLS-style agreements because they represent standard Washington practice.
Form 21 covers:
Under NWMLS practice, a purchase and sale agreement becomes binding when both parties have signed AND the signed contract has been delivered to (or received by) the other party or their agent. The date of mutual acceptance is the "Effective Date" — triggering all time-sensitive deadlines:
Mutual acceptance ≠ date of signing. A signed contract sitting undelivered has not been mutually accepted.
Earnest money may be held by either:
When earnest money is disputed and parties cannot agree, the holding broker must either: 1. Disburse per written agreement of the parties, OR 2. File an interpleader action in superior court within 20 days of receiving a written demand for the funds
The broker cannot simply hold the funds indefinitely — WAC requires action within 20 days of a written demand.
Real-world example: A Seattle transaction falls apart after the inspection period. The buyer wants their earnest money back; the seller claims the buyer breached the contract and is entitled to the earnest money as liquidated damages. Both parties submit written demands to the listing firm holding the funds on June 1. The listing firm must either get both parties to sign a mutual release OR file interpleader in King County Superior Court by June 21.
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Quiz Questions:
Q1. An earnest money check is received by the listing firm on Wednesday morning. By when must it be deposited in the firm's trust account?
A) By the end of the following Monday (5 business days) B) By Thursday (1 business day after receipt) C) By the end of the week it was received D) By the closing date
Answer: B — WAC requires earnest money to be deposited in the trust account within 1 business day of receipt. Received Wednesday = must be deposited by Thursday.
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Q2. A Washington buyer signs a purchase and sale agreement on Monday. The seller signs on Wednesday. The buyer's agent receives the fully signed contract by email on Thursday morning. What is the mutual acceptance date?
A) Monday — when the buyer signed B) Wednesday — when the seller signed C) Thursday — when mutual acceptance is complete (both signed AND delivered to the buyer's agent) D) Friday — one business day after Thursday
Answer: C — Mutual acceptance requires both execution AND delivery. The seller signed Wednesday, but delivery to the other party's agent occurred Thursday. Thursday is the mutual acceptance date and the starting point for all deadlines.
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Q3. A Washington transaction fails. Both the buyer and seller claim the earnest money held by the listing firm. Neither will sign a mutual release. On July 5, both parties submit written demands to the listing firm. What must the listing firm do?
A) Pay the earnest money to the seller as liquidated damages B) Hold the funds until a court order is received, with no time limit C) File an interpleader action in superior court within 20 days of July 5 D) Return the funds to the buyer because the buyer deposited them
Answer: C — WAC rules require the holding broker to file an interpleader action within 20 days of receiving a written demand when the parties dispute disbursement and cannot agree. The broker cannot unilaterally decide who gets the money, and indefinite holding is not permitted.
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Q4. A Washington buyer and seller reach a mutual release agreement releasing earnest money to the buyer. The listing firm holds the funds. Who must authorize the release?
A) The listing firm's designated broker alone B) NWMLS, as the form publisher C) Both the buyer and seller through the written mutual release agreement D) The county superior court
Answer: C — Earnest money can be released to either party by written mutual agreement of both buyer and seller. No court order is needed if the parties agree. The broker distributes per the written mutual release.
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Q5. In Washington, if a buyer breaches a purchase and sale agreement by refusing to close without a valid basis, what remedy does the seller typically have available?
A) The seller is limited to keeping the earnest money as liquidated damages; no other remedy is available B) The seller may retain the earnest money as liquidated damages and/or pursue specific performance (a court order compelling the buyer to close) C) The seller must immediately relist the property and can only recover costs of relisting D) The seller can pursue a deficiency judgment for the difference between the contract price and any lower resale price
Answer: B — In Washington, the seller's remedies for buyer default typically include (1) retaining earnest money as liquidated damages and/or (2) suing for specific performance (compelling the buyer to close). Because real property is unique, specific performance is available even though it requires court action. The seller generally cannot pursue both simultaneously.