Not necessarily. To understand the answer to this question, it’s important to know a few fundamental Virginia agency law principles and definitions.

First, a written “Brokerage Agreement” is required whenever the licensee establishes a “Brokerage Relationship” with a client. (VA Code § 54.1-2137). A “Brokerage Relationship” is defined as a contractual relationship between a client and a real estate licensee who has been engaged by the client for the purpose of “procuring a seller, buyer, option, tenant, or landlord ready, able, and willing to sell, buy, option, exchange or rent real estate on behalf of a client” (VA Code § 54.1-2130).

In short, if a customer hires you “to procure a seller, buyer, option, tenant, or landlord ready, able, and willing to sell, buy, option, exchange or rent real estate” on the customer’s behalf, that customer becomes a “client” with whom you are required to have some type of written “Brokerage Agreement.” Under § 54.1-2140, the payment or promise of payment or compensation to a real estate broker does not by itself create a “Brokerage Relationship.”

In the context of advertising FSBO properties, if the only understanding between the parties is that Brokers will allow the owner to market the FSBO property on Broker’s website, there is no “Brokerage Relationship” since Broker is not being engaged for the purposes of § 54.1-2130. Since there is no “Brokerage Relationship,” the FSBO is a “customer” and not a “client.” This distinction is important because most statutory/regulatory agency rules extend to “clients” and not “customers.”

It is also important to remember that Realtors® may still have ethical obligations to “customers” under Articles 1 - 9 and 11 of the COE.