Washington State Real Estate Practice Exam

The primary purpose of a property management agreement is to outline the responsibilities and compensation of the property manager. This agreement establishes the working relationship between the property owner and the property manager, detailing the specific duties the manager will undertake, such as leasing, maintenance, and tenant relations. Additionally, it specifies how the property manager will be compensated, which can include flat fees, percentages of rent collected, or a combination of both. This clarity is essential as it helps prevent misunderstandings about roles and expectations, ensuring smooth operations and solid management of the property.

While securing financing for property purchases, setting rules for tenants, and guaranteeing rental income are important aspects of real estate management, they do not capture the essence of what a property management agreement fundamentally addresses. The agreement primarily serves to define the operational framework between the owner and the property manager, making sure both parties are aligned on their responsibilities and financial arrangements.