Agency Disclosure
Definition and meaning of Agency Disclosure in real estate.
An agency disclosure is a written explanation given by a real estate licensee to a buyer or seller that details the nature of their professional relationship and identifies whom the agent represents in the transaction. This disclosure is required by law in most states to ensure consumer transparency.
In more detail
The disclosure must typically be provided at the first substantive contact, which is when a consumer begins sharing confidential financial or personal information with the agent. By understanding whom the agent represents, consumers can make informed decisions about what information to share. For instance, a buyer should know if the agent showing them a home actually represents the seller's interests.
The form itself is not a contract or an agreement, but rather a notice confirming that the consumer has been informed of their representation options.
Key facts
| Category | Buying & Selling |
|---|---|
| Required by | State licensing laws |
| Typical timing | At first substantive contact |
| Document type | Information disclosure, not a contract |
Before showing a buyer a house, a real estate agent presents them with a state mandated agency disclosure form explaining that the agent is representing the buyer in this transaction.
Frequently asked questions
Does signing an agency disclosure form obligate me to work with that agent?
No, signing an agency disclosure simply acknowledges that you received the information; it is not a representation agreement and does not obligate you to use the agent.
What happens if an agent fails to provide an agency disclosure?
An agent who fails to provide this required disclosure can face disciplinary action from the state real estate commission, including fines or the suspension of their license.