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(Updated January 2013)
Managing risk is a necessity for real estate practitioners. According to Barron's Dictionary of Real Estate Terms, agency disclosure "is a written explanation, to be signed by a prospective buyer or seller, explaining to the client the role that the broker plays in the transaction," (Barron's Educational Series, 2000). This Field Guide covers various aspects of agency disclosure, including policies, forms, and legislation. Further your knowledge of this complex topic with our selection of articles found below. (K. Stockert, Information & Web Content Specialist)
Agency Disclosure Facts from NAR's 2011 Legal Scan
- More than 33% [of the survey respondents] believe there is a significant need for training about Agency Disclosure.
- 63% of the respondents believe the number of disputes will stay the same over the next two year.
First-time and repeat buyers who signed a disclosure statement:
- Yes, at first meeting: 29%
- Yes, when contract written: 20%
- Yes, at some other time: 11%
- No: 21%
- Don't know / Not sure: 19%
Source: The 2012 Profile of Home Buyers and Sellers
About Agency Disclosure
The Riskiest Business, (REALTOR® Magazine, Sept. 2011).
Real Estate Brokerage Research in the New Millennium, (Journal of Real Estate Literature, 2011). Q
A Critical Examination of Broker Minimum Service Laws, (Journal of Housing Research, 2010). Q
Must I Disclosure My Client Relationship? (REALTOR® Magazine, Sept. 2010).
Walking the Fine Line: Distinguishing between tokens of appreciation and bribes, (Journal of Property Management, Nov./Dec. 2010). Q
Brokers Must Reveal More, (Wall Street Journal, Sept. 2, 2010).
Agency Disclosure in the Real Estate Transaction and the Impact of Real Estate Policies, (The Journal of Real Estate Research, July/Sept. 2009). Q
Disclosure Recordkeeping
Mitigating disclosure risk starts with solid recordkeeping practices. Knowing which materials to keep and how to store them is the challenge. The articles below offer some ideas for best practices and procedures. You can also take a page out of libraries' books and subscribe to the LOCKSS method (Lots of Copies to Keep Stuff Safe). Keep in mind neither digital nor print are impervious to the perils of disaster—maintaining copies in various formats and locations can often provide the greatest longevity for your records. However, ensuring the security and privacy of all copies of materials is an important factor to consider.
Fighting the Frivolous, (REALTOR® Magazine, Oct. 2012).
National Clean Off Your Desk Day: 6 Easy Tips, (REALTOR® Magazine, Jan. 2012).
Protect Your Computer: Private WiFi Review, (Freelance Switch, Aug. 17, 2011).
Standing at the Altar, (Journal of Business Case Studies, July/Aug. 2011). Q
Transaction Management Solutions: Get Smoother Transactions, (REALTOR® Magazine, Mar. 2008).
The Real Deal, (Print Professional, 2007). Q
Dual Agency
A Peek 'Behind the Curtain' at Real Estate Practices, (Inman News, Aug. 19, 2011).
When Agents Play Two Roles, (New York Times, Aug. 11, 2011).
Make It All About the Buyers, (REALTOR® Magazine, June 2011).
Agency Relationships, (Realty Times, Aug. 11, 2011).
Disclosure Materials from Your State
The laws and regulations for agency disclosure may vary from state to state. As a member of the National Association of REALTORS®, you can contact your State Association of REALTORS® for specific details on your state's disclosure requirements. The National Association of REALTORS® collects information on state specific legal issues in the State Issues Tracker:
National Association of REALTOR®'s State Issues Tracker, (See: Agency).
Some state real estate commissions have included helpful materials on their websites regarding agency disclosure. A few examples:
The Louisiana Real Estate Commission Agency Disclosure Forms
Massachusetts Office of Consumer Affairs & Business Regulation Dual Agency web page
Commonwealth of Virginia Division of Real Estate and Professional Licensing Forms and Agency Disclosure Statement
State of Ohio Department of Commerce Division of Real Estate and Professional Licensing Forms
Illinois Salesperson to Broker Applied Real Estate Practices, HD 1375 D34s
Or run this search to find more government resources:
real estate agency disclosure inurl:gov
Agency Legal Cases
Contract Incentives and Effort, (Journal of Real Estate Research, Oct.-Dec. 2010). Q
Broker Awarded Commission from Failed Transaction, (Mich. Ct. App., Nov. 20, 2008).
Broker Cannot Collect Undisclosed "Consulting Fee" (2003), (National Association of REALTORS®, Letter of the Law).
Research on Your Own
To search for the most recent articles on this topic, click ProQuest at the bottom right of the Library's home page and enter subject terms such as:
Real estate agents & brokers
- Real estate agents & brokers
- Enter into ProQuest text box as SUB(real estate agents & brokers) AND NOT hoover
- Disclosure and Real Estate Agents & Brokers
- Enter into ProQuest text box as disclos* AND SUB(real estate agents & brokers)
Information Savvy!
Many websites, such as Wikipedia, can be great resources to quickly get oriented on a subject before conducting more in depth research. However, anyone in the world can create and maintain a website or write a seemingly legitimate article and may, intentionally or unintentionally, publish false or "misinformation." When reviewing information on the Internet, you should always consider the ABC's:
- Accuracy. Is the information accurate? Can you confirm the same information using other resources published by a different author or organization?
- Author. Who composed the information? Can you easily identify the author and contact the author or website publisher?
- Bias. What bias might the author or author organization have?
- Credibility. What is the author’s or author organization’s credentials for publishing the information? What expertise, experience, or education does the author have in this area that makes him or her qualified to write on the subject matter?
- Currency. When was the web page last updated? Is it possible the information might have changed since this web page was last published?
- Critical eye! Remember to always use your discretion and critical eye to determine whether information you find on the web (or even in books and news sources!) is trustworthy. Putting websites to the ABC test will get you started in developing a strong critical eye.
eBooks & Other Resources
eBooks.realtor.org
The following ebooks and digital audiobooks are available to NAR members:
Real Estate Salespeople, Beware! (Adobe eBook)
Get It Together (Adobe eReader)
The Real Estate Entrepreneur (Adobe eReader)
Books, Videos, Research Reports & More
The resources below are available for loan through Information Central. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Information Central at 800.874.6500 for assistance.
Digest of Real Estate License Laws and Current Issues, (Lake City, UT: Arello (published annually). HD 1383 N21d
Field Guides & More
These field guides and other resources in the Virtual Library may also be of interest:
Field Guide to Errors & Omission Insurance
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The inclusion of links on this field guide does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this field guide complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.