What is the primary purpose of the agency disclosure form?

The agency disclosure form primarily serves to inform all parties involved in a real estate transaction about the nature of the agency relationship. This includes clarifying the roles and responsibilities of the agent in relation to the client and other parties, which is crucial for transparency and trust in the transaction. Understanding agency relationships helps clients know who represents their interests and the obligations the agent has toward them.

This transparency is required by law in many jurisdictions, ensuring that buyers and sellers are aware of whether the agent is acting on behalf of the buyer, seller, or both (dual agency). By providing this information at the outset, the agency disclosure form helps prevent misunderstandings and potential legal issues later on.

Other options address aspects that are not the main focus of the agency disclosure form. For instance, detailing a property’s physical characteristics does not pertain to the agency relationship; it is more part of property listings or marketing materials. Similarly, negotiating terms is a function performed by the agent, but it is not the purpose of the disclosure form itself. Collecting commissions, while relevant to the business side of real estate, is also not the purpose of the agency disclosure form, which is aimed strictly at informing parties about the agency relationship.