A required notification informing consumers which party or parties a real estate licensee represents in a transaction.
Why Agency Disclosure matters on the exam
This term belongs to Practice of Real Estate. The questions below are real items from Freehold's bank that use it - each one cites its source.
Exam questions using Agency Disclosure
Every Freehold question shows why the right answer is right — and cites its source.
Which of the following is NOT typically part of a designated broker's general oversight duty?
Reviewing licensee advertising for accuracy
Carefully reviewing transaction files for completeness and accuracy
Setting the personal political affiliations of licensees
Ensuring licensees comply with agency disclosure requirements
Show answer & explanation
Setting the personal political affiliations of licensees — A broker's supervisory duty concerns licensees' real estate practice and license-law compliance, not unrelated personal matters such as political affiliation.
Source: PSI National Real Estate Exam Content Outline — Broker Supplement
Why do recordkeeping requirements typically apply to disclosures such as property condition or agency disclosure forms, not just financial documents?
Disclosure forms are irrelevant to consumer protection and are kept only as a matter of long-standing office custom in the trade
Disclosures must be retained only by the appraiser, never the broker
Disclosure forms are never considered part of a transaction file
Retained disclosure records help demonstrate that required legal disclosures were actually made if a dispute later arises
Show answer & explanation
Retained disclosure records help demonstrate that required legal disclosures were actually made if a dispute later arises — Keeping copies of disclosure forms provides evidence that legally required disclosures were made, which can be critical if a buyer or seller later disputes what was disclosed.
Source: PSI National Real Estate Exam Content Outline — Broker Supplement
A seller's agent routinely refers clients to a home inspection company owned by the agent's brother, without ever mentioning the relationship. This practice raises a concern under the duty of:
Obedience, because the client never expressly approved the referral in writing beforehand
Loyalty, because an undisclosed financial or family conflict of interest can compromise objective advice to the client
Accounting, because the inspection fees involved in this referral are not being held in the brokerage's own separate trust account
Disclosure of agency, because no separate agency disclosure form was ever formally signed by either the client or the licensee
Show answer & explanation
Loyalty, because an undisclosed financial or family conflict of interest can compromise objective advice to the client — Loyalty requires agents to disclose conflicts of interest, such as referring business to a relative, so the client can evaluate the recommendation objectively.
Source: PSI National Real Estate Exam Content Outline §5 General Principles of Agency
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