When must the disclosure of agency be given?

The disclosure of agency must be provided at the first substantive dialogue between the licensee and a party to the transaction. This point is critical because it ensures that all parties are aware of the nature of the relationship between them and the real estate agent before any negotiations or discussions about the transaction progress further.

First substantive dialogue indicates a meaningful conversation where specific topics related to the transaction are discussed, rather than just small talk or casual interaction. Providing the disclosure at this stage allows for transparency and builds trust between the parties involved, as it clarifies whether the agent is representing the buyer, seller, or acting as a dual agent. Agency disclosure is essential for compliance with Texas real estate laws, ensuring parties understand their rights and the nature of the relationship with their agent from the onset of their discussions.

The timing of the disclosure is essential; it does not occur at closing, during contract signing, or merely before showing properties. Each of these moments may come too late in the process to effectively inform parties of their relationship with the agent and could lead to misunderstandings or disputes regarding representation. By addressing this during the first substantive dialogue, the agent aligns with ethical practices and legal requirements in the real estate industry.