In which scenario would agency disclosure typically be most crucial?

Agency disclosure is most crucial during the first substantive contact between the real estate professional and the client or potential client. This initial interaction sets the stage for the relationship and is where the agent must clarify their role and responsibilities, reveal whom they represent, and outline the nature of the agency relationship. Transparency at this point is essential, as it establishes trust and helps prevent misunderstandings later in the transactional process.

When agents fail to provide agency disclosure upfront, clients may not fully understand the obligations and duties of the agent toward them, which can lead to confusion or potential disputes as the process unfolds. Therefore, ensuring clear communication about agency relationships during the first substantial contact is foundational for successful and ethical practice in real estate.

While disclosure is still important during contract finalization, negotiation, and property appraisal, the initial substantive contact is where these concepts need to be clearly communicated for the first time, making it a pivotal moment in the agency relationship.