A brokerage relationship disclosure must be given to potential buyers or sellers in what type of transaction?

The requirement for a brokerage relationship disclosure is mandated primarily in residential real estate transactions, which encompasses the sale of homes and other residential properties. This regulation is in place to ensure that buyers and sellers are fully aware of the nature of the relationship they have with their real estate broker, particularly in terms of the duties and obligations that the broker has toward them, whether they are representing the buyer, seller, or acting as a transaction broker.

While disclosures may be important in commercial leases and sales and may also apply in investment property transactions, the specific requirement to provide a brokerage relationship disclosure is typically outlined within the context of residential sales. This is rooted in the intention to protect consumers, promoting transparency and informed decision-making in what is often one of the largest financial transactions they will undertake. An open house does not independently create the need for such disclosures, as it is generally a public showing of a property rather than a formal engagement in a brokerage relationship.

In summary, the emphasis on residential sales aligns with regulatory standards designed to safeguard consumers.