What is an Agency Disclosure Addendum in Real Estate Transactions?

I love talking about real estate documentation - especially ones that protect both buyers and sellers! The Agency Disclosure Addendum might sound like just another piece of paperwork, but it's actually one of the most important documents you'll encounter during a real estate transaction.

Agency Disclosure Addendum: A legal document that explains the relationship between real estate brokers and their clients (buyers or sellers) in residential property transactions. The disclosure outlines the broker's duties and responsibilities to each party and must be signed when a broker helps negotiate the sale of residential properties with one to four units.

Understanding Agency Relationships

Let's break down the different types of agency relationships you might encounter during your real estate journey. Each type serves a unique purpose and comes with its own set of responsibilities.

Seller's Agent (Listing Agent)

A seller's agent works exclusively for the seller. Their primary duties include marketing the property, negotiating the best possible price, and protecting the seller's interests throughout the transaction. They must maintain confidentiality about the seller's personal information and motivation for selling.

Buyer's Agent

Working with a buyer's agent means having someone dedicated to finding your perfect home. They search properties, schedule viewings, help evaluate prices, and negotiate on your behalf. Your buyer's agent keeps your budget, preferences, and other personal details confidential.

Dual Agency

This happens when one agent represents both the buyer and seller in the same transaction. It's legal in many states but requires special disclosure and consent from both parties. The agent must maintain strict neutrality and can't share confidential information between parties.

Designated Agency

Different from dual agency, designated agency occurs when two agents from the same brokerage represent the buyer and seller separately. This setup maintains clearer lines of loyalty and reduces potential conflicts of interest.

Essential Components of the Agency Disclosure

Your Agency Disclosure Addendum should include these key elements:

• Clear identification of all brokers involved

• Names and roles of all parties

• Specific type of representation being offered

• Detailed description of services provided

• Information about compensation

• Duration of the agreement

• Signature blocks for all parties

Common Questions About Agency Disclosure

When should I receive the disclosure?

You should receive and sign the Agency Disclosure Addendum at your first substantive contact with a real estate agent. This happens before any other paperwork is signed.

Can I change agents mid-transaction?

Yes, but check your agreement first. Some contracts include provisions about termination and potential fees.

The Importance of Agency Disclosure

This document protects everyone involved in the transaction. It creates clear expectations about who represents whom and what services will be provided. By signing it, you acknowledge that you understand the nature of your relationship with your agent.

Tips for Reviewing Your Agency Disclosure

Take these steps before signing:

• Read every section carefully

• Mark areas that need clarification

• Ask about anything you don't understand

• Keep a signed copy for your records

Related Documents You Should Know

The Agency Disclosure works alongside other important paperwork:

• Listing agreements

• Buyer representation agreements

• Purchase contracts

• Property condition disclosures

Get Expert Guidance

At Bellhaven Real Estate, we prioritize clear communication and transparency in every transaction. Our team makes sure you understand each document you sign, starting with the Agency Disclosure Addendum. Ready to start your real estate journey with a team that puts your interests first? Connect with Bellhaven Real Estate today.