What must a licensee disclose to a client regarding compensation?

A licensee is required to disclose to a client comprehensive information regarding compensation to ensure transparency and uphold ethical standards in real estate transactions. This includes details about the sponsoring broker's compensation, any policies related to sharing commissions, and any ownership interests that may influence the broker's financial incentives.

By providing this information, the licensee helps clients understand how their interests may be affected by the financial relationships involved in the transaction. This level of transparency is vital for building trust and ensuring that clients are fully informed about potential conflicts of interest.

Other options, while they may touch on aspects of compensation, do not encompass the full range of disclosure required by law and ethical standards. For instance, disclosing only the total commission amount or focusing solely on compensation from third parties does not give clients the complete picture. Furthermore, while any personal fees charged are relevant, they do not replace the necessity of sharing information about the sponsoring broker’s compensation structure and relationships.