What must be disclosed to the consumer when entering into a brokerage agreement?

When entering into a brokerage agreement, it is essential for the consumer to be informed about the type of relationship being established. This includes understanding whether the broker is representing the buyer, the seller, or both in a dual agency scenario. Clear disclosure of the relationship helps establish trust and transparency, ensuring that all parties are aware of their rights and obligations under the agreement.

In Illinois, the law mandates that this information must be disclosed to promote an ethical practice within the real estate industry. The distinctions between various types of agency relationships—as well as how these relationships affect representation—are fundamental for consumers to make informed decisions.

The other choices, while related to brokerage practices, do not hold the same level of critical importance in this context as understanding the relationship type. For instance, while the commission rate and geographical area served may be relevant aspects of the brokerage services, failing to disclose the nature of the agency relationship can lead to misunderstandings regarding representation and duties owed to the consumer. Thus, the accurate disclosure of the relationship type is paramount in establishing a clear and lawful interaction between the broker and the client.