Although agency disclosure is required by state law that homebuyers are told the role of their real estate agent in the sales process, and most importantly, whom the agent represents, less than one-third of real estate agents comply, according to the National Association of Realtors' 2005 Profile of Home Buyers and Sellers.

Agency disclosure compliance has been on a downward trend since 2000, when 38 percent of homebuyers were disclosed at first meeting, 28 percent when the contract was written, and nineteen percent weren't disclosed at all.

One out of five buyers weren't sure whether they had been disclosed or not.

By 2002, compliance was worse. According to the National Association of Realtors Profile Of Home Buyers And Sellers in 2002, the NAR found that 35 percent of all buyers were disclosed at first meeting, 26 percent when the contract for purchase was written, and 18 percent weren't disclosed at all. Twenty-one percent were unsure whether or not they had been disclosed.

At the time, NAR general counsel Laurie Janik told Realty Times, "Disclosed dual agency is probably the most difficult form of representation to perform properly," says Janik. "These statistics say that people are being sloppy. They need to take agency disclosure requirements seriously; it is a critical element of consumer protection. I don't think it is good for practitioners or consumers that the trend line is going down. We aren't going in the right direction -- compliance is worsening."

Fast-forward to the 2005 Profile of Home Buyers & Sellers when the NAR found that only 30 percent of homebuyers were disclosed at first meeting; 28 percent when the contract was written; 22 percent weren't disclosed at all, and one in five were uncertain if they were disclosed at all.

A shockingly low number of first-time buyers were disclosed at first meeting -- only 23 percent, while repeat buyers were more readily disclosed (35 percent.)

That is a precipitous drop from 2004, when 37 percent of first-time buyers were disclosed at first meeting, but an improvement for repeat buyers. In 2004, only 23 percent were disclosed at first meeting.

According to the 2005 report, "Homebuyers should understand the role of their real estate agent in the sales transaction and who their agents represent. Agents usually require that a disclosure agreement be signed that describes who the agent represents in the transaction - buyer or seller."

What the reasons are for the deteriorating disclosures aren't clear, but there are a couple of factors that may be driving poor disclosures.

Since 2000, the population of real estate professionals has doubled, with NAR memberships bursting from approximately 750,000 in 2001 to nearly 1.5 million by the end of 2005. It's possible that there hasn't been enough training of these new licencees.

Second, the NAR points out that disclosure laws by the states are "all over the place."

Iverson Moore, senior associate in public affairs for the NAR says, "There are a lot of newcomers, and in most cases they should be trained to disclose as early as possible, but not all state laws require it."

For example, in Alabama, disclosures are to take place "as soon as reasonably possible and before a licensee discloses any confidential information the licensee must provide a written disclosure, to be signed by the consumer, that describes the alternative types of brokerage services available ... ."

But in Arizona, disclosure isn't required until much later in the transaction. "Before closing, a real estate broker must disclose in writing to all parties the name of each employing broker who represents a party to the transaction, and who will receive compensation from the transaction."

Arkansas' policy doesn't have a date when disclosures are required. All the statute says is that "a licensee must clearly disclose to all parties to a real estate transaction or their agents which party the licensee is representing, as required by the commission."

Comments Laurie Janik, general counsel for the NAR, "Almost all states require disclosure of agency relationships.

These statistics are truly disappointing to me. I would have thought the numbers on compliance with agency disclosures would be increasing year by year as agents become accustomed to making them on a regular basis."

She advises, "I think greater emphasis in agent training on the benefits of agency disclosure might help to boost these numbers. Agency disclosure benefits everyone. It helps avoid any confusion among buyers and sellers as to whom the agent represents. It also helps the agents avoid creating unintended agency relationships with consumers."

Published: January 24, 2006

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.