When must a real estate licensee disclose personal interest in a transaction?

A real estate licensee must disclose personal interest in a transaction before the transaction is finalized to ensure transparency and maintain trust between all parties involved. This disclosure is essential because it allows potential buyers and sellers to understand any conflicts of interest that may affect the transaction. By communicating any personal stake in the deal beforehand, the licensee is upholding ethical standards and following legal obligations, thereby facilitating informed decision-making by the other parties.

If a licensee waits until after the transaction is finalized or only discloses personal interest when legally required, it could lead to misunderstandings or even disputes later. The principle behind requiring disclosure at this stage is to protect the integrity of the real estate profession and to promote honest dealings, which can significantly impact the smoothness and fairness of the process.