What must a licensee inform the other party about?

A licensee must inform the other party about the lack of dual-agent representation because this is a crucial aspect of the agency relationship in real estate transactions. Dual agency occurs when a single agent represents both the buyer and the seller in the same transaction. This situation can create conflicts of interest, and not all states allow it, or they may have specific requirements for disclosure.

By informing the other party about the absence of dual-agent representation, the licensee is helping both parties understand who is advocating for their interests. This transparency builds trust and ensures that each party knows who is responsible for representing them in the negotiation process. It also provides the parties with the opportunity to seek independent representation if they feel it is necessary.

The other options involve information that may be relevant but does not hold the same level of obligation for disclosure in the context of agency relationships as the lack of dual-agent representation does. For instance, whether the agent is working independently or the commission structure does not directly impact the fundamental understanding of representation between the parties involved. Similarly, discussing which property inspections are needed pertains more to specific property concerns rather than the overall representation dynamics.