What must a licensee disclose when acting as a dual agent?

When acting as a dual agent, a licensee is required to disclose their role as a dual agent to both parties involved in the transaction. This disclosure is crucial because it ensures that both parties are aware of the potential conflicts of interest that may arise when one agent represents both the buyer and the seller. By informing both parties, the agent upholds transparency and maintains ethical standards in the real estate transaction.

This requirement is in place to protect the interests of both the buyer and the seller, allowing them to make informed decisions knowing that their interests may not always align. Dual agency can limit the agent's ability to advocate fully for either party, hence the importance of clear communication regarding this role.

The other choices involve aspects of real estate transactions that, while important, do not pertain specifically to the obligations of a dual agent regarding disclosure. The commission structure is typically a private agreement between the agent and their clients, not something that needs to be disclosed to both parties. Similarly, a market analysis serves as a tool for pricing and valuation but does not directly relate to the responsibilities of a dual agent. Lastly, financial capabilities are confidential between the parties and are not an obligation for disclosure by a dual agent.