Which duty involves keeping a principal informed of all facts that could affect a transaction?

The duty of keeping a principal informed of all facts that could affect a transaction is best described by the concept of disclosure. In real estate, disclosure refers to the obligation of an agent to communicate all relevant information to their client that could influence the client’s decisions regarding the transaction. This could include material defects in the property, changes in market conditions, or any other information that could impact the client's interests.

Disclosure is foundational in establishing trust and transparency in the agent-client relationship. It ensures that the principal is fully aware and can make informed decisions. This duty of full disclosure is critical in maintaining ethical standards in real estate practice and helps prevent any misrepresentation or neglect of important facts.

Other concepts, such as agency, negotiation, and compliance, serve different purposes in a real estate transaction. Agency pertains to the relationship established between the agent and the principal, negotiation involves the process of reaching an agreement between parties, and compliance refers to adhering to laws and regulations. While these are important components of the real estate process, they do not specifically address the duty of keeping the principal informed about facts that could influence a transaction.