What must a licensee do to guarantee future profits from a property purchase?

To guarantee future profits from a property purchase, a licensee must fully disclose the guarantee and its assumptions. This is because transparency is critical in real estate transactions, especially when discussing potential profits and associated risks. If a licensee makes statements about future profits, it is essential to clarify the basis for these projections—such as market conditions, property management strategies, or economic factors—and ensure that all parties understand the assumptions underlying the guarantee.

Full disclosure not only helps in maintaining ethical standards but also protects the licensee legally by ensuring that clients cannot claim that they were misled about the profitability of the investment. This practice aligns with the legal obligations to provide honest and complete information to clients, thereby fostering trust and reducing the risk of disputes.

Other options, while potentially relevant in different contexts, do not adequately meet the necessary requirements for guaranteeing future profits. Verbal agreements lack the legal enforceability and clarity that written agreements provide, while writing guarantees in a separate document may not address the need for full explanation and transparency. Seeking approval from a broker might be necessary for compliance with company policies, but it does not fulfill the obligation to disclose the guarantee and assumptions to clients directly.