What is a "non-disclosure agreement" in real estate?

A non-disclosure agreement (NDA) in real estate is designed to prevent the disclosure of confidential information shared between parties. This type of contract protects sensitive information, such as financial details, business plans, or proprietary data, from being revealed to unauthorized individuals or entities.

In the context of real estate, NDAs are often used in transactions where parties are engaging in discussions about potentially sensitive matters, such as negotiating terms for a property sale or lease. By signing an NDA, both parties can feel secure in sharing information necessary for the negotiation process without the fear that their confidentiality will be compromised.

The other options do not accurately describe the function of a non-disclosure agreement. NDAs specifically focus on confidentiality, unlike a contract that facilitates open communication, which would encourage sharing information rather than restricting it. NDAs do not pertain to financing assurances or serve as legal requirements for listings, which are separate aspects of real estate practice.