In what scenario would an agent experience a conflict of interest?

A conflict of interest arises when an agent has competing interests or loyalties that could potentially interfere with their ability to act in the best interest of their clients. When an agent represents both the buyer and the seller simultaneously in a real estate transaction, the agent is in a dual agency situation. This scenario creates a conflict because the agent must balance the differing interests of both parties, which can lead to situations where one party's interests may be compromised.

In dual agency, the agent has to navigate the delicate balance of maintaining confidentiality and providing equal service to both clients. For instance, if the buyer wants to negotiate a lower price while the seller aims to secure the highest possible offer, the agent must carefully manage these opposing interests. This complexity can create ethical dilemmas, as the agent may struggle to serve both clients fairly without favoring one over the other.

In contrast, working solely for a buyer or representing a seller does not inherently create a conflict of interest, as the agent is focused on one party's needs. Providing market analysis and managing rental properties also does not involve competing interests in the same way that dual representation does. Therefore, the scenario of representing both the buyer and seller simultaneously clearly illustrates how a conflict of interest can arise in real estate transactions.