Which scenario illustrates a conflict of interest in real estate?

In real estate, a conflict of interest arises when a party's interests interfere with another party's interests, potentially leading to biased decisions or actions. In the scenario where a broker represents both the buyer and the seller without obtaining consent from either party, a significant conflict of interest occurs. This situation compromises the broker's ability to fully advocate for each party's best interests because the broker must balance the differing goals of both clients. Without explicit consent, this dual agency creates a lack of transparency and fairness, as the broker may possess confidential information from one party that could benefit the other.

In contrast, the scenario where a buyer is receiving multiple offers illustrates a competitive market rather than a conflict of interest, as the buyer's interests are straightforwardly aligned with achieving the best purchase terms. Similarly, a property needing repairs before sale is a common situation that doesn't inherently imply any conflicting interests among parties; it simply represents a condition of the property that can be addressed through negotiation. Finally, two brokers discussing a sale typically involves collaboration or information sharing rather than a conflict, especially if no client interests are compromised in that discussion. Thus, the scenario of dual representation without consent distinctly represents a conflict of interest.