California Real Estate Practice Exam

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What issue can arise when Broker A shows a property to a family member who is interested in purchasing it?

  1. A conflict of interest

  2. An ideal selling situation

  3. Undisclosed dual agency

  4. No issue as long as the property sells

The correct answer is: Undisclosed dual agency

When Broker A shows a property to a family member who is interested in purchasing it, the potential issue that can arise is undisclosed dual agency. This is when the broker is representing both the buyer and the seller in the transaction, which can create a conflict of interest and raise ethical concerns. A and B do not address the potential issue of the broker's obligation to disclose their relationship with the buyer to the seller. D is incorrect because even if the property sells, the issue of undisclosed dual agency can still exist.

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