Which scenario would most clearly illustrate a broker representing both a buyer and a seller in the same transaction without proper disclosure?

Which scenario would most clearly illustrate a broker representing both a buyer and a seller in the same transaction without proper disclosure?

• A. Representing a buyer only
• B. Representing a seller only
• C. Representing both buyer and seller in the same transaction
• D. Representing a lender

Answer: (C)

Dual agency occurs when one broker represents both parties in the same transaction. In Colorado, this must be disclosed in writing and the other party must give informed, written consent before the relationship begins. Without proper disclosure, the broker faces a real conflict of interest because loyalty and confidentiality to one client can clash with the interests of the other. The broker also cannot fully advocate for either side if both interests are in play, which undermines the fiduciary duties of loyalty, obedience, disclosure, and accounting. Therefore, representing both the buyer and the seller in the same transaction without a proper written disclosure and consent most clearly demonstrates an improper dual agency. Representing only one party or representing a lender are standard agency arrangements and do not involve the same risk of undisclosed conflicts between two clients in a single deal.

Dual agency occurs when one broker represents both parties in the same transaction. In Colorado, this must be disclosed in writing and the other party must give informed, written consent before the relationship begins. Without proper disclosure, the broker faces a real conflict of interest because loyalty and confidentiality to one client can clash with the interests of the other. The broker also cannot fully advocate for either side if both interests are in play, which undermines the fiduciary duties of loyalty, obedience, disclosure, and accounting. Therefore, representing both the buyer and the seller in the same transaction without a proper written disclosure and consent most clearly demonstrates an improper dual agency. Representing only one party or representing a lender are standard agency arrangements and do not involve the same risk of undisclosed conflicts between two clients in a single deal.