California Real Estate Practice Exam

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If Buyer C becomes interested in Seller B's house and Broker A represents both, what might the danger be?

Creation of a dual agency
Breach of contract
No dangers are present
Unlawful transaction

The correct answer is: Creation of a dual agency

Dual agency, which occurs when a real estate agent works with both the buyer and seller in the same transaction, is a common situation in real estate transactions. However, it can present a danger to both parties if the agent is not able to remain impartial and act only in the best interest of their client. In this situation, Broker A would be representing both Buyer C and Seller B, which can create a conflict of interest and potentially lead to the agent not being able to fully advocate for either party. This can lead to legal and ethical issues and may not result in a fair and equitable transaction for both the buyer and seller. Therefore, the danger of dual agency is present in this scenario. The other options, such as breach of contract or unlawful transaction, do not apply in this situation as they are not directly related to the conflict of interest that can arise from dual agency.