What is required from the agent when a conflict of interest arises?

When a conflict of interest arises in real estate transactions, it is the agent’s responsibility to disclose that conflict to all parties involved. Transparency is essential in maintaining trust and integrity in the client-agent relationship. By openly communicating the existence of a conflict, such as representing both the buyer and seller in a transaction or having a personal interest that may affect professional judgment, the agent allows clients to make informed decisions.

Disclosing a conflict of interest helps manage potential issues that may arise from divided loyalties. It ensures that the clients understand the nature of the situation and can either choose to proceed with the agent or seek alternative representation. This aligns with ethical standards in real estate practice, fostering a culture of honesty and professionalism.

In contrast, ignoring the conflict would not only be unethical but could lead to legal repercussions and damage to the agent's reputation. Maintaining confidentiality is important, but it does not supersede the obligation to disclose conflicts. Seeking approval from the client might be appropriate following disclosure, but the primary duty is to ensure that the conflict is first made known. Thus, disclosing the conflict is indeed the correct and responsible course of action for an agent.