If a broker has a listing agreement and a buyer wants to purchase that listing, what is a potential conflict of interest?

In a scenario where a broker holds a listing agreement with a seller and a buyer expresses interest in purchasing that property, a potential conflict of interest arises primarily because the broker has a fiduciary duty to represent the seller's interests. This means that the broker must prioritize the seller's needs and objectives, which could lead to situations where the buyer may not receive the same level of representation or advocacy.

The broker is obliged to negotiate on behalf of the seller and secure the best terms possible, which may create a dual agency situation if the buyer wants representation from the same broker. In Colorado, brokers can represent both parties in a transaction; however, this requires informed consent from both the buyer and the seller. Without this consent, the broker effectively cannot advocate for the buyer's interests while simultaneously fulfilling their duties to the seller.

This context highlights why it may not be appropriate for the broker to solely represent the buyer since their primary responsibility is to the seller under the listing agreement. Thus, the correct answer emphasizes the broker's obligation to only represent the seller unless proper disclosure and consent are obtained from both parties to allow dual representation.