When setting up in-house exams, you may receive a message that there is a clash when allocating rooms to an exam (Step 4 of this article on creating in-house exams).
This happens if the in house exam instance starts at the same day and time that the candidate is scheduled in an exam sitting for any other exam. Any candidate who is entered into both an instance and a sitting that starts at the same time will show as having a 'Potential Clash' in the Clash Status column.
You can ignore the message and allocate rooms in the normal way.
Alternatively, in order to prevent the 'Potential clash' indicator from appearing when setting up in-house exams, you can set the in-house exam instances to start on a day when there will be no exam sittings, such as setting the instance to start a day before.