Brokerage

Net listing

The broker keeps everything above a price the seller sets

The seller names a figure they must receive and the brokerage’s compensation is whatever the sale exceeds it by. The arrangement sets the broker’s interest directly against the client’s: the broker profits by keeping the seller uninformed about what the property is worth.

Net listings are illegal in a number of states and restricted in others. Whether one may be taken at all is a question of the license law where the property sits, and it is a question with a real disciplinary consequence attached.

How the exam asks about it

Name the conflict of interest rather than the arithmetic. Several states prohibit net listings outright and the rest restrict them.

Related terms

Listing agreementFiduciary dutyExclusive right-to-sell listing

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