Arizona License LawAdvancedArizona Exam
An Arizona broker receives a net listing from a seller, which means the broker keeps everything above a set amount as commission. This practice is:
APermitted if the seller's minimum net amount is fully disclosed in writing before the listing agreement is signed, since transparency about the arrangement eliminates the conflict of interest
BAllowed in Arizona provided the broker's commission above the net amount does not exceed 10% of the final sale price, since ADRE's fee-cap policy permits net arrangements with proportionate compensation
CLegal and permissible for commercial real estate transactions only, since the Commissioner's Rules prohibition on net listings applies only to residential property sales
DProhibited under Arizona Commissioner's Rules because it creates a conflict of interestCorrect
Why Prohibited under Arizona Commissioner's Rules because it creates a conflict of interest Is Correct
Answer D: Prohibited under Arizona Commissioner's Rules because it creates a conflict of interest
Net listings are prohibited under Arizona Commissioner's Rules because they create a direct conflict of interest — the broker has a financial incentive to obtain the highest possible price at the seller's expense, rather than acting in the seller's best interest.
Key Arizona License Law Terms in This Question
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Key Terms to Know
Fiduciary Duty
The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
State-Specific Concepts
DRE Regulation
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