Contracts
Under California law, a net listing is:
AProhibited under all circumstances
BLegal but discouraged and subject to fiduciary duty disclosure requirements✓ Correct
CRequired for commercial transactions over $1 million
DOnly permitted for broker-owned properties
Explanation
Net listings are legal in California but strongly discouraged by the DRE because they create a conflict of interest. The broker must disclose the actual selling price and the amount of profit made to the seller.
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