Agency
What is 'net listing' prohibition policy and why do most states and associations discourage it?
AA. Net listings are prohibited because they generate too-high commissions for agents
BB. Net listings create an inherent conflict of interest: the agent profits from maximizing the sale price above the seller's minimum, potentially at the seller's expense—violating the duty of loyalty✓ Correct
CC. Net listings are prohibited because they are too complex for average sellers to understand
DD. Net listings are prohibited because they eliminate buyer's agent compensation
Explanation
In a net listing, the broker keeps everything above the seller's net amount as commission. This creates a direct conflict: the higher the sale price, the more the broker earns—but this comes from the seller's proceeds.
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