Agency
A net listing is a type of listing agreement in which:
AThe commission is a fixed percentage of the sales price
BThe broker keeps any amount above the seller's specified minimum net as commission✓ Correct
CThe broker receives no commission unless the property sells above market value
DThe commission is split evenly between all brokers
Explanation
In a net listing, the seller specifies a net amount they want to receive; the broker keeps everything above that amount as commission. Net listings are discouraged or legal but strongly discouraged in many states due to conflict of interest.
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Key Terms to Know
Listing Agreement
A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
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.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Math Concepts
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