Michigan License Law
A Michigan real estate licensee who engages in 'net listings' is:
AIn full compliance with Michigan license law
BPotentially subject to discipline because net listings create conflicts of interest✓ Correct
CFollowing recommended best practices
DRequired to disclose the net listing to the buyer
Explanation
Net listings (where the broker keeps everything above a specified net to the seller) are discouraged or discouraged in many states, including Michigan, because they create a conflict of interest between the broker's financial interest and the seller's interest in getting the highest price.
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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.
Seller's Agent (Listing Agent)A real estate licensee who represents the seller's interests, markets the property, and owes fiduciary duties to the seller.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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.
State-Specific Concepts
License Law
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