Agency
In Michigan, the 'net listing' arrangement is:
ACommon and recommended for transparency
BDiscouraged and potentially discouraged as it creates a conflict of interest between the agent and client✓ Correct
CRequired by LARA for all listings over $500,000
DOnly permitted for commercial properties
Explanation
A net listing (where the broker keeps everything above a seller's target price as commission) is generally discouraged and potentially violates Michigan agency law because it creates a significant conflict of interest between the broker's profit motive and the seller's best interest.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
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.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
Math Concepts
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