Contracts
A Minnesota net listing agreement is one where the broker earns everything above a specified minimum price. This type of agreement:
AIs required for commercial properties in Minnesota
BIs prohibited in Minnesota as it creates a conflict of interest✓ Correct
CIs the most common type of listing in Minnesota
DIs permitted with written disclosure of the minimum price
Explanation
Net listings are considered unethical and are prohibited in many states including Minnesota. The Minnesota Department of Commerce's rules and professional standards prohibit net listings because they create a direct conflict between the broker's financial interest and the seller's interest in maximizing the sale price.
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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.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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.
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