Agency
In North Dakota, a 'net listing' creates a potential conflict of interest because:
AThe broker must represent both buyer and seller
BThe broker's commission is tied directly to maximizing the sale price above the seller's net, potentially at the seller's expense✓ Correct
CIt requires the NDREC's approval
DIt prevents the seller from accepting the first offer
Explanation
In a net listing, the broker keeps everything above a set net price as commission. This incentivizes the broker to maximize the sale price, which may actually align with the seller's interest in some cases, but the potential for exploitation of unsophisticated sellers creates an inherent conflict.
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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.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Math Concepts
State-Specific Concepts
DRE Regulation
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