Final answer:
A net listing is most favorable to the seller's agent when the property being sold has a high market value and the agent believes they can sell the property for significantly more than the listing price by negotiating a higher commission.
Step-by-step explanation:
A net listing is most favorable to the seller's agent when the property being sold has a high market value and the agent believes they can sell the property for significantly more than the listing price. In this situation, the agent can negotiate a higher commission for themselves by setting a listing price lower than the expected sale price and keeping the difference as their commission.
For example, let's say a property is expected to sell for $500,000. The seller's agent might list the property at $450,000, and if the property sells for $500,000, the agent would earn $50,000 as their commission instead of a percentage of the sale price.
It's important to note that net listings are illegal in some states and can create conflicts of interest between the agent and the seller. In many cases, it is recommended for sellers to opt for other listing agreements like exclusive right to sell or exclusive agency listings.