Question

What kind of listing agreement is illegal in many states because of the potential for conflict of interest between a broker's fiduciary responsibility to the seller and the broker's profit motive?

A) Net listing
B) Open listing
C) Exclusive right-to-sell
D) Exclusive agency listing

Answer 1

A net listing agreement is the type of listing agreement that is illegal in many states due to the potential conflict of interest between a broker's fiduciary responsibility and their profit motive.

Step-by-step explanation:

The type of listing agreement that is illegal in many states due to the potential for conflict of interest between a broker's fiduciary responsibility to the seller and the broker's profit motive is the Net listing. In a net listing agreement, the broker's fee is determined by the amount of profit they can make from selling the property. This creates a conflict of interest as the broker may be motivated to sell the property at a lower price to maximize their own profit.