Affiliate Broker Tennessee (TN PSI) National Practice Exam `

In states where it is legal, on what type of listings may a net listing be used?

1. Open, exclusive agency, or exclusive right-to-sell listings

2. Only exclusive right-to-sell listings

3. Only open listings

4. Exclusive buyer representation listings

The correct answer is: Open, exclusive agency, or exclusive right-to-sell listings

Net listings can be utilized in various types of listings, including open listings, exclusive agency listings, and exclusive right-to-sell listings. In a net listing arrangement, the seller agrees to accept a predetermined amount from the sale of the property, and any amount over this agreed-upon figure is retained by the broker as their commission. Using net listings in an exclusive right-to-sell situation is particularly common because the broker has the exclusive right to market the property and will benefit directly from the sale proceeds above the seller’s specified net amount. Similarly, open listings allow multiple brokers to market the property without an exclusive agreement, enabling net listings to function as well due to the competitive nature of these arrangements. In the case of exclusive agency listings, there may be a level of protection for the seller, where the seller retains the right to sell the property themselves, but net listings can still apply as the broker's role is to facilitate the sale, potentially netting the seller more profit than expected while still allowing for the broker's commission. Overall, the versatility of net listings in relation to these different types of agreements makes them a useful tool in real estate transactions where they are legally permissible.