Under South Dakota law, a net listing is:
Correct Answer
D) Illegal under South Dakota real estate law
Net listings are illegal in South Dakota. Under SDCL 36-21A and the rules of the South Dakota Real Estate Commission, net listings are prohibited because they create an inherent conflict of interest — the broker's compensation is tied directly to the difference between the seller's minimum acceptable price and the actual sale price, which undermines the broker's fiduciary duty to act in the seller's best interest. Licensees who enter into net listing agreements may face disciplinary action, including suspension or revocation of their license.
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Related Topics & Key Terms
Related Topics:
Key Terms:
Related Concepts
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
An agency relationship created by a clear, explicit agreement between the principal and agent, either orally or in writing.
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