The situation described in the question pertains to the concept of a net listing. A net listing occurs when a seller agrees to receive a specified net amount from the sale of their property, and any amount above that figure is kept by the agent as their commission. This practice can lead to ethical concerns, as it may incentivize the agent to sell the property at a higher price than what the seller might expect, potentially damaging the trust and fiduciary responsibility that the agent has towards the seller.
In many jurisdictions, net listings are either discouraged or illegal because they can lead to conflicts of interest and lack of transparency. Keeping more than what the seller intended without explicit consent could result in disciplinary action against the agent, including the loss of their license. Hence, understanding the implications of net listings is crucial for maintaining ethical standards within the real estate practice.
Co-mingling funds refers to mixing a client’s funds with an agent’s personal funds, which can also lead to serious repercussions but is not directly related to the scenario described. Dual agency involves representing both the buyer and the seller in a transaction, which raises its own set of ethical considerations but does not specifically pertain to the issue of keeping excess funds. A flat fee listing is a different type of arrangement where