What does a net listing create for a broker that may lead to a conflict of interest?

A net listing can indeed lead to a conflict of interest for a broker because it creates a scenario where the broker's financial gain is directly tied to the price at which the property is sold, rather than the price that the seller desires.

In a net listing arrangement, the seller specifies a minimum amount they want to receive from the sale of their property. Any amount above this specified net amount is retained by the broker as their commission. This structure could incentivize the broker to focus on achieving a higher sale price for their own benefit, rather than prioritizing the seller's interests and needs. Such a situation could violate the broker's fiduciary duty, which requires them to act in the best interest of their client, ensuring the seller’s goals are met before their own.

This potential conflict could undermine the trust that is foundational in a broker-client relationship, as the broker’s motivations could appear self-serving rather than aligned with the seller's objectives. Overall, while net listings can provide a clear financial incentive for brokers, they pose risks to the ethical and fiduciary responsibilities that brokers must uphold.