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Question:

Why are net listings generally frowned upon in the real estate industry?

A They can lead to brokers taking advantage of property owners.
Explaination

In a net listing, the seller names a price they want for their property, and any amount above that sale price goes to the broker. Net listings are frowned upon in many states (and illegal in others) because they can lead to brokers not acting in the best interest of the seller. For example, if a seller wanted $150,000 for their home, and there was an offer for $152,000, in a net listing the broker may be tempted to not accept the offer because his commission on the sale would be relatively small.