What type of listing is likely to manipulate sellers by allowing brokers to earn excess commissions?

Study for the Rockwell Fundamentals Test. Utilize flashcards and multiple-choice questions with explanations. Be fully prepared for your exam experience!

A net listing is designed in such a way that the broker's commission is based on the difference between the selling price and a price predetermined by the seller. This setup can lead to situations where the broker may be incentivized to push for higher selling prices in order to earn a larger commission. It essentially allows the broker to manipulate the sale process since their earnings are directly tied to the sale amount rather than being fixed. This can result in conflicts of interest and potentially lead to unethical practices, as brokers may prioritize their commissions over the seller's best interests.

The other listing types have different structures that do not inherently allow for the same level of commission manipulation. For example, an open listing allows multiple brokers to represent the property simultaneously but does not incentivize a broker to push the price beyond what the seller desires. An exclusive agency listing grants a single broker exclusive rights to sell, but the compensation is pre-set and not tied to the selling price like in a net listing. A flat fee listing specifies a fixed commission regardless of the sale price, eliminating the incentive for manipulation based on commission amounts.

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