Minnesota State Real Estate Practice Test

Are net listings permitted in Minnesota?

1. No, they are illegal

2. Yes, they are legal

3. Only under specific conditions

4. Depends on the broker's policy

The correct answer is: Yes, they are legal

In Minnesota, net listings are indeed legal. A net listing occurs when a property owner sets a minimum price that they are willing to accept from the sale of their property, and any amount above that price becomes the commission for the broker. This practice can be somewhat controversial, as it raises questions about the broker's fiduciary duty to the seller to obtain the highest possible price for the property. The legality of net listings is primarily associated with the need for transparency and the need to adhere to the ethical standards set by the Minnesota Real Estate Commission. Although they are legal, it's important for brokers and agents to ensure that they communicate clearly with their clients about the implications of such listings, as they can sometimes lead to conflicts of interest. While the other options suggest restrictions or conditions under which net listings may be permitted, the straightforward answer is that they are legal in Minnesota as long as they comply with all relevant regulations and ethical guidelines.