Which statement is true regarding net listings?

Net listings are arrangements in which a seller agrees to receive a specified net amount from the sale of their property, while the real estate agent keeps any excess above that amount as their commission. In Virginia, net listings are not permitted due to the potential for conflicts of interest and ethical concerns regarding fair market value. This prohibition arises from the belief that this type of listing can incentivize agents to prioritize their own financial gain over the best interests of the seller.

As net listings can distort the pricing dynamics of real estate transactions, their legality is restricted in Virginia, ensuring that agents work under traditional commission-based structures that align their interests with those of their clients. This practice promotes transparency and helps maintain trust in real estate transactions within the state.