Which type of listing is considered illegal?

A net listing is considered illegal in many jurisdictions, including New York, because it stipulates that the agent's commission is based on the difference between the selling price and a predetermined price agreed upon for the seller. This arrangement can lead to conflicts of interest and does not protect the seller's best interests, as it incentivizes the agent to sell the property for as high a price as possible while maximizing their own profit.

In a net listing scenario, an agent might prioritize their commission over the seller's financial outcome, which can result in unethical practices. Consequently, many states have laws prohibiting net listings to ensure that real estate transactions are conducted fairly and transparently, protecting the interests of both sellers and buyers.

On the other hand, other types of listings, such as exclusive right to sell, open listing, and exclusive agency listing, have specific structures and guidelines that are legally recognized and can facilitate transparent and ethical real estate transactions.