What type of listings are prohibited in most states, including South Carolina, due to uncertainty in selling price?

Net listings are prohibited in most states, including South Carolina, because they create ambiguity around the selling price, which can lead to potential conflicts of interest. In a net listing agreement, the seller sets a minimum price they wish to receive from the sale of their property, and any amount above that minimum becomes the commission for the broker. This arrangement can incentivize brokers to prioritize their financial gain over the seller’s interest, potentially leading to unethical practices.

The lack of a clear, disclosed commission structure may also create misunderstandings for both sellers and buyers regarding the actual sale price. By not clearly outlining how commissions work and how they relate to the selling price, net listings can ultimately harm transparency in real estate transactions. Thus, to protect consumers and ensure ethical standards in real estate practices, many states, including South Carolina, have deemed net listings illegal.