When is a net listing legal in Indiana?

In Indiana, a net listing becomes legal when it specifies a maximum amount of commission to be charged. This legal framework is essential because net listings can often lead to potential conflicts of interest between the broker and the seller. By establishing a maximum commission, it helps ensure that the broker does not inflate the sale price solely to increase their commission, thereby protecting the seller's interests.

The nature of a net listing typically permits the seller to receive an agreed-upon amount from the proceeds of the sale, with any amount over that being the broker's commission. Thus, by capping the commission, the arrangement remains compliant with state regulations while allowing the seller to safeguard their expectations regarding net profit from the sale.

Other options might suggest scenarios that do not align with the legal stipulations in Indiana, such as guaranteeing profits or allowing unrestricted pricing without commission limits, which could lead to unethical practices.