What practice is illegal in real estate, where an agent keeps any amount above the seller's desired sale price?

The practice that is illegal in real estate, where an agent keeps any amount above the seller's desired sale price, is known as a net listing. In a net listing arrangement, the seller sets a minimum price they are willing to accept for their property. Any amount over that set price from the buyer’s offer is retained by the agent as their commission. This creates a conflict of interest and incentivizes the agent to sell the property for as much as possible without regard to the best interests of the seller, as they benefit from the excess amount collected.

Due to these potential conflicts and the possibility of undermining the seller's interest, many states, including Maine, have prohibited net listings. The purpose of this regulation is to ensure fair practice and protect the integrity of real estate transactions.

In contrast, open listings, exclusive listings, and broker commissions are permissible practices that conform to standard real estate regulations. Open listings allow multiple agents to sell a property, exclusive listings grant a single agent the right to sell, while broker commissions refer to the fees paid to agents based on agreed sales or services. These practices maintain transparent relationships between agents and their clients, providing clear terms for compensation and responsibility.