Which of the following brokerage agreements is illegal in Kentucky?

A net listing agreement is considered illegal in Kentucky because it creates a potential conflict of interest between the real estate agent and the seller. In a net listing, the agent's commission is based on the amount the property sells above a specified minimum price set by the seller. This arrangement incentivizes the agent to prioritize their financial gain over the seller's interests, as the agent may want to sell the property for a higher price than what the seller desires to ensure a larger commission.

Real estate laws aim to promote fair practices and protect consumers, which is why net listings are not permitted. In contrast, the other types of agreements mentioned are legal in Kentucky and have structures that better align the interests of both agents and clients. An exclusive agency agreement, for example, gives the seller the right to sell the property independently, while an exclusive right to sell agreement ensures that the agent receives a commission regardless of how the property sells. An open listing agreement allows multiple agents to list the property, fostering competition while still adhering to legal guidelines.