What is a net listing?

A net listing is defined as a type of listing agreement where the broker agrees to sell a property and the seller specifies a minimum price they want to receive from the sale. Any proceeds above this specified price are considered the broker's commission. This arrangement means that the broker's income is not a fixed percentage of the sale price but rather is determined by how much the property sells for above the designated net price.

In this context, the seller benefits by establishing a financial baseline for the sale while the broker has an incentive to sell the property at the highest possible price to maximize their commission. This type of agreement can lead to situations where the final sale price may be significantly higher than the stated minimum.

The other options refer to different types of listing or representation agreements, which do not specify the unique mechanics of how a net listing operates. Recognizing the distinctions between these various agreements is crucial for understanding how different compensation structures work within real estate transactions.