What is a net listing agreement?

A net listing agreement is characterized by the specific arrangement where the broker is entitled to keep any amount over the seller's net proceeds from the sale of the property. In this type of listing, the seller establishes a minimum price they are willing to accept, and any amount that the property is sold for above that price becomes the broker's commission. This structure incentivizes the broker to sell the property for as high a price as possible, benefiting both parties if achieved.

This type of agreement is crucial to understand within real estate practice as it highlights the broker's role in marketing and negotiating while also clearly outlining the financial expectations for the seller. In contrast, other listing agreements may involve the broker providing a suggested price or working under different commission structures, which would not align with the specific characteristics of a net listing.