What is a net listing in real estate?

A net listing is defined as an agreement where the seller specifies a minimum acceptable price for a property. This type of listing allows real estate agents to keep any amount earned over that specified minimum as their commission. For instance, if a seller specifies that they will accept no less than $300,000 for their home and the agent sells the property for $350,000, the agent earns the difference of $50,000 as commission. This arrangement can incentivize agents to maximize the sale price, but it also raises ethical considerations, as agents may prioritize their commission over the best interests of the seller.

Other options do not accurately describe a net listing. A type of property lease pertains to rental agreements, and including maintenance costs typically refers to property management rather than the specifics of property listing types. Similarly, while contractual arrangements do exist for commercial properties, a net listing is primarily associated with residential sales and involves specific price conditions rather than the broader category of commercial real estate transactions. Thus, the distinguishing characteristic of a net listing is the seller's establishment of a minimum price, making this choice the correct one.