What is a net listing agreement?

A net listing agreement is a type of real estate listing where the seller specifies a minimum amount they want to receive from the sale of their property. Any amount above this specified net price becomes the commission for the salesperson or broker. This means that the commission can exceed what was initially agreed upon, as the salesperson earns any proceeds above the seller's minimum acceptable price.

The reason this choice effectively captures the essence of a net listing agreement is that it emphasizes the commission structure based on the proceeds of the sale, rather than a flat fee or fixed percentage. In contrast, standard listing agreements typically specify a set commission rate independent of the final sale price. Thus, understanding that a net listing can lead to a commission that varies based on the sale price is key to comprehending how this type of listing works. The other options don't accurately describe the primary feature of a net listing—where the commission isn’t just a fixed amount or percentage, but rather tied directly to any amount exceeding the seller's minimum net.