What does "net listing" refer to in real estate?

A net listing refers to a real estate listing arrangement whereby the broker is allowed to keep any amount above a certain specified price that is set by the seller. Essentially, the seller establishes the minimum amount they wish to receive from the sale. Any proceeds from the sale above that minimum amount become the broker's commission. This approach incentivizes the broker to sell the property at the highest possible price, as their earnings directly depend on the excess amount above the seller's specified figure.

In this type of arrangement, it is crucial for both the seller and broker to communicate transparently about the minimum acceptable sale price to avoid misunderstandings. While net listings can be appealing for some sellers due to the possibility of higher sales proceeds, they are not commonly accepted in all states and may be subject to specific legal regulations.

The other options do not accurately describe what a net listing entails. For instance, the suggestion that a seller receives the total sale price without agent fees does not reflect how net listings operate, as the broker does earn a commission, which is the amount over the seller's set figure.