What is a net listing?

A net listing is defined as a type of real estate listing where the seller specifies a minimum amount they wish to receive from the sale of their property. The real estate agent or broker then retains any amount above this specified "net" amount as their commission. This means that the commission earned by the agent is calculated as the difference between the actual sale price and the net amount the seller wanted to receive.

This arrangement can incentivize agents to sell the property for a higher price since their commission increases with the sale price beyond the seller’s minimum. It’s important to note that while net listings can motivate real estate agents to extract the best possible price for the seller’s property, they are subject to regulations and may not be allowed in all states due to concerns about ethical practices in real estate transactions. Therefore, the choice indicating that commission is the difference between the sale price and the buyer's offer accurately captures the essence of what a net listing entails.