We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is a Net Listing?

Jim B.
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A net listing is an agreement between the seller of a home and the broker entrusted by the seller to find a buyer. In most listing agreements, the broker is entitled to a percentage of the selling price as his commission. Conversely, in a net listing agreement, the broker takes as his commission the difference between the sale price and the net price agreed upon by the seller, as long as the sale price is higher. Since this practice can put the broker in a position to exploit the seller, it is considered illegal in many locations.

The process of selling a home can be a difficult one for those who are inexperienced in the real estate market. As a result, home sellers often seek out a licensed real estate broker to facilitate home sales. Brokers have experience showing homes to potential buyers, dealing with all of the regulations associated with home sales, and negotiating fair prices. When a home seller hires a broker, one of a variety of conventional listing agreements between the two parties is usually signed, stipulating the fees that are due to the broker. One type of unorthodox listing agreement is a net listing, and sellers should beware of this arrangement.

As an example of how a net listing works, imagine that a seller wants his house to be sold for no less that $100,000 US Dollars (USD). That is considered the net price, and the broker in turn agrees to sell the house and take as commission anything in excess of the net that is accomplished by the eventual sale price. If the house is sold for $125,000 USD, the broker would receive as his or her commission $25,000 USD, which is the difference between the sale price and the net price.

Such a net listing agreement can lead to all sorts of ethical dilemmas for brokers, which is why many states in the United States do not allow the practice. Some brokers might purposely misrepresent the value of a house to sellers to encourage them to set a low net price. If the home sells at far greater than that amount, the broker will pocket a hefty amount of money that rightfully should have belonged to the sellers.

In addition, a broker in a net listing agreement might encourage buyers to hold out for higher sale prices in an effort to nab a higher commission. Legitimate offers on the house might be turned down by such a dishonest broker, especially if those offers were too close to the net price and thereby not that profitable to the broker. Sellers should be wary of selling their home in this manner even if the practice is legal where they live.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Jim B.
By Jim B.
Freelance writer - Jim Beviglia has made a name for himself by writing for national publications and creating his own successful blog. His passion led to a popular book series, which has gained the attention of fans worldwide. With a background in journalism, Beviglia brings his love for storytelling to his writing career where he engages readers with his unique insights.
Discussion Comments
Jim B.
Jim B.
Freelance writer - Jim Beviglia has made a name for himself by writing for national publications and creating his own...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.