What are net listings in real estate?

Net listings in real estate refer to a specific type of agreement between a seller and an agent where the seller specifies a minimum amount they wish to receive from the sale of their property. Any amount above this specified net price becomes the agent's commission. While this structure can incentivize agents to sell the property for a higher amount, it raises ethical concerns and potential conflicts of interest, as the agent may prioritize maximizing their commission over the seller's best interest.

In many states, net listings are prohibited or regulated because they can lead to a lack of transparency and fair dealing. If a buyer forms a relationship to negotiate under such an agreement, it may result in an unfair bargaining position. This ambiguity often creates dissatisfaction among consumers and ultimately can lead to disputes. Therefore, understanding that net listings are not only unique in their structure but also potentially problematic helps clarify why the acknowledgment of their prohibition in several jurisdictions is significant.