What is a net listing?

A net listing is a type of real estate agreement where a seller sets a minimum amount that they are willing to accept for their property, and anything above that amount is considered the real estate agent's commission. In other words, the seller agrees to sell the property for a certain amount, and anything above that price is the agent's profit.

Net listings are controversial because they can create a conflict of interest for the real estate agent, as they may be incentivized to sell the property for as high of a price as possible in order to maximize their commission. In some states, net listings are illegal due to this conflict of interest, while in others they are allowed as long as the agent discloses the terms of the agreement to the seller.

Overall, net listings can be risky for both sellers and real estate agents, as they can lead to ethical issues and potential legal complications. It is important for both parties to fully understand the terms of the agreement before entering into a net listing contract.