A listing wherein the commission is the difference between the selling price and a minimum price set by the seller. Real estate agents and brokers usually charge a commision for selling a home. The net listing is the difference between the price set and paid for by a buyer and the net amount the seller agreed with his agent was the minimum he would sell for.
Net listings is one of 4 types of listings. Exclusive right to sell listing means the agent gets paid no matter who sells the property, Exclusive agency listings allows an owner to sell without paying the realtor and open listings allow a seller to list with as many agents as he wants without any commitment or requirement to pay if he makes the sale himself. Net listing is sometimes viewed as a greedy way for the agent to profit as much as he can. In some states including New Jersey, Georgia and Virgina[18 VAC-135-20-280(5)] net listings are illegal. In states such as California and Texas where net listings are legal there are laws that are designed to safeguard from the potential problems of net listings. In Texas [22 TAC 535(b)] and (c) specifically state that a broker has to inform the principal of the property market value and is obligated to do the maximum effort to ensure the principal receives the best price possible. Net listings are not recommended as they very often lead to lawsuits and financial loss.