Want to know what Net Listing means? Well, Net Listings are a type of listing where the home seller sets a minimum price he/she is willing to sell the property for and whatever amount above that minimum the real estate agent manages to get from a home buyer's offer, becomes the real estate agent’s commission.
Here's an example:
Say home seller comes up to a broker and says " Hey, Broker! I'd like to sell my house. But I can't sell my house for under $100,000; that is my bottom line." If the broker or the real estate agent working with him sells the house for $150,000, their commission will be $50,000.
However, Net Listings are not always recommended, as they very often lead to lawsuits and perceived financial losses. In fact, they are illegal in states like New Jersey, Georgia, and Virginia. In other states like California and Texas, although Net Listings are legal, there are laws that are designed to safeguard both parties from the potential problems of this specific listing. If you are a home seller, you might feel cheated if the house sells for a much bigger amount than what you thought was your house’s real Fair Market Value, and if you are a real estate agent in a Buyer’s Market getting offers that don’t generate good commissions, you might be tempted not to show them to the home seller until you get a good one, so it’s always important to be cautious regarding Net Listings and its conflict of interests.
Net Listings are one of the 5 types of Listings. If you are not sure if Net Listings are the right choice for you, check our Glossary Terms for the other four types of Listings: Exclusive Right to Sell Listing, Exclusive Agency Listing, Multiple Listing and Open Listing.
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