Arizona Real Estate License Practice Exam

A net listing is a type of agreement in which a property owner specifies a minimum amount they wish to receive from the sale of their property. Any proceeds above that amount are earned by the broker as their commission. This arrangement incentivizes the broker to sell the property for the highest possible price because they benefit from any sale price that exceeds the owner's specified amount.

In real estate practices, net listings are often less common and can be controversial because they may not always align with standard fiduciary responsibilities. Unlike exclusive agency listings, which allow the owner to sell the property themselves while still offering a commission to the broker, or exclusive right to sell listings, where the broker has the sole right to earn a commission regardless of who sells the property, net listings focus solely on the agreed amount for the owner with additional earnings for the broker. Open listings, on the other hand, allow multiple brokers to work on selling the property, with no exclusivity given to any single broker.

This unique structure of a net listing highlights the potential for a conflict of interest and the need for clear communication and understanding between the property owner and the broker to ensure that both parties are satisfied with the arrangement.