What Is a Net Listing in Real Estate?

Neal Hribar, a San Diego County realtor, reports that a net listing is when a real estate agent lists a property at the amount the seller wishes to gain from the sale. The agent can then add a desired commission amount to the purchase price.

According to Neal Hribar, when an agent uses a net listing, any amount gained from the sale of the property above the seller's net belongs to the agent. Net listings are illegal in some states and can have financially hazardous consequences for sellers. If the agent sells a property for a price substantially higher than the net, the agent can take a larger part of the profit from the sale. If an offer is presented to the agent that is close to the net, which would yield little profit, the agent may not present it to the seller.