Colibri Real Estate 30-Hour Alabama Post License Practice Exam

A net listing is specifically defined as an agreement where the seller stipulates a minimum amount they wish to receive from the sale of their property, while any additional amount received from the sale above that specified figure serves as the broker's commission. This arrangement incentivizes the broker to negotiate a higher sale price since their earnings depend on the amount exceeding the established net amount that the seller desires.

In real estate, this type of listing can sometimes present ethical considerations, as it may blur the lines of transparency between the seller and the agent regarding the final sale price. Nevertheless, it is a distinct model that contrasts significantly with traditional commission structures, where the broker receives a fixed percentage of the total sale price.

By understanding this structure, real estate professionals can navigate net listings appropriately, ensuring they comply with any applicable laws and ethical standards while also assessing the financial interests of both the seller and themselves.