Colibri Real Estate 30-Hour Alabama Post License Practice Exam

A net listing agreement is a specific type of contract used in real estate transactions, primarily involving the seller and the real estate agent. In this arrangement, the seller agrees to receive a predetermined amount from the sale of their property, while the real estate agent keeps any amount earned above that predetermined figure as their commission. This means that the seller's main goal is a certain net profit from the sale, while the agent benefits from securing a higher sale price.

This type of agreement is less common than traditional listings and can sometimes lead to varying interpretations about its terms. However, its defining feature is the clear understanding between the seller, who is focused on the net proceeds they want from the sale, and the agent, who is motivated to maximize the sale price to increase their commission. Other parties involved in the real estate process, such as buyers, closing agents, lenders, or appraisers, do not typically sing a net listing agreement, as their roles do not directly involve the commission structure or profit expectations set by the seller.