What is a key characteristic of a net listing?

What is a key characteristic of a net listing?

• A. Commission is based on a specific price set by the seller
• B. Brokers receive a fixed fee regardless of sale price
• C. Seller sets a minimum price and broker keeps excess
• D. Only applicable for exclusive right to sell listings

Answer: (C)

In a net listing, the distinctive feature is that the seller establishes a minimum price they are willing to accept for the property. Any amount above that minimum, which the property sells for, becomes the broker’s commission. This arrangement incentivizes the broker to maximize the sale price since their earnings are dependent on the excess amount generated from the sale. This structure aligns the interests of both the seller and the broker, encouraging the broker to negotiate for a higher sale price while ensuring the seller receives at least the minimum amount they specified. The other options, while they represent different types of listing agreements or characteristics, do not accurately describe net listings. For example, having a commission based on a specified price or a fixed fee does not capture the essence of a net listing, which revolves around the concept of allowing the broker to keep anything earned above a predetermined minimum price set by the seller. Thus, option C encapsulates the fundamental aspect of a net listing accurately.

In a net listing, the distinctive feature is that the seller establishes a minimum price they are willing to accept for the property. Any amount above that minimum, which the property sells for, becomes the broker’s commission. This arrangement incentivizes the broker to maximize the sale price since their earnings are dependent on the excess amount generated from the sale. This structure aligns the interests of both the seller and the broker, encouraging the broker to negotiate for a higher sale price while ensuring the seller receives at least the minimum amount they specified.

The other options, while they represent different types of listing agreements or characteristics, do not accurately describe net listings. For example, having a commission based on a specified price or a fixed fee does not capture the essence of a net listing, which revolves around the concept of allowing the broker to keep anything earned above a predetermined minimum price set by the seller. Thus, option C encapsulates the fundamental aspect of a net listing accurately.