What best describes a net listing?

• A. The broker's commission is a fixed percentage of the sale price.
• B. The broker's commission is set by the government.
• C. The broker's compensation is the difference between the sale price and the seller's net price; the seller's net price is the minimum amount the owner will accept; net listings are often prohibited.
• D. The broker's compensation is paid by the buyer.

Answer: (C)

A net listing is defined by the seller stating a net amount they want to receive from the sale, and the broker’s compensation being the difference between the final sale price and that net amount. In other words, if the property sells for more than the seller’s net price, the broker keeps the excess as commission; if it sells for less than that net price, the broker may not earn anything. This arrangement creates a potential conflict of interest because the broker’s income depends on the sale price, which can incentivize pushing for a higher price. For this reason, net listings are often prohibited or restricted in many jurisdictions, including Florida. The other descriptions don’t fit because a net listing isn’t a fixed percentage of the sale price, it isn’t set by the government, and the commission isn’t paid by the buyer.