PSI Oklahoma Real Estate Practice Test

What type of listing agreement is in effect when the broker keeps the difference above the owner's desired net from the sale?

1. Exclusive right-to-sell listing

2. Open listing

3. Net listing

4. Guarantee listing

The correct answer is: Net listing

A net listing is a specific type of listing agreement where the seller sets a minimum price they wish to receive from the sale of their property. Any amount received above this minimum price, known as the owner's desired net, is considered the broker’s commission. This means that the broker has an incentive to sell the property for a higher price, as their earnings can be directly impacted by the difference between the sale price and the net amount stipulated by the seller. In the context of real estate, this type of listing can create a motivation for the broker to negotiate more aggressively and market the property more effectively, potentially benefiting both the seller and the broker. However, it's important to note that net listings are not legal in all states, and in some areas, they may be viewed as problematic due to the potential for conflicts of interest. Other listing agreements, such as the exclusive right-to-sell listing, do not specifically tie the broker's commission to the net proceeds. Instead, they allow the broker to receive a pre-established percentage of the sales price regardless of what the seller's desired net is. Therefore, in this scenario, the type of listing agreement being described accurately fits the definition of a net listing.