What must a broker guarantee in a net listing agreement?

In a net listing agreement, a broker guarantees a minimum sale price for the property being sold. This means that the seller specifies the amount they wish to receive from the sale, and any proceeds above that amount are considered the broker's commission. This arrangement can create a clear incentive for the broker to sell the property for a higher price while ensuring that the seller receives at least their desired amount.

This structure differs from traditional commission agreements where the broker is paid a percentage of the sale price, as the net listing focuses on securing a minimum threshold for the seller. It emphasizes the seller's needs while also providing potential for extra earnings for the broker if the property sells above the guaranteed minimum. Understanding this dynamic is essential for grasping the unique nature of net listings in real estate transactions.